Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document And Entity Information | |
Entity Registrant Name | Dunxin Financial Holdings Ltd |
Entity Central Index Key | 0001499494 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 1,000,862,148 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2018 |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
CONSOLIDATED STATEMENTS OF PROF
CONSOLIDATED STATEMENTS OF PROFIT AND OTHER COMPREHENSIVE INCOME - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated Statements Of Profit And Other Comprehensive Income | |||
Interest income on loans | ¥ 141,857 | ¥ 119,639 | ¥ 104,896 |
Interest expense | |||
Interest expenses on loans | (26,451) | (33,791) | (22,151) |
Business related taxes and surcharges | (590) | (674) | (1,152) |
Total interest expense | (27,041) | (34,465) | (23,303) |
Net interest income | 114,816 | 85,174 | 81,593 |
Credit impairment losses | (66,904) | (3,580) | (6,360) |
Net interest income after credit impairment losses | 47,912 | 81,594 | 75,233 |
Non-interest and other income | 438 | 815 | 1,772 |
Operating costs and expenses | |||
Sales and marketing | (1,794) | (3,138) | (4,899) |
General and administrative | (20,368) | (34,895) | (14,937) |
Total operating costs and expenses | (22,162) | (38,033) | (19,836) |
Profit before income taxes | 26,188 | 44,376 | 57,169 |
Income tax expense | (18,033) | (15,550) | (15,221) |
Net profit | 8,155 | 28,826 | 41,948 |
Net profit attributable to: | |||
Equity holders of the Company | 6,524 | 23,061 | 33,558 |
Non-controlling interest | 1,631 | 5,765 | 8,390 |
Net profit | 8,155 | 28,826 | 41,948 |
Other comprehensive income for the year | |||
Net profit | 8,155 | 28,826 | 41,948 |
Exchange differences on translation of financial statements of entities outside the mainland of the People's Republic of China | 616 | ||
Total comprehensive income for the year | 8,771 | 28,826 | 41,948 |
Total comprehensive income attributable to: | |||
Equity holders of the Company | 7,017 | 23,061 | 33,558 |
Non-controlling interests | 1,754 | 5,765 | 8,390 |
Total comprehensive income | ¥ 8,771 | ¥ 28,826 | ¥ 41,948 |
Basic and diluted earnings per share for the profit attributable to the equity holders of the Company during the year (expressed in RMB per share) | ¥ 0.01 | ¥ 0.10 | ¥ 0.15 |
Weighted average number of shares outstanding in the year | 1,000,171,839 | 236,180,071 | 227,716,692 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
CURRENT ASSETS | ||
Cash and cash equivalents | ¥ 3,188 | ¥ 21,717 |
Interest receivables, net of credit impairment losses | 7,057 | 39,628 |
Loans receivable, net of credit impairment losses | 579,654 | 791,390 |
Prepaid expenses and others | 1,038 | 483 |
Total current assets | 590,937 | 853,218 |
NON-CURRENT ASSETS | ||
Property and equipment, net | 50,824 | 338 |
Prepayment for a property | 14,928 | |
Intangible asset | 9 | |
Total non-current assets | 50,833 | 15,266 |
Total assets | 641,770 | 868,484 |
CURRENT LIABILITIES | ||
Loans payable | 200,417 | 226,370 |
Advance from customers | 142 | |
Salary and benefit payable | 1,411 | 3,423 |
Income taxes payable | 32,477 | 15,120 |
Interest payable | 5,139 | 3,829 |
Other payable | 35,260 | 26,716 |
Total current liabilities | 274,704 | 275,600 |
SHAREHOLDERS' EQUITY | ||
Capital and reserve attributable to equity holders of the Company | ||
Share capital | 326 | 325 |
Additional paid-in capital | 383,174 | 383,174 |
Statutory reserve | 14,017 | 13,365 |
General risk reserve | 9,885 | 9,817 |
Currency translation reserve | (493) | |
Retained earnings/(accumulated loss) | (113,257) | 67,626 |
Non-controlling interests in equity | 73,414 | 118,577 |
Total shareholders' equity | 367,066 | 592,884 |
Total equity and liabilities | ¥ 641,770 | ¥ 868,484 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CNY (¥) ¥ in Thousands | Share capital | Additional paid-in capital | Statutory reserve | General risk reserve | Currency translation reserve | Retained earnings/accumulated loss | Total | Non-controlling interests | Total |
Begning balance at Dec. 31, 2015 | ¥ 77 | ¥ 239,924 | ¥ 4,386 | ¥ 5,891 | ¥ 38,928 | ¥ 289,206 | ¥ 72,301 | ¥ 361,507 | |
Statement Line Items [Line Items] | |||||||||
Issuance of capital shares | 156,000 | 156,000 | 39,000 | 195,000 | |||||
Appropriation to reserve | 3,365 | (3,365) | |||||||
Dividend to shareholders | (15,016) | (15,016) | (3,754) | (18,770) | |||||
Net profit for the year | 33,558 | 33,558 | 8,390 | 41,948 | |||||
Share-based compensation | |||||||||
Ending balance at Dec. 31, 2016 | 77 | 395,924 | 7,751 | 5,891 | 54,105 | 463,748 | 115,937 | 579,685 | |
Statement Line Items [Line Items] | |||||||||
Appropriation to reserve | 5,614 | 3,926 | (9,540) | ||||||
Issuance of shares pursuant to reverse acquisition | 248 | (222) | 26 | 7 | 33 | ||||
Share issuance expense | (12,528) | (12,528) | (3,132) | (15,660) | |||||
Net profit for the year | 23,061 | 23,061 | 5,765 | 28,826 | |||||
Share-based compensation | |||||||||
Ending balance at Dec. 31, 2017 | 325 | 383,174 | 13,365 | 9,817 | 67,626 | 474,307 | 118,577 | 592,884 | |
Statement Line Items [Line Items] | |||||||||
Changes on initial application of IFRS 9 (see note 2.21) | (187,237) | (187,237) | (46,809) | (234,046) | |||||
Adjusted balance at January 1, 2018 | 325 | 383,174 | 13,365 | 9,817 | (119,611) | 287,070 | 71,768 | 358,838 | |
Appropriation to reserve | 652 | 68 | (720) | ||||||
Net profit for the year | 6,524 | 6,524 | 1,631 | 8,771 | |||||
Share-based compensation | 1 | 550 | 551 | 138 | 689 | ||||
Other comprehensive loss for the year - currency translation differences | (493) | (493) | (123) | (616) | |||||
Ending balance at Dec. 31, 2018 | ¥ 326 | ¥ 383,174 | ¥ 14,017 | ¥ 9,885 | ¥ (493) | ¥ (113,257) | ¥ 293,652 | ¥ 73,414 | ¥ 367,066 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flow from operating activities | |||
Profit before income taxes | ¥ 26,188 | ¥ 44,376 | ¥ 57,169 |
Adjustments for: | |||
Depreciation of property and equipment | 818 | 441 | 526 |
Share-based compensation | 689 | ||
Credit impairment losses | 66,904 | 3,580 | 6,359 |
Operating profit before changes in working capital | 94,599 | 48,397 | 64,054 |
Interest receivables | 4,933 | (19,487) | (16,443) |
Loan receivables | (79,577) | (121,040) | (213,138) |
Prepaid expenses and others | (555) | 10,673 | (10,713) |
Advance from customers | (142) | (457) | (2,782) |
Salary and benefit payable | (2,012) | 1,254 | 406 |
Interest payable | 1,310 | 602 | (675) |
Other payable | 9,386 | 24,032 | 4,320 |
Net cash (used)/generated by operating activities | 27,942 | (56,026) | (174,971) |
Income tax paid | (676) | (14,393) | (21,459) |
Net cash (used)/generated by operating activities | 27,266 | (70,419) | (196,430) |
Cash flow from investing activities | |||
Payment for intangible asset | (9) | ||
Payment for property and equipment | (18,376) | ||
Prepayment for property | (14,928) | ||
Net cash used in investing activities | (18,385) | (14,928) | |
Cash flow from financing activities | |||
Share issuance expenses | (15,627) | ||
Proceeds received from issuing capital | 195,000 | ||
Proceeds received from related party loans | 88,000 | ||
Repayments of related party loans | (8,500) | ||
Proceeds received from shareholders loans | 5,000 | 52,600 | 50,000 |
Repayment of shareholder loan | (5,000) | (42,600) | (60,000) |
Proceeds received from loan payable | 308,629 | 363,700 | 336,240 |
Repayments of loan payable | (414,924) | (347,800) | (274,990) |
Payments of dividends | (18,770) | ||
Net cash generated/(used) by financing activities | (26,795) | 10,273 | 227,480 |
Net increase/(decrease) in cash and cash equivalents | (17,914) | (75,074) | 31,050 |
Cash and cash equivalents at beginning of year | 21,717 | 96,791 | 65,741 |
Exchange losses on cash and cash equivalents | (615) | ||
Cash and cash equivalents at end of year | 3,188 | 21,717 | 96,791 |
Net cash (used)/generated by operating activities include | |||
Interest received | 98,185 | 107,086 | 89,222 |
Interest paid | (25,769) | (27,202) | (24,984) |
Foreclosure of a pledged property | ¥ (18,000) |
Organization and principal acti
Organization and principal activities | 12 Months Ended |
Dec. 31, 2018 | |
Organization And Principal Activities | |
1. Organization and principal activities | Dunxin Financial Holdings Limited (the “Company”), formerly known as China Xiniya Fashion Limited, was incorporated in the Cayman Islands as an exempted limited liability company on June 24, 2010. On December 28, 2017, the Company completed the Divestiture and Acquisition transactions (the “Transactions”). In connection with the Divestiture transaction, the Company divested its wholly-owned subsidiary, Xiniya Holdings Limited, a Hong Kong company, to Qiming Investment Limited, a British Virgin Islands company, in exchange for a purchase consideration of RMB228,000,000 (US$34,588,428). After the divestiture transaction, the Company did not meet the definition of a business for accounting and financial reporting purposes. In connection with the Acquisition transaction, the Company purchased all of the issued and outstanding ordinary shares of True Silver Limited (“True Silver”) for a cash payment of RMB228,000,000 (US$34,588,428) and the issuance of 772,283,308 of the ordinary shares at RMB1.00 (US$0.15) per share to the shareholders of True Silver. True Silver became the wholly owned subsidiary of the Company. True Silver utilizes a variable interest entity structure to operate and consolidate 80% of the financial results of Hubei Chutian Microfinance Co., Ltd (“Chutian”). Chutian, with a registered capital of RMB450 million, is a joint stock company incorporated under the laws of China specializing in providing loan facilities to micro, small and medium enterprises and sole proprietors in Hubei Province, China. The Transactions were accounted for as a “reverse acquisition” since, immediately following the consummation of the Transactions, the shareholders and management of Chutian having effectuated control of the combined company. The former shareholders of Chutian, whose shares were acquired by the Company, own and control 88.7% of shares and votes in the Company. The management of the Company is drawn predominantly from Chutian. For accounting purposes, the legal subsidiaries of True Silver were deemed to be the accounting acquirer in the transaction and the Company, the legal acquirer, was deemed to be the accounting acquiree. The consolidated financial statements represent a continuation of the consolidated financial statements of True Silver and its subsidiaries (the “True Silver Group”) and reflect the following: (a) the assets and liabilities of the True Silver Group were recognized and measured in the consolidated statement of financial position at their carrying amount before the Acquisition; (b) the identifiable assets and liabilities of the Company were recognized and measured in the consolidated financial statements at their acquisition date fair values; (c) the excess of the fair value of purchase consideration over the identifiable net assets of the Company at fair value is recognized as a reduction of additional paid-in capital in the consolidated statement of financial position; (d) the retained earnings and other equity balances recognized in the consolidated financial statement are the retained earnings and other equity balances of the True Silver Group immediately before the Acquisition; (e) the amount recognized as issued equity interest in the consolidated financial statements were determined by adding the issued equity of the True Silver Group outstanding immediately before the Acquisition to the fair value of purchase consideration of the Acquisition. The fair value of purchase consideration is based on the fair value of the Company at the completion date. However, the equity structure appearing in the consolidated financial statement shall reflect the equity structure of the Company, including the equity instruments issued by the Company to effect the Acquisition; (f) the consolidated statement of profit and other comprehensive income for the financial year ended December 31, 2017 reflects that of the True Silver Group for the full period together with the post-acquisition results of the Company; (g) the comparative figures presented in the consolidated financial statements were that of the True Silver Group; and (h) earnings per share for the financial year ended December 31, 2017 reflects the results of the True Silver Group until the date of acquisition and the results of the enlarged Group from the acquisition date. The principal place of business is 23th Floor, Lian Fa International Building, No 128 Xu Dong Road, Wuchang District, Wuhan City, Hubei Province, People’s Republic of China 430063. The Company is listed on the New York Stock Exchange American, the ticker symbol is DXF. These financial statements are presented in Renminbi, unless otherwise stated. The consolidated financial statements for the three years ended December 31, 2016, 2017 and 2018 were authorized for issue by resolution of the board of directors on May 15, 2019. Reporting entities Dunxin Financial Holdings Limited (the “Company”) is a holding company. The Company, its wholly-owned subsidiaries and variable interest entity are collectively referred to as the “Group”. The Group is principally engaged in the business of providing loan facilities to micro, small and medium sized enterprises and sole proprietors in Hubei province of the People’s Republic of China (“PRC”). The Group operates its microfinance lending business through the 80% variable interest entity (“VIE”) operating company, Hubei Chutian Microfinance Co., Ltd (“Chutian”). All of the Group’s operations are conducted in the PRC through Chutian. The Group operates the microfinance lending business in the PRC on the basis of the approval certificates, business license and other requisite licenses held by Chutian. The Group generates virtually all revenues of the business through the VIE Agreements. The following is a brief description of each of the Company’s subsidiaries: • True Silver – True Silver Limited (“True Silver”) is a limited company incorporated on June 28, 2016, a British Virgin Islands company. The total amount of paid-up share capital of True Silver is $50,000 with 50,000 ordinary shares. True Silver is a holding company and is wholly owned by the Company. • Chutian HK. Chutian Financial Holdings (Hong Kong) Limited (“Chutian HK”) is a limited company incorporated on August 12, 2016, under the Companies Ordinance of Hong Kong. The total amount of paid-up share capital of Chutian HK is HKD10,000 with 100 ordinary shares. Chutian HK is a holding company and is wholly owned by True Silver. • Chutian Holding. Wuhan Chutian Investment Holding Limited (“Chutian Holding”) is a wholly foreign owned enterprise established by Chutian HK on November 4, 2016. Chutian Holding has been issued a Business License (unified social credit code: 91420100MA4KPA0H54) by Wuhan Administration for Industry and Commerce on November 4, 2016, and a Recordation Receipt for Establishment of Foreign-Invested Enterprises (recordation No.: Wu Shang Zi Bei 201600006) issued by the Wuhan Commercial Bureau on October 19, 2016. Chutian Holding is a holding company and is wholly owned by Chutian HK. • Chutian. Hubei Chutian Microfinance Co., Ltd. is a joint stock company incorporated under laws of PRC on February 20, 2013. Chutian currently holds a business license issued by the Administrative Approval Bureau of Wuchang District, Wuhan Municipality on April 25, 2017, which allows it to operate a microfinance business and provides individual and business loans to persons residing in and businesses operating in Hubei Province, China. Through a series of contractual agreements (VIE Agreements), Chutian Holding is deemed to control 80% of Chutian and have rights to consolidate 80% of Chutian’s financial results. As of December 31, 2018, the Company’s subsidiaries and variable interest entity are as follows: Subsidiary Place of incorporation Particular of issued and fully paid up capital Group’s effective interest Held by the Company Held by a subsidiary Principal activities True Silver Limited British Virgin Islands US$50,000 100 % 100 % - Investment holding Chutian Financial Holdings (Hong Kong) Limited Hong Kong HK$10,000 100 % - 100 % Investment holding Wuhan Chutian Investment Holdings Co. Ltd PRC USD3,000,000 100 % - 100 % Investment holding Variable interest entity Hubei Chutian Microfinance Co., Ltd PRC RMB450,000,000 80 % - 80 % Microfinance lenders The VIE arrangements The following is a brief description of the VIE Agreements entered into on August 10, 2017, between Chutian Holding and the shareholders of Chutian, through which the Company controls 80% of Chutian: • Exclusive Consigned Management Service Agreement • Exclusive Purchase Option Agreement • Shareholders’ Voting Proxy Agreement (a) to attend and participate in the shareholders’ meetings of Chutian as the voting proxy of the Shareholders holding 80% Equity Interests of Chutian; (b) to vote on the matters proposed at the shareholders’ meetings, including, but not limited to, voting on the appointment and election of the directors and supervisors of Chutian; (c) to suggest convening the shareholders’ meetings of Chutian; and (d) all other voting rights entitled to the shareholders of Chutian as stipulated in the articles of association of Chutian, as amended from time to time. • Share Pledge Agreement Through the above contractual arrangements, Chutian Holdings, has obtained 80% of shareholders' voting interest in the VIEs, has the right to receive all dividends declared and paid by the VIEs and may receive substantially all of the net income of the VIEs through the technical support and service fees as determined by Chutian Holdings at its sole discretion. Accordingly, the Group has consolidated the VIEs because the Group believes, through the contractual arrangements, (1) Chutian Holdings could direct the activities of the VIEs that most significantly affect its economic performance and (2) Chutian Holdings could receive substantially all of the benefits that could be potentially significant to the VIEs. Risks in relation to the VIE structure The Group believes that the VIE arrangements are in compliance with PRC law and are legally enforceable. The shareholders of the VIEs are also shareholders of the Group and therefore have no current interest in seeking to act contrary to the contractual arrangements. However, uncertainties in the PRC legal system could limit the Group's ability to enforce these contractual arrangements and if the shareholders of the VIEs were to reduce their interest in the Group, their interests may diverge from that of the Group and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing the VIEs not to pay the service fees when required to do so. The Group's ability to control the VIEs also depends on the authorization letters that Chutian Holdings has to vote on all matters requiring shareholder approval in the VIEs. As noted above, the Group believes the rights granted by the authorization letters is legally enforceable but may not be as effective as direct equity ownership. In addition, if the legal structure and contractual arrangements were found to be in violation of any existing PRC laws and regulations, the PRC government could: • revoke the business and operating licenses of the Group's PRC subsidiaries and affiliates; • discontinue or restrict the Group's PRC subsidiaries' and affiliates' operations; • impose conditions or requirements with which the Group or its PRC subsidiaries and affiliates may not be able to comply; or • require the Group or its PRC subsidiaries and affiliates to restructure the relevant ownership structure or operations; The imposition of any of these penalties may result in a material and adverse effect on the Group's ability to conduct the Group's business. In addition, if the imposition of any of these penalties causes the Group to lose the rights to direct the activities of the VIEs and its subsidiaries or the right to receive their economic benefits, the Group would no longer be able to consolidate the VIEs. The Group does not believe that any penalties imposed or actions taken by the PRC Government would result in the liquidation of the Group, Chutian Holdings, or the VIEs. Certain shareholders of VIEs are also beneficial owners or directors of the Company. In addition, certain beneficial owners and directors of the Company are also directors or officers of VIEs. Their interests as beneficial owners of VIEs may differ from the interests of the Company as a whole. The Company cannot be certain that if conflicts of interest arise, these parties will act in the best interests of the Company or that conflicts of interests will be resolved in the Company's favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest these parties may encounter in their capacity as beneficial owners of VIEs, on the one hand, and as beneficial owners of the Company, on the other hand. The Company believes the shareholders of VIEs will not act contrary to any of the contractual arrangements and the exclusive purchase right contract provides the Company with a mechanism to remove them as shareholders of VIEs should they act to the detriment of the Company. If any conflict of interest or dispute between the Company and the shareholders of VIEs arises and the Company is unable to resolve it, the Company would have to rely on legal proceedings in the PRC. Such legal proceedings could result in disruption of its business; moreover, there is substantial uncertainty as to the ultimate outcome of any such legal proceedings. The following financial statements information for the Company’s VIEs were included in the accompanying consolidated financial statements, presented net of intercompany eliminations, as of and for the years ended December 31: As of December 31, 2017 2018 RMB’000 RMB’000 Total current assets 853,185 599,931 Total non-current assets 15,266 50,833 Total assets 868,451 650,764 Total current liabilities 273,750 274,316 Total liabilities 273,750 274,316 For the year ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 Interest income on loans 104,896 119,639 141,857 Net profit 41,948 30,676 15,794 The VIEs contributed an aggregate of 100.0%, 100.0% and 100.0% of the consolidated interest income on loans for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, the VIEs accounted for an aggregate of 100.0% and 101.4%, respectively, of the consolidated total assets, and 99.3% and 99.9%, respectively, of the consolidated total liabilities. There are no consolidated VIEs' assets that are collateral for the VIEs' obligations and can only be used to settle the VIEs' obligations. There are no creditors (or beneficial interest holders) of the VIEs that have recourse to the general credit of the Company or any of its consolidated subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests, which require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholder of the VIEs or entrustment loans to the VIEs. On December 23, 2018, the State Council submitted the draft version of the Foreign Investment Law to the Standing Committee of the National People’s Congress, which was promulgated by the National People’s Congress on its official site on December 26, 2018 for public consultation until February 24, 2019. On March 15, 2019, the National People’s Congress approved the Foreign Investment Law, which On December 23, 2018, the PRC State Council submitted the draft version of the Foreign Investment Law to the Standing Committee of the National People’s Congress, which was promulgated by the National People’s Congress on its official site on December 26, 2018 for public consultation until February 24, 2019. On March 15, 2019, the National People’s Congress approved the Foreign Investment Law, which will come into effect on January 1, 2020 and replace the trio of existing laws regulating foreign investment in China, namely, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Cooperative Joint Venture Enterprise Law and the Wholly Foreign-invested Enterprise Law, together with their implementation rules and ancillary regulations. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies | |
2. Summary of significant accounting policies | This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial statements. These accounting policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the group consisting of Dunxin Financial Holdings Limited, its subsidiaries and variable interest entity (the “Group”). 2.1 Basis of preparation (i) Compliance with IFRS The consolidated financial statements of the Group have been prepared in accordance with applicable International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. (ii) Historical cost convention The financial statements have been prepared on a historical cost basis. (iii) Liquidity The Company had negative cash flows for the years ended December 31, 2018 and 2017, the net cash decreased during the year were RMB17.9 million and RMB75.1 million for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, we had cash balances totaled RMB3.2 million. The Company has taken an intensive review of operations and expenditures, including intensify loan and interest collection initiative, initiating a new supply chain lending business which is expected to bring in new revenue to the Company. The Company has also acquired the financial support letter from Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, and from Dunxin Holdings Co., Ltd, a company that is 70% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei and is 30% owned by Chief Personal/Human Resource Officer, Ms. Wenting Xiao, which have expressed the willingness and intention to provide the necessary financial support to the Company, so as to enable the Company to meet its liabilities as and when it falls due and to carry on its business without a significant curtailment of operations for the next 12 months from the issuance date of this report. The Company believes that available cash and cash equivalents, future cash provided by operating activities, together with the efforts from aforementioned management plan and actions, should enable the Company to meet presently anticipated cash needs for at least the next 12 months after the date that the financial statements are issued and the Company has prepared the consolidated financial statements on a going concern basis. However, the Company continues to have ongoing obligations and it expects that it will require additional capital in order to execute its longer-term business plan. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing the Company’s business development activities, suspending the pursuit of its business plan, controlling operating expenses and seeking to further dispose of non-core assets. Management cannot provide any assurance that the Company will raise additional capital if needed. 2.2 Basis of consolidation (i) Subsidiaries Subsidiaries are entities (including variable interest entity) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated in preparing the consolidated financial statements. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. (ii) Non-controlling interests Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statements of Profit and Other Comprehensive Income, the Consolidated Statements of Financial Position and Consolidated Statements of Changes in Equity respectively. 2.3 Business combinations The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the: • fair values of the assets transferred; • liabilities incurred to the former owners of the acquired business; • equity interests issued by the group; • fair value of any asset or liability resulting from a contingent consideration arrangement; and • fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are with limited exceptions, measured initially at their fair values at the acquisition date. The group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred. The excess of the • consideration transferred, • amount of any non-controlling interest in the acquired entity, and • acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase. 2.4 Segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the steering committee that makes strategic decisions. The Group operates in only one segment. 2.5 Foreign currency translation (i) Functional and presentation currency Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Chinese Renminbi (RMB), which is the Company’s presentation currency. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in the statement of profit and other comprehensive income. Foreign exchange gains and losses are presented in the Consolidated Statements of Profit and Other Comprehensive Income on a net basis within other income or other expenses. (iii) Group companies The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at the date of that consolidated statement of financial position; (b) income and expenses for each consolidated statement of profit and other comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (c) all resulting exchange differences are recognized in other comprehensive income. 2.6 Interest Interest (IFRS 9 - 2018 only) Interest income and expense for all financial instruments are recognized in “Net interest income” as “Interest income” and “Interest expense” in the Consolidated Statement of Profit and Other Comprehensive Income using the effective interest method. Interest income for financial assets held at amortized cost is recognized in profit or loss using the effective interest method. The effective interest rate is the rate that exactly discount estimated future cash payments or receipts through the expected life of the financial asset or financial liability (or, where appropriate, a shorter period) to the gross carrying amount of a financial asset (i.e. its amortized cost before any impairment allowance) or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument but does not consider expected credit losses and includes transaction costs, premiums or discounts and fees and points paid or received that are integral to the effective interest rate, such as origination fees. When the Group revises the estimates of future cash flows, the carrying amount of the respective financial assets or financial liability is adjusted to reflect the new estimate discounted using the original effective interest rate. Any changes are recognized in profit or loss. The interest income / interest expense is calculated by applying the effective interest rate to the gross carrying amount of non-credit impaired financial assets (i.e. at the amortized cost of the financial asset before adjusting for any expected credit loss allowance), or at amortized cost of financial liabilities. Interest income for financial assets that are amortized cost that have become credit-impaired subsequent to initial recognition is recognized using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective interest rate except that expected credit losses are included in the expected cash flows. Interest income is therefore recognized on the amortized cost of the financial asset including expected credit losses. Should the credit risk on a credit-impaired financial asset improve such that the financial asset is no longer considered credit-impaired, interest income recognition reverts to a computation based on the rehabilitated gross carrying value of the financial asset. Interest (IAS 18 – prior period only) The Group applied the revenue recognition requirements of IAS 18, “Revenue” (IAS 18). Revenue was recognized when the amount of revenue and associated costs could be reliably measured, it is probable that economic benefits associated with the transaction will be realized and the stage of completion of the transaction could be reliably measured. This concept was applied to the key revenue generating activities of the Group as follows. Interest from all interest-bearing assets and liabilities was recognized in “Net interest income” as “Interest income” and “Interest expense” in the Consolidated Statement of Profit and Other Comprehensive Income using the effective interest method. The effective interest rate is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or expense over the relevant period using the estimated future cash flows. The estimated future cash flows used in this calculation include those determined by the contractual terms of the asset or liability, all fees that are considered to be integral to the effective interest rate, direct and incremental transaction costs and all other premiums or discounts. 2.7 Income tax Income tax expense comprises current and deferred tax. It is recognized in the Consolidated Statements of Profit and Other Comprehensive Income. i. Current tax Current tax comprises the expected tax payable or receivable on taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantially enacted at the reporting date. ii. Deferred tax Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets or liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on business plans for individual subsidiaries and variable interest entity in the Group and the reversal of temporary differences. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantially enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. iii. Tax exposures In determining the amount of current and deferred tax, the Group considers the impact of tax exposures, including whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgments regarding the adequacy of existing tax liabilities; such changes to tax liabilities would impact tax expense in the period in which such a determination is made. 2.8 Financial assets and financial liabilities (IFRS 9 – 2018 only) i Initial recognition and measurement Financial assets and financial liabilities are recognized when the entity becomes a party to the contractual provisions of the instrument. At initial recognition, the Group measures a financial asset or financial liability at its fair value plus or minus transaction costs that are incremental and directly attributable to the acquisition or issue of the financial asset or financial liability, such as fees and commissions. Immediately after initial recognition, an expected credit loss allowance is recognized for financial assets measured at amortized cost, which results in an accounting loss being recognized in profit or loss when an asset is newly originated. ii Classification and subsequent measurement Management determines the classification of its financial assets and liabilities at initial recognition of the instrument or, where applicable, at the time of reclassification. Financial assets From January 1, 2018, the Group has applied IFRS 9 and classifies its financial assets into amortized cost measurement category. The Company’s financial assets that are held to collect the contractual cash flows and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) are measured at amortized cost. Financial liabilities The Group classifies its financial liabilities as measured at amortized cost. iii Derecognition Financial assets The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. In transactions in which the Group neither retains or transfers substantially all of the risks and rewards of ownership of a financial asset and its retains control over the asset, the Group continues to recognize the asset to the extent of its continuing involvement, determined by the extent to which its is exposed to changes in the value of the transferred asset. Financial liabilities The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. iv Amortized cost measurement The “amortized cost” of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. v. Identification and measurement of impairment IFRS 9 outlines a “three-stage” model for impairment based on changes in credit quality since initial recognition as summarized below: • A financial instrument that is not credit-impaired on initial recognition is classified in “Stage 1” and has its credit risk continuously monitored by the Group. • If a significant increase in credit risk since initial recognition is identified, the financial instrument is moved to “Stage 2” but is not yet deemed to be credit-impaired. • If the financial instrument is credit-impaired, the financial instrument is then moved to “Stage 3”. • Financial instruments in Stage 1 have their expected credit loss measured at an amount equal to the portion of lifetime expected credit losses that result from default events possible within the next 12 months. Financial instruments in Stages 2 or 3 have their expected credit loss measured based on expected credit losses on a lifetime basis. • A pervasive concept in measuring expected credit loss in accordance with IFRS 9 is that it should consider forward looking information. Significant increase in credit risk The Group monitors its financial assets that are subject to the impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk the Group will measure the loss allowance based on lifetime rather than 12-month expected credit loss. The Group’s accounting policy is not to use the practical expedient that financial assets with “low” credit risk at the reporting date are deemed not to have had a significant increase in credit risk. As a result, the Group monitors all financial assets that are subject to impairment for significant increase in credit risk. In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument at the reporting date based on the remaining maturity of the instrument with the risk of a default occurring that was anticipated for the remaining maturity at the current reporting date when the financial instrument was first recognized. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort, based on the Group’s historical experience and expert credit assessment including forward-looking information. The quantitative information is a primary indicator of significant increase in credit risk and is based on the change in lifetime probability of default by comparing: • the remaining lifetime probability of default at the reporting date; with • the remaining lifetime probability of default for this point in time that was estimated based on facts and circumstances at the time of initial recognition of the exposure. The probability of defaults used are forward looking and the Group uses the same methodologies and data used to measure the loss allowance for expected credit loss. The qualitative factors that indicate significant increase in credit risk are reflected in probability of default models on a timely basis. Given that a significant increase in credit risk since initial recognition is a relative measure, a given change, in absolute terms, in the probability of default will be more significant for a financial instrument with a lower initial probability of default than compared to a financial instrument with a higher probability of default. As a back-stop when an asset becomes 30 days past due, the Group considers that a significant increase in credit risk has occurred and the asset is in stage 2 of the impairment model, i.e. the loss allowance is measured as the lifetime expected credit loss. Credit-impaired financial assets A financial asset is “credit-impaired” when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Credit-impaired financial assets are referred to as Stage 3 assets. Evidence of credit-impairment includes observable data about the following events: • Significant financial difficulty of the borrower; • a breach of contract such as a default or past due event; or • the lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider. It may not be possible to identify a single discrete event – instead, the combined effect of several events may have caused financial assets to become credit-impaired. A loan is considered credit-impaired when a concession is granted to the borrower due to a deterioration in the borrower’s financial condition, unless there is evidence that as a result of granting the concession the risk of not receiving the contractual cash flows has reduced significantly and there are no other indicators of impairment. For financial assets where concessions are contemplated but not granted the asset is deemed credit impaired when there is observable evidence of credit-impairment including meeting the definition of default. The definition of default (see below) include unlikeliness to pay indicators. Definition of default Critical to the determination of expected credit loss is the definition of default. The definition of default is used in measuring the amount of expected credit loss and in the determination of whether the loss allowance is based on 12-month or lifetime expected credit loss, as default is a component of the probability of default which affects both the measurement of expected credit losses and the identification of a significant increase in credit risk. The Group considers the following as constituting an event of default: • the borrower is past due more than nine months on any material credit obligation to the Group; or • the borrower is unlikely to pay its credit obligations to the Group in full. When assessing if the borrower is unlikely to pay its credit obligation, the Group takes into account both qualitative and quantitative indicators. Quantitative indicators, such as overdue status and non-payment on another obligation of the same counterparty are key inputs in this analysis. The Group uses a variety of sources of information to assess default which are either developed internally or obtained from external sources. Objective evidence of impairment At each reporting date, the Group assesses whether there is objective evidence that financial assets are impaired. A financial asset or a group of financial assets is impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the assets and that the loss event has an impact on the future cash flows of the assets and that the loss event has an impact on the future cash flows of the assets that can be estimated reliably. Objective evidence that financial assets are impaired includes: • significant financial difficulty of the borrower; • default or delinquency by a borrower; • the restructuring of a loan by the Group on terms that the Group would not consider otherwise; • indications that a borrower will enter bankruptcy; or • observable data relating to a group of assets such as adverse changes in the payment status of borrowers in the group, or economic conditions that correlate with defaults in the group. Impairment measurement and recognition The Group recognizes loss allowance for expected credit loss on loan receivables. Expected credit losses are required to be measured through a loss allowance at an amount equal to: • 12-month expected credit loss, i.e. lifetime expected credit loss that result from those default events on the financial instrument that are possible within 12 months after the reporting date, (referred to as Stage 1); or • Full lifetime expected credit loss, i.e. lifetime expected credit loss that result from all possible default events over the life of the financial instrument, (referred to as Stage 2 and Stage 3). A loss allowance for full lifetime expected credit loss is required for a financial instrument if the credit risk on that financial instrument has increased significantly since initial recognition. For all other financial instruments, expected credit losses are measured at an amount equal to the 12-month expected credit loss. Expected credit losses are computed as unbiased, a probability-weighted estimate of the present value of credit losses. These are measured as the present value of the difference between the cash flows due to the Group under the contract and the cash flows that the Group expects to receive by evaluating a range of reasonably possible outcomes, the time value of money, and considering all reasonable and supportable information including that which is forward-looking, discounted at the asset’s effective interest rate. For Stage 1 and 2 loans, the estimate of expected cash shortfalls over the life time of the loans is determined by multiplying the probability of default (“PD”) with the loss given default (“LGD”). For credit-impaired financial instruments (Stage 3 loans), the estimate of cash shortfalls may require the use of expert credit judgment. Cash shortfalls are discounted using the effective interest rate on the financial instrument as calculated at initial recognition. Impairment measurement and recognition The Company’s initial contractual loan terms are within 12 months. For simplification purpose, for Stage 1 and Stage 2 loans, the Company recognized the expected credit losses for the lifetime of the loans. Stage 1: Expected credit losses are recognized at the time of initial recognition of a financial instrument and represent the lifetime cash shortfalls arising from possible default events for the life of loan from the balance sheet date. Expected credit losses continue to be determined on this basis until there is either a significant increase in the credit risk of an instrument or the instrument becomes credit-impaired. Stage 2: If a financial asset experiences a significant increase in credit risk since initial recognition, an expected credit loss provision is recognized for default events that may occur over the lifetime of the asset. Significant increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk of default at origination (after taking into account the passage of time). Significant does not mean statistically significant nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is significant or not is assessed using a number of quantitative and qualitative factors, the weight of which depends on the type of product and counterparty. Financial assets that are 30 or more days past due and not credit-impaired will always be considered to have experienced a significant increase in credit risk. Stage 3: Financial assets that are credit-impaired (or in default) represent those that are past due more than the historical average collection period for past due loans, but not to exceed the original contractual loan terms. Financial assets are also considered to be credit-impaired where the obligors are unlikely to pay on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash flows of the financial asset. It may not be possible to identify a single discrete event but instead the combined effect of several events may cause financial assets to become credit-impaired. Loss provisions against credit-impaired financial assets are determined based on an assessment of the recoverable cash flows under a range of scenarios, including the realization of any collateral held where appropriate. The loss provisions held represent the difference between the present value of the cash flows expected to be recovered, discounted at the instrument’s original effective interest rate, and the gross carrying value of the instrument prior to any credit impairment. 2.9 Financial assets and financial liabilities (IAS 39 – prior period only) i Recognition The Group initially recognizes loans and borrowings on the date on which they are originated. A financial asset or financial liability is measured initially at fair value plus transaction costs that are directly attributable to its acquisition or issue. ii Classification Financial assets The Group classifies its financial assets into loans and receivables. Financial liabilities The Group classifies its financial liabilities as measured at amortized cost. iii Derecognition Financial assets The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. In transactions in which the Group neither retains or transfers substantially all of the risks and rewards of ownership of a financial asset and its retains control over the asset, the Group continues to recognize the asset to the extent of its continuing involvement, determined by the extent to which its is exposed to changes in the value of the transferred asset. Financial liabilities The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. iv Amortized cost measurement The “amortized cost” of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount recognized and the maturity amount, minus any reduction for impairment. v. Identification and measurement of impairment Objective evidence of impairment At each reporting date, the Group assesses whether there is objective evidence that financial assets are impaired. A financial asset or a group of financial assets is impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the assets and that the loss event has an impact on the future cash flows of the asset(s) and that the loss event has an impact on the future cash flows of the asset(s) that can be estimated reliably. Objective evidence that financial assets are impaired includes: • significant financial difficulty of the borrower; • default or delinquency by a borrower; • the restructuring of a loan by the Group on terms that the Group would not consider otherwise; • indications that a borrower will enter bankruptcy; or • observable data relating to a group of assets such as adverse changes in the payment status of borrowers in the group, or economi |
Standards issued but not yet ef
Standards issued but not yet effective | 12 Months Ended |
Dec. 31, 2018 | |
Standards Issued But Not Yet Effective | |
3. Standards issued but not yet effective | Up to the date of issue of these financial statements, the following standards and interpretations had been issued which are not yet effective for the year ended December 31, 2018 and which have not been adopted in these financial statements. These include the following which may be relevant to the Group. Effective for accounting periods beginning on or after Interpretation 23 Uncertainty over Income Tax Treatments January 1, 2019 Annual Improvements to IFRS Standards 2015-2017 Cycle January 1, 2019 IFRS 16 Leases January 1, 2019 The Group completed the assessment of what the impact of these amendments, new standards and interpretations is expected to be in the period of initial application. So far the Group has identified certain aspects of IFRS 16 which may have a significant impact on the consolidated financial statements. Further details of the expected impacts are discussed below. While the assessment has been substantially completed for IFRS 16, the actual impacts upon the initial adoption of this standard may differ as the assessment completed to date is based on the information currently available to the Group, and further impacts may be identified before the standard is initially applied in the Group’s interim financial report for the six months ended June 30, 2019. The Group may also change its accounting policy elections, including the transition options, until the standards are initially applied in that financial report. IFRS 16 Leases In January 2016 the IASB issued IFRS 16 Leases. IFRS 16 replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases - Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosures of leases. This standard is effective for annual periods beginning on or after January 1, 2019. Early application is permitted for entities that apply IFRS 15 Revenue from Contracts with Customers at or before the date of initial application of IFRS 16. The Group is currently assessing impact of IFRS 16 on its consolidated financial statements. IFRS 16 will change how the Group accounts for leases previously classified as operating leases under IAS 17, which were off-balance sheet. On initial application of IFRS 16, for all leases, the Group will: (a) Recognise right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured at the present value of the future lease payments; (b) Recognize depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of profit or loss; and (c) Separate the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within operating activities) in the consolidated cash flow statement. Under IFRS 16, right-of-use assets will be tested for impairment in accordance with IAS 36 Impairment of Assets. This will replace the previous requirement to recognize a provision for onerous lease contracts. For short-term leases (lease term of 12 months or less) and leases of low-value assets, the Group will opt to recognize a lease expense on a straight-line basis as permitted by IFRS 16. As at December 31, 2018, the Group has non-cancellable operating lease commitments of RMB3.5 million. A preliminary assessment indicates that RMB3.3 million of these arrangements relate to leases other than short-term leases and leases of low-value assets, and hence the Group will recognize a right-of-use asset of RMB3.3 million and a corresponding lease liability of RMB3.3 million in respect of all these leases. For the entire duration of the lease, the impact on profit or loss is to decrease lease expenses by RMB3.5 million, to increase depreciation of right-of-use asset by RMB3.3 million and to increase interest expense by RMB0.2 million. For 2019, the impact on profit or loss is to decrease lease expense by RMB1,004,000 and to increase depreciation of right-of-use asset by RMB924,000 and to increase interest expense by RMB80,000. The preliminary assessment indicates that RMB8,000 of these arrangements relate to short-term leases. The Group does not have leases of low-value assets. There are no other IFRSs or related interpretations that are not yet effective that would be expected to have a material impact on the Group’s consolidated financial statements. |
Critical accounting estimates a
Critical accounting estimates and use of judgments | 12 Months Ended |
Dec. 31, 2018 | |
Critical Accounting Estimates And Use Of Judgments | |
4. Critical accounting estimates and use of judgments | In preparing these consolidated financial statements, management are required to make judgments, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors that are considered to be relevant, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are recognized prospectively. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. i. Measurement of the expected credit loss allowance The measurement of the expected credit loss allowance for financial assets measured at amortized cost is an area that requires the use of significant assumptions about future economic conditions and credit behavior (e.g. the likelihood of customers defaulting and the resulting losses). A number of significant judgements are also required in applying the accounting requirements for measuring expected credit loss, such as: • Determining criteria for significant increase in credit risk; • Choosing appropriate models and assumptions for the measurement of expected credit loss. Further details of identification and measurement of expected credit loss impairment were discussed in Note 2.8 of Notes to the Consolidated Financial Statements. ii. Allowance for interest receivable Management assesses the collectability of interest receivable from loan customer and estimates the allowance for interest receivable from customers. The Group reviews the interest receivable on a periodic basis and makes allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual interest receivable balance, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current creditworthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. Management reassesses the allowance for interest receivable at each statement of financial position date and revises the allowance for interest receivable accordingly. iii. Income tax The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of event that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. International Accounting Standard 12 Income Taxes (“IAS12”) requires a one-step approach that provides a company to satisfy the probability criterion when assessing whether a deferred tax account should be recorded or not. Under this criterion, the Company record a deferred tax account only to the extent it can show it is probable that taxable profit will be available against which the deferred tax asset can be utilized. Current IAS 12 does not have specific guidance on uncertain tax positions. The Company measures tax assets and liabilities at the amount expected to be paid, based on enacted or substantively enacted tax legislation. Interest and penalties related to uncertain tax position are recognized and recorded as necessary in the provision for income taxes. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computation errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. The PRC tax returns for the Company's PRC subsidiaries are open to examination by tax authorities for the tax years beginning in 2018. There were no uncertain tax positions as of December 31, 2018 and 2017 and the Company does not believe that its unrecognized tax benefits will change over the next twelve months. iv. Impairment of property and equipment The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company assesses the recoverability of the property and equipment by comparing the carrying value of the property and equipment to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition where the fair value is lower than the carrying value, measurement of an impairment loss is recognized in the consolidated statements of operations for the difference between the fair value, using the expected future discounted cash flows, and the carrying value of the assets. No impairment of property and equipment was recognized for the periods presented. |
Credit risk
Credit risk | 12 Months Ended |
Dec. 31, 2018 | |
Credit Risk | |
5. Credit risk | Credit risk is the risk that a customer or counterparty fail to fulfill its contractual obligations resulting in financial loss to the Group. The Group’s main income generating activity is lending to customers and therefore credit risk is a principal risk. Credit risk mainly arises from loans to customers. The Group considers all elements of credit risk exposure such as counterparty default risk for risk management purposes. Credit risk management The Group’s credit committee is responsible for managing the Group’s credit risk by: • Ensuring that the Group has appropriate credit risk practices, including an effective system of internal control, to consistently determine adequate allowances in accordance with the Group’s stated policies and procedures, IFRS and relevant supervisory guidance. • Identifying, assessing and measuring credit risk across the Group, from an individual loan to a portfolio level. • Creating credit policies to protect the Group against the identified risks including the requirements to obtain collateral from borrowers, to perform robust ongoing credit assessment of borrowers and to continually monitor exposures against internal risk limits. • Establishing a robust control framework regarding the authorization structure for the approval and renewal of credit facilities. • Developing and maintaining the Group’s processes for measuring expected credit loss including monitoring of credit risk, incorporation of forward looking information and the method used to measure expected credit loss. • Ensuring that the Group has policies and procedures in place to appropriately maintain and validate methods used to assess and measure expected credit loss. • Establishing a sound credit risk accounting assessment and measurement process that provides it with a strong basis for common systems, tools and data to assess credit risk and to account for expected credit loss. Providing advice, guidance and specialist skills to business units to promote best practice throughout the Group in the management of credit risk. Maximum exposure to credit risk – Financial instruments subject to impairment The following table contains an analysis of the credit risk exposure of financial instruments for which an expected credit loss allowance is recognized. The gross carrying amount of financial assets below also represents the Group’s maximum exposure to credit risk on these assets. 2018 2017 ECL staging Stage 1 Stage 2 Stage 3 Total Total Lifetime ECL Lifetime ECL Lifetime ECL RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Loan receivables 24,100 101,150 698,520 823,770 818,114 Accrued interest - - 153,181 153,181 - Gross loan receivables 24,100 101,150 851,701 976,951 818,114 Loss allowance (3,919 ) (20,498 ) (372,880 ) (397,297 ) (26,724 ) Carrying amount 20,181 80,652 478,821 579,654 791,390 |
Liquidity risk
Liquidity risk | 12 Months Ended |
Dec. 31, 2018 | |
Liquidity Risk | |
6. Liquidity risk | Liquidity risk is the risk that the Group does not have sufficient financial resources to meet its obligations as they fall due, or will have to do so at an excessive cost. This risk arises from mismatches in the timing of cash flows which is inherent in lending operations and can be affected by a range of Group-specific and market-wide events. Liquidity risk management The Group established a comprehensive policy and control framework for managing liquidity risk. The Group’s treasury department is responsible for managing the Group’s liquidity risk via monitoring borrowing and managing relationship with several securities exchanges. The Group’s treasury department executes the Group’s liquidity and funding strategy in co-operation with lending department of the Group. According to relevant laws and regulations, the funds obtained by a microfinance company from banking financial institutions may not exceed 50% of its net capital. As of December 31, 2018, the Group does not have funds obtained from banking financial institutions. |
Market risk
Market risk | 12 Months Ended |
Dec. 31, 2018 | |
Market Risk | |
7. Market risk | The main non-trading risk types are interest rates and credit spreads. Interest rate risk may result in of loss from fluctuations in the future cash flows. Interest rate risk is managed principally through monitoring interest rate gaps and basis risk. Credit spreads reflect the credit risk of the loans to customers, i.e. risk that a customer or counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group’s credit risk exposure and the related management process are described in note 5. The following table set out the carrying amount of assets and liabilities subject to market risk: As of December 31, 2017 2018 RMB’000 RMB’000 Assets subject to market risk Loan receivables 791,390 579,654 Liabilities subject to market risk Loans payable 226,370 200,417 There has been no change to the manner in which the Group manages and measures it’s market exposure in the current year. |
Capital risk
Capital risk | 12 Months Ended |
Dec. 31, 2018 | |
Capital Risk | |
8. Capital risk | As of December 31, 2018, there is no administrative regulatory authority for the microfinance industry at the national level. According to the Guiding Opinions on the Pilot Operation of Microfinance Companies, jointly issued by the CBRC and the PBOC on May 4, 2008, any provincial government that is able to assign a department, financial office or other similar authority to take charge of the supervision and administration of microfinance companies and is willing to assume the responsibility of risk management of microfinance companies may formulate pilot rules and measures in relation to the incorporation of such companies within the province, autonomous region or municipalities directly under the PRC government. Therefore, the microfinance industry in the PRC is primarily regulated by the financial offices and other similar authorities of the provincial governments of the relevant provinces. In Hubei Province, the Microfinance Work Joint Session and its office are the regulatory authorities for microfinance companies in Hubei Province. Pursuant to the Measures for Administration of Pilot Scheme on Microfinance Companies in Hubei Province On February 6, 2013, the Group’s variable interest entity, Hubei Chutian Microfinance Co., Ltd (“VIE”), was issued an Official Reply (E Jin Ban Fa No. [2013]14) by the Financial Office of People’s Government of Hubei, which approved VIE under the pilot program as a microfinance company, as proposed by the Wuchang People’s Government. According to the relevant laws and regulations applicable in the Hubei Province, the capital requirement for the microfinance industry is that the registered capital shall not be less than RMB50 million. As of December 31, 2018, the registered capital of the VIE was RMB450 million. There is no other capital requirement from the regulatory authority. |
Fair value of financial assets
Fair value of financial assets and liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Of Financial Assets And Liabilities | |
9. Fair value of financial assets and liabilities | The Group’s financial instruments consist of non-derivative financial assets and liabilities. The fair value of these non-derivative financial instruments is determined using internally generated valuation models, which are usually developed from generally accepted valuation models. The majority of the significant inputs into these models may not be observable in the market, and may be derived from interest rates based on assumptions. The selection of the appropriate valuation model, as well as the determination of key inputs used such as the expected future cash flows on the financial instrument, the probability of counterparty default and the appropriate discount rate to be used, require management judgment and estimation. As of December 31, 2018 Fair value Carrying amount RMB’000 RMB’000 Financial assets Cash and cash equivalents 3,188 3,188 Loan receivables 578,063 579,654 582,842 582,842 Financial liabilities Loans payable 203,837 200,417 As of December 31, 2017 Fair value Carrying Amount restated RMB’000 RMB’000 Financial assets Cash and cash equivalents 21,717 21,717 Loan receivables 826,036 791,390 847,753 813,107 Financial liabilities Loans payable 231,810 226,370 |
Income before taxes
Income before taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Before Taxes | |
10. Income before taxes | Expenses by nature Year Ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 Depreciation 526 441 818 Directors salaries and related costs 312 234 1,815 social benefits contribution - - 130 share based compensation - - 589 Key management personnel (other than directors) salaries and related costs 364 1,160 3,501 social benefits contribution - 174 150 share based compensation - - 100 Other than directors and key management personnel salaries and related costs 7,119 6,198 1,863 social benefits contribution 409 398 452 |
Income tax expense
Income tax expense | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Expense | |
11. Income tax expense | The Company is a tax exempted company incorporated in the Cayman Islands. In addition, dividend payments by the Company are not subject to withholding taxes. No provision for Hong Kong Profits Tax has been made as the subsidiary incorporated in Hong Kong had no assessable profits earned or derived from Hong Kong during the years ended December 31, 2016, 2017 and 2018. Payments of dividends by Hong Kong companies are not subject to Hong Kong withholding tax. The subsidiaries incorporated in the PRC other than Hong Kong are governed by the Income Tax Law of the PRC concerning Foreign Investment and Foreign Enterprises and various local income tax laws. Dividends paid by our PRC operating subsidiaries may be subject to withholding taxes of 5%-10%. The Company does not have any deferred tax assets or liabilities as of December 31, 2016, 2017 and 2018. Year Ended December 31, 2016 2017 Restated 2018 RMB’000 RMB’000 RMB’000 Current income tax expenses 15,221 15,550 18,033 Deferred income tax expenses - - - Income tax expense 15,221 15,550 18,033 The reconciliation between tax expense and accounting profit at applicable tax rates of 25% is as follows: Year Ended December 31, 2016 2017 restated 2018 RMB’000 RMB’000 RMB’000 Income before taxation 57,169 44,376 26,188 Computed expected income tax expense 14,292 11,094 6,547 Tax effect of non-deductible expenses 929 592 17,173 Tax effect of tax-exempt entities - 3,864 1,884 Tax effect of non-taxable income - - (7,571 ) Income tax expense 15,221 15,550 18,033 |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share | |
12. Earnings per share | Basic and diluted earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the year. The weighted average ordinary shares outstanding were 227,715,692, 236,180,071 and 1,000,171,839 for 2016, 2017 and 2018, respectively. Prior to December 17, 2014, each American Depository Share (“ADS”) represented the right to receive four (4) ordinary shares, par value $0.00005 per share (the “Shares”), from December 18, 2014, the right to receive sixteen (16) Shares and from December 28, 2017, the right to receive forty-eight (48) Shares. Computation of basic and diluted earnings per share 2016 Restated RMB’000 2017 Restated RMB’000 2018 RMB’000 Net profit attributable to the equity holders of the Company – numerator for basic and diluted earnings per share 33,558 23,061 6,524 Number of shares in thousands Weighted average share outstanding – denominator for basic and diluted earnings per share 227,717 236,180 1,000,172 Basic and diluted earnings per share 0.15 0.10 0.01 |
Cash and cash equivalents
Cash and cash equivalents | 12 Months Ended |
Dec. 31, 2018 | |
Cash And Cash Equivalents | |
13. Cash and cash equivalents | As at December 31, 2017 2018 RMB’000 RMB’000 Cash on hand 23 39 Cash at bank 21,694 3,149 Cash and cash equivalent per consolidated statements of cash flow 21,717 3,188 |
Interest receivables, net of cr
Interest receivables, net of credit impairment losses | 12 Months Ended |
Dec. 31, 2018 | |
Interest Receivables Net Of Credit Impairment Losses | |
14. Interest receivables, net of credit impairment losses | As at December 31, 2017 2018 RMB’000 RMB’000 Interest receivables 40,136 8,839 Less: credit impairment losses (508 ) (1,782 ) Interest receivable, net of credit impairment losses 39,628 7,057 The Group reviews the interest receivables on a periodic basis and makes credit impairment losses when there is doubt as to the collectability of individual balance. The table below provides the changes in credit impairment losses between the beginning and the end of the annual period: As at December 31, 2017 2018 RMB’000 RMB’000 Credit impairment losses as at January 1 1,919 508 Changes on initial application of IFRS 9 - 1,944 Reversal (1,411 ) (670 ) Credit impairment losses as at December 31 508 1,782 |
Loans receivable, net of credit
Loans receivable, net of credit impairment losses | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable Net Of Credit Impairment Losses | |
15. Loans receivable, net of credit impairment losses | The total loans receivable are comprised of the following: As at December 31, 2017 2018 RMB’000 RMB’000 Loans receivable at amortized cost 818,114 823,770 Accrued interest - 153,181 Gross loans receivable 818,114 976,951 Less: Credit impairment losses (26,724 ) (397,297 ) Loans receivable, net of credit impairment losses 791,390 579,654 The following table provides the changes in credit impairment losses between the beginning and the end of the annual period: As at December 31, 2017 2018 RMB’000 RMB’000 Credit impairment losses as at January 1 21,733 26,724 Changes on initial application of IFRS 9 - 304,238 Charge to statement of profit 4,991 67,574 Write-off - (1,239 ) Credit impairment losses as at December 31 26,724 397,297 The write-off of loans with a total gross carrying amount of RMB1.2 million resulted in the reduction of credit impairment losses by the same amount. The Group originates loans to customers located primarily in Wuhan City, Hubei Province. This geographic concentration of credit exposes the Group to a higher degree of risk associated with this economic region. |
Prepaid expenses and others
Prepaid expenses and others | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expenses And Others | |
16. Prepaid expenses and others | Prepaid expenses and others consist of the following: As at December 31, 2017 2018 RMB’000 RMB’000 Prepaid rental to a shareholder (1) 418 448 Receivable from a related party (2) - 251 Prepaid expenses 63 184 Others 2 155 Total 483 1,038 _____________ (1) See Note 29 of Notes to the Consolidated Financial Statements, section 1. Lease of office space from a shareholder for detailed disclosure. (2) See Note 29 of Notes to the Consolidated Financial Statements, section 2. Subleasing income with a related party for detailed disclosure. |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property And Equipment | |
17. Property and equipment | The Group’s property and equipment consisted of the following: Property Motor vehicle Office equipment & furniture Leasehold improvements Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Cost At January 1, and December 31, 2017 - 995 408 1,158 2,561 Additions 47,908 - 631 2,765 51,304 At December 31, 2018 47,908 995 1,039 3,923 53,865 Accumulated depreciation At January 1, 2017 - 680 388 714 1,782 Addition - 209 - 232 441 At December 31, 2017 - 889 388 946 2,223 Depreciation 470 87 3 258 818 At December 31, 2018 470 976 391 1,204 3,041 Net book value At December 31, 2017 - 106 20 212 338 At December 31, 2018 47,438 19 648 2,719 50,824 Apart from RMB29.8 million office space property mentioned in Note 18, another property related to a unit of 606 square meters office space that the Group foreclosed on a loan of RMB18 million in 2018. At December 31, 2018, the office space was initially measured at cost. |
Prepayment for a property
Prepayment for a property | 12 Months Ended |
Dec. 31, 2018 | |
Prepayment For Property | |
18. Prepayment for a property | In 2017, the Group paid the down payment of RMB14.9 million for a property of approximately 1,492 square meters of office space in Wuhan City, Hubei Province from a third party. The remaining payments of RMB14.9 million were paid in 2018 and the total amount of RMB29.8 million was capitalized as property in 2018. |
Intangible asset
Intangible asset | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Asset | |
19. Intangible asset | Acquired computer software RMB’000 Cost At January 1, and December 31, 2017 - Additions 9 At December 31, 2018 9 Accumulated amortization At January 1, and December 31, 2017 and 2018 - Net book value At December 31, 2017 - At December 31, 2018 9 |
Loans payable
Loans payable | 12 Months Ended |
Dec. 31, 2018 | |
Loans Payable | |
20. Loans payable | Loans payable represent borrowings from various individuals and companies through various securities exchanges and loans from shareholders. The average annual interest rates was approximately 9.7% and 9.6% at December 31, 2017 and 2018, respectively. As at December 31, 2017 2018 RMB’000 RMB’000 Loans payable to third parties 216,370 110,917 Loans payable to related parties (1) - 79,500 Loan payable to a shareholder (2) 10,000 10,000 Total 226,370 200,417 During the year, the Company entered into a number of financing agreements with Nanjing Securities Exchange for about RMB32.9 million and accounted for these arrangements as loans payable. Those agreements have due days ranging from September 2018 to January 2019. As of December 31, 2018, about RMB25.8 million loans payable were outstanding. The Company is in negotiation with Nanjing Securities Exchange to reschedule the outstanding balance over ten monthly instalments from October 2018 to November 2019. As of March 31, 2019, the outstanding loans payable was RMB15.9 million due to repayments. _________ (1) See Note 29 of Notes to the Consolidated Financial Statements, sub-sections 3.1 and 3.2 of Section 3. Loans payable to related parties for detailed disclosure. (2) See Note 29 of Notes to the Consolidated Financial Statements, sub-section 4.1 of Section 4. Loans payable to shareholders for detailed disclosure. |
Advance from customers
Advance from customers | 12 Months Ended |
Dec. 31, 2018 | |
Advance From Customers | |
21. Advance from customers | Advances from customers represent prepayment of interest from customers that have not yet been earned. The Group will recognize the advance from customers as interest in accordance with the Group’s interest income recognition policy (See Note 2.6). |
Salary and benefit payable
Salary and benefit payable | 12 Months Ended |
Dec. 31, 2018 | |
Salary And Benefit Payable | |
22. Salary and benefit payable | As at December 31, 2017 2018 RMB’000 RMB’000 Salary and benefit payable to employees 2,907 895 Consulting expenses payable to a shareholder’s representatives (1) 516 516 Total 3,423 1,411 ____________ (1) See Note 29 of Notes to the Consolidated Financial Statements, Section 5. Consulting expenses for representatives from a shareholder for detailed disclosure. |
Interest payable
Interest payable | 12 Months Ended |
Dec. 31, 2018 | |
Interest Payable | |
23. Interest payable | As at December 31, 2017 2018 RMB’000 RMB’000 Interest payable to third parties 3,796 3,234 Interest payable to related parties (1) - 1,662 Interest payable to a shareholder (2) 33 243 Total 3,829 5,139 ___________ (1) See Note 29 of Notes to the Consolidated Financial Statements, sub-sections 3.1 and 3.2 of Section 3. Loans payable to related parties for detailed disclosure. (2) See Note 29 of Notes to the Consolidated Financial Statements, sub-section 4.1 of Section 4. Loans payable to shareholders for detailed disclosure. |
Other payable
Other payable | 12 Months Ended |
Dec. 31, 2018 | |
Other Payable | |
24. Other payable | As at December 31, 2017 restated 2018 RMB’000 RMB’000 Other payable to related parties (1) 15,682 27,804 Accrued expenses 7,032 5,734 Other taxes payable 4,002 1,722 Total 26,716 35,260 __________ (1) See Note 29 of Notes to the Consolidated Financial Statements, Section 6. Reverse merger expenses payable to a related party, Section 7. Advisory expenses with a related party, Section 8. Intermediary agreement with a related party and Section 9. Funds provided by related parties for payments to certain loans payable for detailed disclosure. |
Share capital and additional pa
Share capital and additional paid-in capital | 12 Months Ended |
Dec. 31, 2018 | |
Share Capital And Additional Paid-in Capital | |
25. Share capital and additional paid-in capital | (a) Authorized share capital In June 2010, the Company was incorporated in the Cayman Islands with an authorized share capital of one billion shares, par value of US$0.00005, of which 20,000 shares were issued at incorporation. On March 1, 2018, the authorized share capital of the Company increased from US$50,000 divided into 1,000,000,000 Ordinary Shares of a par value of US$0.00005 each to US$100,000 divided into 2,000,000,000 Ordinary Shares of a par value of US$0.00005 each by the creation of an additional 1,000,000,000 Ordinary Shares of a par value of US$0.00005 each to rank pari passu in all respects with the existing Ordinary Shares. (b) Issued share capital and additional paid-in capital Number of shares Ordinary shares Additional paid-in capital Total Non- controlling interest Total equity (thousands) RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 At January 1, 2017 227,717 77 395,924 396,001 99,000 495,001 Shares issued during the year 772,283 248 (222 ) 26 7 33 Share issuance expenses - - (12,528 ) (12,528 ) (3,132 ) (9,231 ) At December 31, 2017 1,000,000 325 383,174 383,499 95,875 479,374 Shares issued during the year 862 1 - 1 - 1 At December 31, 2018 1,000,862 326 383,174 383,500 95,875 479,375 |
Statutory reserve
Statutory reserve | 12 Months Ended |
Dec. 31, 2018 | |
Statutory Reserve | |
26. Statutory reserve | In accordance with the relevant laws and regulations of the PRC, the entities established in the PRC are required to transfer 10% of profits after taxation (in accordance with the accounting regulations of the PRC) to a statutory reserve, until the reserve balance reaches 50% of the entity’s registered capital. The reserve may be used to offset accumulated losses or to increase the registered capital, subject to approval from the PRC authorities, and are not available for dividend distribution to equity owners. As of December 31, 2017 (restated) and 2018, total statutory reserves were RMB16.7 million and RMB17.5 million, respectively, which did not reach 50% of the variable interest entity’s registered capital. |
General risk reserve
General risk reserve | 12 Months Ended |
Dec. 31, 2018 | |
General Risk Reserve | |
27. General risk reserve | In accordance with the relevant laws and regulations of the PRC, the Group’s variable interest entity is required to maintain a general risk reserve within the equity, through appropriation of profit, which should not be less than 1.5% of the year end balance of its risk assets over the course of five years. As of December 31, 2017 (restated) and 2018, total statutory reserves were RMB12.3 million and RMB12.4 million, respectively. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments | |
28. Commitments | Lease commitment In September 2012, the Group entered into a ten-year operating lease agreement, from October 8, 2012 to October 7, 2022, with Hubei Daily Media Group, a shareholder owning 20% of the Group’s variable interest entity, in Wuhan City, Hubei Province, where the Group leased approximately 1,673 square meters of office space. The lease amount is RMB1.0 million per year for the first five years and RMB1.1 million per year for the last five years. As at December 31 2017 Restated 2018 RMB’000 RMB’000 Less than one year 584 584 Between one and five years 3,953 2,899 Total 4,537 3,483 Capital commitment Significant capital expenditure contracted for at the end of the reporting period but not recognized as liabilities is as follows: As at December 31 2017 2018 RMB’000 RMB’000 Property and equipment - 21 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
29. Related party transactions | 1. Lease of office space from a shareholder In September 2012, a ten-year operating lease agreement from October 8, 2012 to October 7, 2022 was entered into with Hubei Daily Media Group, a shareholder who owned 20% of the variable interest entity, in Wuhan City, Hubei Province, where office space of approximately 1,673 square meters was leased and the office is located at 6th Floor, Block 1, Hubei Daily Cultural Creative Industrial Park, No 181 Donghu Road, Wuchang District, Wuhan City, Hubei Province, China. The lease amount is RMB1.0 million per year for the first five years and RMB1.1 million per year for the last five years. The lease expenses of RMB1.1 million, RMB1.2 million and RMB1.3 million were incurred for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, prepaid rental to a shareholder were RMB0.4 million and RMB0.4 million, respectively. 2. Subleasing income with a related party In 2016, 2017 and 2018, a subleasing agreement was entered into with Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, to sublease office spaces of approximately 304 square meters for RMB0.2 million, RMB0.2 million and RMB0.2 million, respectively. As of December 31, 2017 and 2018, receivable from a related party was nil and RMB0.3 million, respectively. 3. Loans payable to related parties 3.1 In 2018, loans payable of RMB60.0 million were borrowed from a related party, Hubei Shanyin Wealth Management Co., Ltd, a company that is 69.5% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, at an interest rate of 9% per annum with maturity ranging from August to October 2019. The interest expenses were RMB1.4 million in 2018. As of December 31, 2018, loans payable were RMB60.0 million and the related interest payable was RMB1,403,000. 3.2 In 2018, loans payable of RMB20.0 million were borrowed from a related party, Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, at an interest rate of 12% per annum and repayable in November 2019. In December 2018, loan of RMB0.5 million was repaid. The interest expenses were RMB0.3 million in 2018. As of December 31, 2018, loans payable were RMB19.5 million and the related interest payable was RMB259,000. 3.3 In 2018, loans payable of RMB8.0 million were borrowed from a related party, Hubei New Chutaifu Asset Management Co., Ltd, a company that is 50% owned by Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, at an interest rate of 8% per annum and the loan duration was 97 days. The interest expenses were RMB0.2 million in 2018. The loan and related interest payable were fully repaid in 2018. 4. Loans payable to shareholders 4.1 In June 2017, a loan payable of RMB10.0 million was borrowed from Wang Hailin, a shareholder who owned 7.7% of the variable interest entity, at 10% interest per annum. The interest expenses for this loan were RMB0.5 million and RMB1.3 million in 2017 and 2018, respectively. According to the loan extension agreement, the loan of RMB10.0 million is at interest rate of 15% per annum with additional 9% penalty interest per annum and repayable in February 2019. Subsequent to year end, this loan payable was further extended to repayment date in September 2019, at 15% interest per annum with additional 9% penalty interest. As of December 31, 2017 and 2018, loans payable were RMB10.0 million and RMB10.0 million, respectively. As of December 31, 2017 and 2018, interest payable was RMB33,000 and RMB243,000, respectively. 4.2 In April 2016, a loan payable of RMB6.0 million was borrowed from Wang Hailin, a shareholder who owned 7.7% of the variable interest entity, at 10% per annum interest from April 2016 to November 2016. The Group paid RMB0.4 million for interest on the loan from Wang Hailin. The loan and related interest payable were fully repaid in 2016. 4.3 In July 2016, a loan payable of RMB2.0 million was borrowed from Li Ling, a shareholder who owned 2.5% of the variable interest entity, at 10% per annum interest from July 2016 to November 2016. The Group paid RMB0.1 million for interest on the loan from Li Ling. The loan and related interest payable were fully repaid in 2016. 4.4 In 2017, loans payable of RMB28.6 million were borrowed from Li Ling, a shareholder who owned 2.5% of the variable interest entity, at 10% per annum interest from January 2017 to December 2017. The Group paid RMB1.2 million for interest on the loan from Li Ling. The loan and related interest payable were fully repaid in 2017. 4.5 In 2018, a loan payable of RMB5.0 million was borrowed from Li Ling, a shareholder who owned 2.5% of the variable interest entity, at 10% per annum for 230 days. The interest expense on this borrowing was RMB0.3 million in 2018. The loan and related interest payable were fully repaid in 2018. 4.6 In 2016 and 2017, loans payable of RMB42.0 million and RMB14.0 million were borrowed from Hubei Daily Media Group, a shareholder which owned 20% of the variable interest entity, respectively. The weighted average annual interest rates for interest expenses on these borrowings were 10.3% and 10.0% in 2016 and 2017, respectively. The average duration for these borrowings was 128 days and 209 days in 2016 and 2017, respectively. The interest expenses on these borrowings were RMB2.6 million and RMB0.8 million in 2016 and 2017, respectively. The loans and related interest payable were fully repaid in 2017. 5. Consulting expenses for representatives from a shareholder Consulting expenses of RMB0.5 million, RMB0.5 million and RMB0.5 million were incurred for two representatives sent from Hubei Daily Media Group, a shareholder who owned 20% of the variable interest entity, for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, consulting expenses payable to these representatives were RMB0.5 million and RMB0.5 million, respectively. 6. Reverse merger expenses payable to a related party. During the reverse merger process of the Company, a related party, Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, paid reverse merger expenses on behalf of the Company, totaling RMB11.3 million and RMB10.9 million for the year ended December 31, 2017 and 2018, respectively. As of December 31, 2017 and 2018, reverse merger expenses payable to a related party was RMB11,257,000 and RMB22,203,000, respectively. 7. Advisory expenses with a related party In 2016, 2017 and 2018, an advisory agreement was entered into with Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, to provide funding advisory services at 2% per annum on funds raised through Wuhan Securities Exchanges for RMB3.9 million, RMB2.5 million and RMB0.7 million, respectively. As of December 31, 2017 and 2018, advisory expense payable was RMB3,521,000 and RMB4,235,000, respectively. 8. Intermediary agreement with a related party In 2016, an intermediary agreement was entered into with Chutian Wealth (Wuhan) Financial Services Co., Ltd, a subsidiary jointly owned by Hubei New Nature Investment Co., Ltd and Hubei Daily Media Group, to assist in fund raising through Wuhan Securities Exchange at 6% per annum on funds raised. In 2016, 2017 and 2018, the intermediary fees were RMB0.2 million, RMB5.3 million and RMB1.7 million, respectively. As of December 31, 2017 and 2018, intermediary fee payable to a related party was RMB904,000 and nil, respectively. 9. Funds provided by related parties for payments to certain loans payable. In 2018, fund of RMB954,000 was provided by Wuhan Xin Heng Tai Investment Co., Ltd and fund of RMB412,000 was provided by Wuhan Zhong Ji Gold Co., Ltd for payments to certain loans payable, interest payable and listing service fee. Wuhan Xin Heng Tai Investment Co., Ltd is related to Ms Wenting Xiao, a shareholder who owned 10.6% of the Group’s variable interest entity, whom is a general manager with Wuhan Xin Heng Tai Investment Co., Ltd. Wuhan Zhong Ji Gold Co., Ltdis also related to Ms Wenting Xiao whom is a member of the supervisory committee with Wuhan Zhong Ji Gold Co., Ltd. These funds were provided without interest and with no fixed terms of repayment. As of December 31, 2018, payables to related parties were RMB1,366,000. 10. Loans receivable from related parties 10.1 In 2016, loans receivable of RMB8.0 million were lent to Hubei Baoli Ecological Conservation Co., Ltd at an interest rate of 36% per annum. The loan was guaranteed by Ms. Jing Liang, a shareholder who owned 4.3% of the variable interest entity. The interest received on the loan was RMB2.4 million, nil and nil for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2018, this loan was overdue. 10.2 In 2016, loans receivable of RMB3.0 million were lent to Kang Chen at an interest rate of 36% per annum. The loan was guaranteed by Ms. Jing Liang, a shareholder who owned 4.3% of the variable interest entity. The interest received on the loan was RMB1.0 million, nil and nil for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2018, this loan was overdue. 10.3 In 2017, loans receivable of RMB18.0 million were lent to Wuhan Zhong Ji Gold Co., Ltd at a weighted average interest rate of 25.3% per annum. The loan was related to Ms Wenting Xiao, a shareholder who owned 10.6% of the variable interest entity, whom is a member of the supervisory committee with Wuhan Zhong Ji Gold Co., Ltd. The interest received on loan was RMB6.5 million for the year ended December 31, 2017. This loan was fully repaid in 2017. 10.4 In 2017, loans receivable of RMB19.0 million were lent to Wuhan Xin Heng Tai Investment Co., Ltd at a weighted average interest rate of 24.9% per annum. The loan was related to Ms Wenting Xiao, a shareholder who owned 10.6% of the variable interest entity, whom is a general manager with Wuhan Xin Heng Tai Investment Co., Ltd. The interest received on loan was RMB4.9 million for the year ended December 31, 2017. This loan was fully repaid in 2017. |
Correction of errors
Correction of errors | 12 Months Ended |
Dec. 31, 2018 | |
Correction Of Errors | |
30. Correction of errors | Subsequent to the filing of Form 20F for the financial year ended December 31, 2017, management identified the following accounting errors: 1. The Group had over accrued certain interest expenses of RMB4,349,000 which should have been recorded in the year of 2018. This error understated the net profit of RMB4,349,000 in 2017, overstated other payable of RMB3,618,000 and overstated interest payable of RMB731,000 as of December 31, 2017. 2. There was a total of RMB14,604,000 payable for expenses related to the reverse merger and equity transaction should have been accrued for as of December 31, 2017. RMB8,175,000 was determined to be related to the reverse merger while RMB6,429,000 was determined to be related to the equity transaction. These errors caused an overstatement of net profit in the amount of RMB8,175,000, understatement of other payable of RMB14,604,000 and overstatement of shareholders’ equity of RMB6,429,000 (or RMB5,143,000 after accounted for non-controlling interests). 3. Income tax impact for the errors stated in 1 and 2 above totaled RMB269,000 which understated the net profit for the year ended December 31, 2017. 4. The Group overstated deferred tax assets of RMB645,000 of December 31, 2017. As a result, such deferred tax asset was being reversed. This error overstated net profit by RMB645,000 for the year ended December 31, 2017. 5. The Group incorrectly computed earnings per share using net profit, instead of using net profit attributable to equity holders of the Company. Basic and diluted earnings per share impact for errors stated in 1, 2, 3, 4 and 5 was RMB0.04 per share. 6. The Group incorrectly classified a deposit of RMB14,928,000 to purchase certain floors of an office building as prepaid expenses – current. Due to non-current nature of property and equipment to be acquired, such deposit should be classified as non-current as of December 31, 2017. 7. The Group incorrectly accrued the statutory reserve and general risk reserve in accordance with the PRC regulatory requirements. As a result, under the equity section, the statutory reserve was understated by RMB7,017,000 (or RMB5,614,000 after accounted for non-controlling interests), general risk reserve was understated by RMB4,908,000 (or RMB3,926,000 after accounted for non-controlling interests) and retained earnings were overstated by RMB11,925,000 (or RMB9,540,000 after accounted for non-controlling interests). 8. The Group classified loan receivables in cash flow from investing activities as originated loan disbursement and repayments of loans from customers. However, since the Group’s principal business activities is to provide loan to customers to earn interest income, such activities should be considered as operating activities. As a result, cash flows generated by operating activities was overstated by RMB121,040,000 and RMB213,138,000 for the year ended December 31, 2017 and 2016, respectively. While cash flows used in investing activities was overstated by RMB121,040,000 and RMB213,138,000 for the year ended December 31, 2017 and 2016, respectively. 9. The Group understated proceeds received from shareholders’ loans by RMB38,600,000 and repayment of shareholders’ loans by RMB38,600,000 for the year ended December 31, 2017. The net result of both items was nil. There was no impact to the net cash generated by financing activities. 10. The Group understated proceeds received from shareholders’ loans by RMB48,000,000 and repayments of shareholders’ loans by RMB58,000,000 for the year ended December 31, 2016. There was no impact to the net cash generated by financing activities As a result, the financial statements for the years ended December 31, 2017 and 2016 have been restated, respectively, as follows: December 31, 2017 Statement of profit and other comprehensive income (extract) As previously reported Adjustments As currently reported RMB’000 RMB’000 RMB’000 Interest expense (note 30.1) (38,140 ) 4,349 (33,791 ) Total interest expense (38,814 ) 4,349 (34,465 ) General and administrative (note 30.2) (26,720 ) (8,175 ) (34,895 ) Total operating costs and expenses (29,858 ) (8,175 ) (38,033 ) Profit before income taxes (notes 30.1 and 30.2) 48,202 (3,826 ) 44,376 Income tax expense (notes 30.3 and 30.4) (14,636 ) (914 ) (15,550 ) Net profit 33,566 (4,740 ) 28,826 Basic and diluted earnings per share (note 30.5) 0.14 (0.04 ) 0.10 Balance sheet (extract) As of December 31, 2017 Restatement Adjustments As previously reported Adjustments Other impacts As currently reported RMB’000 RMB’000 RMB’000 RMB’000 Current assets Prepaid expenses and others (note 30.6) 15,411 - (14,928 ) 483 Total current assets 868,146 - (14,928 ) 853,218 Non-current assets Prepayment for a property (note 30.6) - - 14,928 14,928 Deferred tax asset (note 30.5) 645 (645 ) - - Total non-current assets 983 (645 ) 14,928 15,266 Total assets 869,129 (645 ) - 868,484 Current liabilities Income taxes payable (note 30.3) 14,851 269 - 15,120 Interest payable (note 30.1) 4,560 (731 ) - 3,829 Other payable (notes 30.1 and 30.2) 15,730 10,986 - 26,716 Total current liabilities 265,076 10,524 - 275,600 Shareholders’ equity Additional paid-in capital (note 30.2) 388,317 (5,143 ) - 383,174 Statutory reserve (note 30.7) 7,751 - 5,614 13,365 General risk reserve (note 30.7) 5,891 - 3,926 9,817 Retained earnings 80,958 (3,792 ) (9,540 ) 67,626 Non-controlling interests in equity 120,811 (2,234 ) - 118,577 Total shareholders’ equity 604,053 (11,169 ) - 592,884 Total equity and liabilities 869,129 (645 ) - 868,484 December 31, 2017 Cash flow Statement (extract) As previously reported Adjustments Other impacts As currently reported RMB’000 RMB’000 RMB’000 RMB’000 Cash flow from operating activities Profit before income taxes (notes 30.1 and 30.2) 48,202 (3,826 ) - 44,376 Credit impairment losses 6,402 - (2,822 ) 3,580 Operating profit before changes in working capital 55,045 (3,826 ) (2,822 ) 48,397 Interest receivables (22,309 ) - 2,822 (19,487 ) Loans receivable (note 30.8) - - (121,040 ) (121,040 ) Interest payable (note 30.1) 1,333 (731 ) - 602 Other payable (notes 30.1 and 30.2) 13,046 10,986 - 24,032 Net cash generated/(used) by operating activities 58,585 6,429 (121,040 ) (56,026 ) Net cash generated/(used) by operating activities 44,192 6,429 (121,040 ) (70,419 ) Cash flow from investing activities Originated loan disbursements (note 30.8) (397,190 ) - 397,190 - Repayments of loans from customers (note 30.8) 276,150 - (276,150 ) - Net cash used in investing activities (135,968 ) - 121,040 (14,928 ) Cash flow from financing activities Share issuance expenses (note 30.2) (9,198 ) (6,429 ) - (15,627 ) Proceeds received from shareholders’ loans (note 30.9) 14,000 - 38,600 52,600 Repayment of shareholders’ loans (note 30.9) (4,000 ) - (38,600 ) (42,600 ) Proceeds received from loans payable (note 30.9) 402,300 - (38,600 ) 363,700 Repayment of loans payable (note 30.9) (386,400 ) - 38,600 (347,800 ) Net cash generated by financing activities 16,702 (6,429 ) - 10,273 December 31, 2016 Cash flow Statement (extract) As previously reported Other impacts As currently reported RMB’000 RMB’000 RMB’000 Cash flow from operating activities Loans receivable (note 30.8) - (213,138 ) (213,138 ) Net cash generated/(used) by operating activities 38,167 (213,138 ) (174,971 ) Net cash generated/(used) by operating activities 16,708 (213,138 ) (196,430 ) Cash flow from investing activities Originated loan disbursements (note 30.8) (446,264 ) 446,264 - Repayments of loans from customers (note 30.8) 233,126 (233,126 ) - Net cash used in investing activities (213,138 ) 213,138 - Cash flow from financing activities Proceeds received from shareholders’ loans (note 30.10) 2,000 48,000 50,000 Repayments of shareholders’ loans (note 30.10) (2,000 ) (58,000 ) (60,000 ) Proceeds received from loans payable (note 30.10) 384,240 (48,000 ) 336,240 Repayments of loans payable (note 30.10) (332,990 ) 58,000 (274,990 ) |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
31. Subsequent events | We evaluated events that occurred subsequent to December 31, 2018 for disclosure in the consolidated financial statements and notes to the consolidated financial statements. On February 22, 2019, the Board of Directors of the Company approved the grant of restricted stock units under the Company’s 2010 Equity Incentive Plan to certain directors and an executive officer at a total of 1,077,010 ordinary shares and with a vesting schedule on a quarterly basis. In 2019, the Company will be issuing 1,077,010 ordinary shares to certain directors and an executive officer as a share-based compensation. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies Policies Abstract | |
Basis of preparation | (i) Compliance with IFRS The consolidated financial statements of the Group have been prepared in accordance with applicable International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. (ii) Historical cost convention The financial statements have been prepared on a historical cost basis. (iii) Liquidity The Company had negative cash flows for the years ended December 31, 2018 and 2017, the net cash decreased during the year were RMB17.9 million and RMB75.1 million for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, we had cash balances totaled RMB3.2 million. The Company has taken an intensive review of operations and expenditures, including intensify loan and interest collection initiative, initiating a new supply chain lending business which is expected to bring in new revenue to the Company. The Company has also acquired the financial support letter from Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, and from Dunxin Holdings Co., Ltd, a company that is 70% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei and is 30% owned by Chief Personal/Human Resource Officer, Ms. Wenting Xiao, which have expressed the willingness and intention to provide the necessary financial support to the Company, so as to enable the Company to meet its liabilities as and when it falls due and to carry on its business without a significant curtailment of operations for the next 12 months from the issuance date of this report. The Company believes that available cash and cash equivalents, future cash provided by operating activities, together with the efforts from aforementioned management plan and actions, should enable the Company to meet presently anticipated cash needs for at least the next 12 months after the date that the financial statements are issued and the Company has prepared the consolidated financial statements on a going concern basis. However, the Company continues to have ongoing obligations and it expects that it will require additional capital in order to execute its longer-term business plan. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing the Company’s business development activities, suspending the pursuit of its business plan, controlling operating expenses and seeking to further dispose of non-core assets. Management cannot provide any assurance that the Company will raise additional capital if needed. |
Basis of consolidation | (i) Subsidiaries Subsidiaries are entities (including variable interest entity) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated in preparing the consolidated financial statements. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. (ii) Non-controlling interests Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statements of Profit and Other Comprehensive Income, the Consolidated Statements of Financial Position and Consolidated Statements of Changes in Equity respectively. |
Business combinations | The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the: • fair values of the assets transferred; • liabilities incurred to the former owners of the acquired business; • equity interests issued by the group; • fair value of any asset or liability resulting from a contingent consideration arrangement; and • fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are with limited exceptions, measured initially at their fair values at the acquisition date. The group recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related costs are expensed as incurred. The excess of the • consideration transferred, • amount of any non-controlling interest in the acquired entity, and • acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase. |
Segments | Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the steering committee that makes strategic decisions. The Group operates in only one segment. |
Foreign currency translation | (i) Functional and presentation currency Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Chinese Renminbi (RMB), which is the Company’s presentation currency. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in the statement of profit and other comprehensive income. Foreign exchange gains and losses are presented in the Consolidated Statements of Profit and Other Comprehensive Income on a net basis within other income or other expenses. (iii) Group companies The results and financial position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) assets and liabilities for each consolidated statement of financial position presented are translated at the closing rate at the date of that consolidated statement of financial position; (b) income and expenses for each consolidated statement of profit and other comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (c) all resulting exchange differences are recognized in other comprehensive income. |
Interest | Interest (IFRS 9 - 2018 only) Interest income and expense for all financial instruments are recognized in “Net interest income” as “Interest income” and “Interest expense” in the Consolidated Statement of Profit and Other Comprehensive Income using the effective interest method. Interest income for financial assets held at amortized cost is recognized in profit or loss using the effective interest method. The effective interest rate is the rate that exactly discount estimated future cash payments or receipts through the expected life of the financial asset or financial liability (or, where appropriate, a shorter period) to the gross carrying amount of a financial asset (i.e. its amortized cost before any impairment allowance) or to the amortized cost of a financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument but does not consider expected credit losses and includes transaction costs, premiums or discounts and fees and points paid or received that are integral to the effective interest rate, such as origination fees. When the Group revises the estimates of future cash flows, the carrying amount of the respective financial assets or financial liability is adjusted to reflect the new estimate discounted using the original effective interest rate. Any changes are recognized in profit or loss. The interest income / interest expense is calculated by applying the effective interest rate to the gross carrying amount of non-credit impaired financial assets (i.e. at the amortized cost of the financial asset before adjusting for any expected credit loss allowance), or at amortized cost of financial liabilities. Interest income for financial assets that are amortized cost that have become credit-impaired subsequent to initial recognition is recognized using the credit adjusted effective interest rate. This rate is calculated in the same manner as the effective interest rate except that expected credit losses are included in the expected cash flows. Interest income is therefore recognized on the amortized cost of the financial asset including expected credit losses. Should the credit risk on a credit-impaired financial asset improve such that the financial asset is no longer considered credit-impaired, interest income recognition reverts to a computation based on the rehabilitated gross carrying value of the financial asset. Interest (IAS 18 – prior period only) The Group applied the revenue recognition requirements of IAS 18, “Revenue” (IAS 18). Revenue was recognized when the amount of revenue and associated costs could be reliably measured, it is probable that economic benefits associated with the transaction will be realized and the stage of completion of the transaction could be reliably measured. This concept was applied to the key revenue generating activities of the Group as follows. Interest from all interest-bearing assets and liabilities was recognized in “Net interest income” as “Interest income” and “Interest expense” in the Consolidated Statement of Profit and Other Comprehensive Income using the effective interest method. The effective interest rate is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or expense over the relevant period using the estimated future cash flows. The estimated future cash flows used in this calculation include those determined by the contractual terms of the asset or liability, all fees that are considered to be integral to the effective interest rate, direct and incremental transaction costs and all other premiums or discounts. |
Income tax | Income tax expense comprises current and deferred tax. It is recognized in the Consolidated Statements of Profit and Other Comprehensive Income. i. Current tax Current tax comprises the expected tax payable or receivable on taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantially enacted at the reporting date. ii. Deferred tax Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets or liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on business plans for individual subsidiaries and variable interest entity in the Group and the reversal of temporary differences. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantially enacted at the reporting date. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. iii. Tax exposures In determining the amount of current and deferred tax, the Group considers the impact of tax exposures, including whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes the Group to change its judgments regarding the adequacy of existing tax liabilities; such changes to tax liabilities would impact tax expense in the period in which such a determination is made. |
Financial assets and financial liabilities (IFRS 9 2018 only) | i Initial recognition and measurement Financial assets and financial liabilities are recognized when the entity becomes a party to the contractual provisions of the instrument. At initial recognition, the Group measures a financial asset or financial liability at its fair value plus or minus transaction costs that are incremental and directly attributable to the acquisition or issue of the financial asset or financial liability, such as fees and commissions. Immediately after initial recognition, an expected credit loss allowance is recognized for financial assets measured at amortized cost, which results in an accounting loss being recognized in profit or loss when an asset is newly originated. ii Classification and subsequent measurement Management determines the classification of its financial assets and liabilities at initial recognition of the instrument or, where applicable, at the time of reclassification. Financial assets From January 1, 2018, the Group has applied IFRS 9 and classifies its financial assets into amortized cost measurement category. The Company’s financial assets that are held to collect the contractual cash flows and which contain contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest (“SPPI”) are measured at amortized cost. Financial liabilities The Group classifies its financial liabilities as measured at amortized cost. iii Derecognition Financial assets The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. In transactions in which the Group neither retains or transfers substantially all of the risks and rewards of ownership of a financial asset and its retains control over the asset, the Group continues to recognize the asset to the extent of its continuing involvement, determined by the extent to which its is exposed to changes in the value of the transferred asset. Financial liabilities The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. iv Amortized cost measurement The “amortized cost” of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance. v. Identification and measurement of impairment IFRS 9 outlines a “three-stage” model for impairment based on changes in credit quality since initial recognition as summarized below: • A financial instrument that is not credit-impaired on initial recognition is classified in “Stage 1” and has its credit risk continuously monitored by the Group. • If a significant increase in credit risk since initial recognition is identified, the financial instrument is moved to “Stage 2” but is not yet deemed to be credit-impaired. • If the financial instrument is credit-impaired, the financial instrument is then moved to “Stage 3”. • Financial instruments in Stage 1 have their expected credit loss measured at an amount equal to the portion of lifetime expected credit losses that result from default events possible within the next 12 months. Financial instruments in Stages 2 or 3 have their expected credit loss measured based on expected credit losses on a lifetime basis. • A pervasive concept in measuring expected credit loss in accordance with IFRS 9 is that it should consider forward looking information. Significant increase in credit risk The Group monitors its financial assets that are subject to the impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. If there has been a significant increase in credit risk the Group will measure the loss allowance based on lifetime rather than 12-month expected credit loss. The Group’s accounting policy is not to use the practical expedient that financial assets with “low” credit risk at the reporting date are deemed not to have had a significant increase in credit risk. As a result, the Group monitors all financial assets that are subject to impairment for significant increase in credit risk. In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument at the reporting date based on the remaining maturity of the instrument with the risk of a default occurring that was anticipated for the remaining maturity at the current reporting date when the financial instrument was first recognized. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort, based on the Group’s historical experience and expert credit assessment including forward-looking information. The quantitative information is a primary indicator of significant increase in credit risk and is based on the change in lifetime probability of default by comparing: • the remaining lifetime probability of default at the reporting date; with • the remaining lifetime probability of default for this point in time that was estimated based on facts and circumstances at the time of initial recognition of the exposure. The probability of defaults used are forward looking and the Group uses the same methodologies and data used to measure the loss allowance for expected credit loss. v. Identification and measurement of impairment - continued The qualitative factors that indicate significant increase in credit risk are reflected in probability of default models on a timely basis. Given that a significant increase in credit risk since initial recognition is a relative measure, a given change, in absolute terms, in the probability of default will be more significant for a financial instrument with a lower initial probability of default than compared to a financial instrument with a higher probability of default. As a back-stop when an asset becomes 30 days past due, the Group considers that a significant increase in credit risk has occurred and the asset is in stage 2 of the impairment model, i.e. the loss allowance is measured as the lifetime expected credit loss. Credit-impaired financial assets A financial asset is “credit-impaired” when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Credit-impaired financial assets are referred to as Stage 3 assets. Evidence of credit-impairment includes observable data about the following events: • Significant financial difficulty of the borrower; • a breach of contract such as a default or past due event; or • the lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider. It may not be possible to identify a single discrete event – instead, the combined effect of several events may have caused financial assets to become credit-impaired. A loan is considered credit-impaired when a concession is granted to the borrower due to a deterioration in the borrower’s financial condition, unless there is evidence that as a result of granting the concession the risk of not receiving the contractual cash flows has reduced significantly and there are no other indicators of impairment. For financial assets where concessions are contemplated but not granted the asset is deemed credit impaired when there is observable evidence of credit-impairment including meeting the definition of default. The definition of default (see below) include unlikeliness to pay indicators. Definition of default Critical to the determination of expected credit loss is the definition of default. The definition of default is used in measuring the amount of expected credit loss and in the determination of whether the loss allowance is based on 12-month or lifetime expected credit loss, as default is a component of the probability of default which affects both the measurement of expected credit losses and the identification of a significant increase in credit risk. The Group considers the following as constituting an event of default: • the borrower is past due more than nine months on any material credit obligation to the Group; or • the borrower is unlikely to pay its credit obligations to the Group in full. When assessing if the borrower is unlikely to pay its credit obligation, the Group takes into account both qualitative and quantitative indicators. Quantitative indicators, such as overdue status and non-payment on another obligation of the same counterparty are key inputs in this analysis. The Group uses a variety of sources of information to assess default which are either developed internally or obtained from external sources. Objective evidence of impairment At each reporting date, the Group assesses whether there is objective evidence that financial assets are impaired. A financial asset or a group of financial assets is impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the assets and that the loss event has an impact on the future cash flows of the assets and that the loss event has an impact on the future cash flows of the assets that can be estimated reliably. Objective evidence that financial assets are impaired includes: • significant financial difficulty of the borrower; • default or delinquency by a borrower; • the restructuring of a loan by the Group on terms that the Group would not consider otherwise; • indications that a borrower will enter bankruptcy; or • observable data relating to a group of assets such as adverse changes in the payment status of borrowers in the group, or economic conditions that correlate with defaults in the group. Impairment measurement and recognition The Group recognizes loss allowance for expected credit loss on loan receivables. Expected credit losses are required to be measured through a loss allowance at an amount equal to: • 12-month expected credit loss, i.e. lifetime expected credit loss that result from those default events on the financial instrument that are possible within 12 months after the reporting date, (referred to as Stage 1); or • Full lifetime expected credit loss, i.e. lifetime expected credit loss that result from all possible default events over the life of the financial instrument, (referred to as Stage 2 and Stage 3). A loss allowance for full lifetime expected credit loss is required for a financial instrument if the credit risk on that financial instrument has increased significantly since initial recognition. For all other financial instruments, expected credit losses are measured at an amount equal to the 12-month expected credit loss. Expected credit losses are computed as unbiased, a probability-weighted estimate of the present value of credit losses. These are measured as the present value of the difference between the cash flows due to the Group under the contract and the cash flows that the Group expects to receive by evaluating a range of reasonably possible outcomes, the time value of money, and considering all reasonable and supportable information including that which is forward-looking, discounted at the asset’s effective interest rate. For Stage 1 and 2 loans, the estimate of expected cash shortfalls over the life time of the loans is determined by multiplying the probability of default (“PD”) with the loss given default (“LGD”). For credit-impaired financial instruments (Stage 3 loans), the estimate of cash shortfalls may require the use of expert credit judgment. Cash shortfalls are discounted using the effective interest rate on the financial instrument as calculated at initial recognition. Impairment measurement and recognition The Company’s initial contractual loan terms are within 12 months. For simplification purpose, for Stage 1 and Stage 2 loans, the Company recognized the expected credit losses for the lifetime of the loans. Stage 1: Expected credit losses are recognized at the time of initial recognition of a financial instrument and represent the lifetime cash shortfalls arising from possible default events for the life of loan from the balance sheet date. Expected credit losses continue to be determined on this basis until there is either a significant increase in the credit risk of an instrument or the instrument becomes credit-impaired. Stage 2: If a financial asset experiences a significant increase in credit risk since initial recognition, an expected credit loss provision is recognized for default events that may occur over the lifetime of the asset. Significant increase in credit risk is assessed by comparing the risk of default of an exposure at the reporting date to the risk of default at origination (after taking into account the passage of time). Significant does not mean statistically significant nor is it assessed in the context of changes in expected credit loss. Whether a change in the risk of default is significant or not is assessed using a number of quantitative and qualitative factors, the weight of which depends on the type of product and counterparty. Financial assets that are 30 or more days past due and not credit-impaired will always be considered to have experienced a significant increase in credit risk. Stage 3: Financial assets that are credit-impaired (or in default) represent those that are past due more than the historical average collection period for past due loans, but not to exceed the original contractual loan terms. Financial assets are also considered to be credit-impaired where the obligors are unlikely to pay on the occurrence of one or more observable events that have a detrimental impact on the estimated future cash flows of the financial asset. It may not be possible to identify a single discrete event but instead the combined effect of several events may cause financial assets to become credit-impaired. Loss provisions against credit-impaired financial assets are determined based on an assessment of the recoverable cash flows under a range of scenarios, including the realization of any collateral held where appropriate. The loss provisions held represent the difference between the present value of the cash flows expected to be recovered, discounted at the instrument’s original effective interest rate, and the gross carrying value of the instrument prior to any credit impairment. |
Financial assets and financial liabilities (IAS 39 prior period only) | i Recognition The Group initially recognizes loans and borrowings on the date on which they are originated. A financial asset or financial liability is measured initially at fair value plus transaction costs that are directly attributable to its acquisition or issue. ii Classification Financial assets The Group classifies its financial assets into loans and receivables. Financial liabilities The Group classifies its financial liabilities as measured at amortized cost. iii Derecognition Financial assets The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. In transactions in which the Group neither retains or transfers substantially all of the risks and rewards of ownership of a financial asset and its retains control over the asset, the Group continues to recognize the asset to the extent of its continuing involvement, determined by the extent to which its is exposed to changes in the value of the transferred asset. Financial liabilities The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. iv Amortized cost measurement The “amortized cost” of a financial asset or financial liability is the amount at which the financial asset or financial liability is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount recognized and the maturity amount, minus any reduction for impairment. v. Identification and measurement of impairment Objective evidence of impairment At each reporting date, the Group assesses whether there is objective evidence that financial assets are impaired. A financial asset or a group of financial assets is impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the assets and that the loss event has an impact on the future cash flows of the asset(s) and that the loss event has an impact on the future cash flows of the asset(s) that can be estimated reliably. Objective evidence that financial assets are impaired includes: • significant financial difficulty of the borrower; • default or delinquency by a borrower; • the restructuring of a loan by the Group on terms that the Group would not consider otherwise; • indications that a borrower will enter bankruptcy; or • observable data relating to a group of assets such as adverse changes in the payment status of borrowers in the group, or economic conditions that correlate with defaults in the group. Individual and collective assessment The Group considers evidence of impairment for loans at both a specific asset and a collective level. All individually significant loans are assessed for specific impairment. Those found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Loans that are not individually significant are collectively assessed for impairment by grouping together loans with similar risk characteristics. The individual component of the total allowance for impairment applies to financial assets evaluated individually for impairment, and found to be individually impaired, and is based on management’s best estimate of the present value of the cash flows that are expected to be received. In estimating these cash flows, management makes judgements about a debtor’s financial situation and the net realizable value of any underlying collateral. Each impaired asset is assessed on its merits, and the workout strategy and estimate of cash flows considered recoverable are independently approved by the Credit Risk function. A collective component of the total allowance is established for groups of loans that are individually significant but that were not found to be individually impaired (loss “incurred but not reported” or IBNR). The IBNR allowance covers credit losses inherent in portfolios of loans with similar credit risk characteristics when there is objective evidence to suggest that they contain impaired terms but the individual impaired items cannot yet be identified. The IBNR allowance is based on historical loss rates, adjusted to reflect the current economic conditions affecting the portfolio. It reflects assumptions made about the loss emergence period i.e. the period between a loss event occurring and it being identified. Management estimates a loss emergence period for each identified portfolio and back-tests these estimates against past experience. The factors that may influence the loss emergence period include economic and market conditions, customer behavior, credit management process and collective experience. In assessing the collective loss allowance, management considers factors such as credit quality, concentrations and economic factors. To estimate the required allowance, assumptions are made to define how inherent losses are modeled and to determine the required input parameters, based on historical experience and current economic conditions. The accuracy of the allowance depends on the model assumptions and parameters used in determining the collective allowance. Measurement Impairment losses on assets measured at amortized costs are calculated as the difference between the carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. Impairment losses are recognized in the Consolidated Statement of Profit and Other Comprehensive Income and reflected in an allowance for loan losses account against loans. If an event occurring after the impairment was recognized causes the amount of impairment loss to decrease, then the decrease in impairment loss is reversed in the Consolidated Statement of Profit and Other Comprehensive Income. |
Cash and cash equivalents | For the purpose of the consolidated cash flow statements, cash and cash equivalents consist of cash on hand, balances with banks and time deposits with banks with original maturity of three months or less. |
Property and equipment | Property and equipment are initially measured at cost. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to the working condition and location for its intended use. Expenditure incurred after property and equipment have been put into operation, such as repairs and maintenance, is normally expensed in the period in which incurred. Property and equipment are subsequently measured at cost less accumulated depreciation. Property and equipment are depreciated on a straight-line basis, considering any estimated residual value, over the estimated useful lives of the assets. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The estimated useful lives of the assets are as follows: Estimated useful life Property 20 years Leasehold improvement 5 years Vehicles 5 years Office equipment and furniture 3 years |
Intangible assets | Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives of five years. |
Impairment of non-financial assets | At each reporting date, the Group reviews the carrying amounts of its non-financial assets to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that is largely independent of the cash inflows of other assets. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognized if the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in the Consolidated Statement of Profit and Other Comprehensive Income. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. |
Provisions | A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. |
Share-based payments | In December 2010, the Company established the 2010 Equity Incentive Plan to help recruit and retain key employees, directors or consultants by providing incentives through the granting of equity awards. Under the 2010 Equity Incentive Plan, the Company may issue equity awards in the form of share options, restricted shares, or share appreciation rights. The maximum aggregate number of ordinary shares that may be issued pursuant to all awards is 23,200,000. No awards were made under the plan during the years ended December 31, 2016 and 2017. For the year ended December 31, 2018, a total of 862,148 ordinary shares were issued to certain directors and a key employee as a share-based compensation. The Group recognizes share-based compensation in relation to awards issued under the 2010 Equity Incentive Plan in the Consolidated Statements of Profit and Other Comprehensive Income based on the fair value of the equity awards on the date of the grant, and considering any applicable performance criteria and estimated forfeitures, with compensation expense recognized over the period in which the recipient is required to provide service to the Group in exchange for the equity award. The estimation of share awards that ultimately vest requires judgment, and to the extent actual results differ from estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. The Company will consider various factors when estimating expected forfeitures, including historical experience. Actual results may differ substantially from these estimates. The fair value of share options granted to employees and directors under the 2010 Equity Incentive Plan is determined using option pricing models, which consider the exercise price relative to the market value of the underlying shares, the expected share price volatility, the risk-free interest rate and the dividend yield, and the estimated period of time option grants are outstanding before they are ultimately exercised. For shares granted to employees, the fair value of the shares is measured as the difference between the market price of the Company’s ordinary shares, adjusted to take into account the terms and conditions upon which the shares were granted (except for vesting conditions that are excluded from the measurement of fair value) and the purchase price of the grant. Adjustments to the market price of the ordinary shares could arise, for example, if the employee is not entitled to receive dividends during the vesting period. |
Social benefits contributions | Pursuant to the relevant regulations of the PRC government, the Group’s PRC subsidiaries participate in a local municipal government social benefits plan, and is required to contribute a certain percentage of the basic salaries of its employees to fund their retirement benefits. The local municipal government undertakes to assume the retirement benefits obligations of all existing and future retired employees. The Group’s only obligation is to pay the ongoing required contributions. Contributions are charged to expense as incurred. There are no provisions whereby forfeited contributions may be used to reduce future contributions. Amounts contributed during the years ended December 31, 2016, 2017 and 2018, are discussed in Note 10. |
Value added tax ("VAT") | Interest income in the PRC are subject to VAT at 6% (output VAT). Input tax on purchases can be deducted from output VAT. The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of other receivables or other payables in the Consolidated Statement of Financial Position. Revenues, expenses and assets are recognized net of VAT except: • where the VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the VAT is recognized as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • receivables and payables are stated with VAT included. |
Share capital | The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided. These incremental costs include registration and other regulatory fees, amounts paid to legal, accounting and other professional advisors, printing costs and stamp duties, excluding management salaries, items normally included in general and administrative expenses or other recurring costs. Specifically, legal and accounting fees do not include any fees that would have been incurred in the absence of such issuance. |
Earnings per shares | The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss that is attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss that is attributable to ordinary shareholders and the weighted-average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. |
Leases | Leases where substantially all the risks and rewards of ownership of assets remain with the lessor are accounted for as operating leases. Annual rentals applicable to such operating leases are charged to expense on a straight-line basis over the lease terms except where an alternative basis is more representative of the pattern of benefits to be derived from the leased assets. Lease incentives received are recognized in the Consolidated Statements of Profit and Other Comprehensive Income as an integral part of the aggregate net lease payments made. Contingent rentals are charged to the Consolidated Statements of Profit and Other Comprehensive Income in the accounting period in which they are incurred. |
Changes in accounting policies | On January 1, 2018, the Group adopted International Financial Reporting Standard 9 Financial Instruments (“IFRS 9”) and International Financial Reporting Standard 15 Revenue from Contracts with Customers (“IFRS 15”) as issued by the International Accounting Standards Board (“IASB”) with a date of transition of January 1, 2018, which resulted in changes in accounting policies and adjustments to the amounts previously recognized in the financial statements. IFRS 9 replaces International Accounting Standard 39 Financial Instruments: Recognition and Measurement (“IAS 39”) and introduces new requirements for the classification and measurement of financial instruments, the recognition and measurement of credit impairment provisions; and provides for a simplified approach to hedge accounting. IFRS 15 specifies how and when the Company should recognize revenue as well as requiring such entities to provide users of financial statements with more informative, relevant disclosures. The standard provides a single, principles based five-step model to be applied to all contracts with customers. The Group did not early adopt any of IFRS 9 and IFRS 15 in previous period. As permitted by the transitional provisions of IFRS 9, the Group elected not to restate comparative figures on the basis that it is not possible to do so without the use of hindsight. Instead, the Group adjusted the retained earnings as of January 1, 2018 to reflect the impacts of adoption of IFRS 9. Instead, the Company adjusted the retained earnings as of January 1, 2018 to reflect the impacts of adoption of IFRS 9. Any adjustments to the carrying amounts of financial assets and liabilities at the date of transition were recognized in the opening retained earnings and other reserves of the current period. Consequently, for notes disclosures, the consequential amendments to International Financial Reporting Standard Financial Instruments: Disclosures (“IFRS 7”) have also only been applied to the current period. The comparative period notes disclosures repeat those disclosures made in the prior year. The adoption of IFRS 9 has resulted in changes in the Group accounting policies for recognition, classification and measurement of financial assets and financial liabilities and impairment of financial assets. IFRS 9 also significantly amends other standards dealing with financial instruments such as IFRS 7. Set out below are disclosures relating to the impact of the adoption of IFRS 9 on the Group. Further details of the specific IFRS 9 accounting policies applied in the current period (as well as the previous IAS 39) accounting policies applied in the comparative period) are described in more detail in section below. (a) Classification and measurement of financial instruments The measurement category and the carrying amount of financial assets and liabilities in accordance with IAS 39 and IFRS 9 at January 1, 2018 are compared as follows: IAS 39 IFRS 9 Measurement category Carrying amount Measurement category Carrying amount RMB’000 RMB’000 Cash and cash equivalents Amortised cost (loans and receivables) 21,717 Amortised cost 21,717 Interest receivables Amortised cost (loans and receivables) 39,628 Amortised cost 11,320 Loan receivables Amortised cost (loans and receivables) 791,390 Amortised cost 585,652 There were no changes to the classification and measurement of financial liabilities. The carrying amounts for all financial liabilities at January 1, 2018 have not been impacted by the initial application of IFRS 9. (b) Reconciliation of statement of financial position balances from IAS 39 to IFRS 9 The Group performed a detailed analysis of its business models for managing financial assets and analysis of their cash flow characteristics. The following table reconciles the carrying amounts of financial assets, from their previous measurement category in accordance with IAS 39 to their new measurement categories upon transition to IFRS 9 on January 1, 2018: IAS 39 carrying amount IFRS 9 carrying amount December 31, 2017 Reclassification Remeasurements January 1, 2018 RMB’000 RMB’000 RMB’000 RMB’000 Cash and cash equivalents 21,717 - - 21,717 Interest receivables 39,628 - (28,308 ) 11,320 Loan receivables 791,390 - (205,738 ) 585,652 852,735 - (234,046 ) 618,689 (c) Reconciliation of impairment allowance balance from IAS 39 to IFRS 9 The following table reconciles the prior period’s closing impairment allowance measured in accordance with the IAS 39 incurred loss model to the new impairment allowance measured in accordance with the IFRS 9 expected loss model at January 1, 2018: Loan loss allowance under IAS 39 Reclassification Remeasurements Loan loss allowance under IFRS 9 RMB’000 RMB’000 RMB’000 RMB’000 Cash and cash equivalents - - - - Interest receivables 508 - 1,944 2,452 Loan receivables 26,724 - 304,238 330,962 Total 27,232 - 306,182 333,414 |
Organization and principal ac_2
Organization and principal activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization And Principal Activities Tables Abstract | |
Details of subsidiaries and variable interest entity | Subsidiary Place of incorporation Particular of issued and fully paid up capital Group’s effective interest Held by the Company Held by a subsidiary Principal activities True Silver Limited British Virgin Islands US$50,000 100 % 100 % - Investment holding Chutian Financial Holdings (Hong Kong) Limited Hong Kong HK$10,000 100 % - 100 % Investment holding Wuhan Chutian Investment Holdings Co. Ltd PRC USD3,000,000 100 % - 100 % Investment holding Variable interest entity Hubei Chutian Microfinance Co., Ltd PRC RMB450,000,000 80 % - 80 % Microfinance lenders |
Schedule of accompanying consolidated financial | As of December 31, 2017 2018 RMB’000 RMB’000 Total current assets 853,185 599,931 Total non-current assets 15,266 50,833 Total assets 868,451 650,764 Total current liabilities 273,750 274,316 Total liabilities 273,750 274,316 For the year ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 Interest income on loans 104,896 119,639 141,857 Net profit 41,948 30,676 15,794 |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies Tables Abstract | |
Schedule of estimated useful life of property and equipment | Estimated useful life Property 20 years Leasehold improvement 5 years Vehicles 5 years Office equipment and furniture 3 years |
Schedule of classification and measurement of financial instruments | IAS 39 IFRS 9 Measurement category Carrying amount Measurement category Carrying amount RMB’000 RMB’000 Cash and cash equivalents Amortised cost (loans and receivables) 21,717 Amortised cost 21,717 Interest receivables Amortised cost (loans and receivables) 39,628 Amortised cost 11,320 Loan receivables Amortised cost (loans and receivables) 791,390 Amortised cost 585,652 |
Schedule of reconciliation of statement of financial position | IAS 39 carrying amount IFRS 9 carrying amount December 31, 2017 Reclassification Remeasurements January 1, 2018 RMB’000 RMB’000 RMB’000 RMB’000 Cash and cash equivalents 21,717 - - 21,717 Interest receivables 39,628 - (28,308 ) 11,320 Loan receivables 791,390 - (205,738 ) 585,652 852,735 - (234,046 ) 618,689 |
Schedule of reconciliation of impairment allowance | Loan loss allowance under IAS 39 Reclassification Remeasurements Loan loss allowance under IFRS 9 RMB’000 RMB’000 RMB’000 RMB’000 Cash and cash equivalents - - - - Interest receivables 508 - 1,944 2,452 Loan receivables 26,724 - 304,238 330,962 Total 27,232 - 306,182 333,414 |
Standards issued but not yet _2
Standards issued but not yet effective (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Standards Issued But Not Yet Effective Tables Abstract | |
Schedule of standards issued | Effective for accounting periods beginning on or after Interpretation 23 Uncertainty over Income Tax Treatments January 1, 2019 Annual Improvements to IFRS Standards 2015-2017 Cycle January 1, 2019 IFRS 16 Leases January 1, 2019 |
Credit risk (Tables)
Credit risk (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Credit Risk Tables Abstract | |
Schedule of gross carrying amounts of loans to customers | 2018 2017 ECL staging Stage 1 Stage 2 Stage 3 Total Total Lifetime ECL Lifetime ECL Lifetime ECL RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Loan receivables 24,100 101,150 698,520 823,770 818,114 Accrued interest - - 153,181 153,181 - Gross loan receivables 24,100 101,150 851,701 976,951 818,114 Loss allowance (3,919 ) (20,498 ) (372,880 ) (397,297 ) (26,724 ) Carrying amount 20,181 80,652 478,821 579,654 791,390 |
Market risk (Tables)
Market risk (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Market Risk Tables Abstract | |
Schedule of assets and liabilities subject to market risk | As of December 31, 2017 2018 RMB’000 RMB’000 Assets subject to market risk Loan receivables 791,390 579,654 Liabilities subject to market risk Loans payable 226,370 200,417 |
Fair value of financial asset_2
Fair value of financial assets and liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Of Financial Assets And Liabilities Tables Abstract | |
Schedule of fair value of financial assets and liabilities | As of December 31, 2018 Fair value Carrying amount RMB’000 RMB’000 Financial assets Cash and cash equivalents 3,188 3,188 Loan receivables 578,063 579,654 582,842 582,842 Financial liabilities Loans payable 203,837 200,417 As of December 31, 2017 Fair value Carrying Amount restated RMB’000 RMB’000 Financial assets Cash and cash equivalents 21,717 21,717 Loan receivables 826,036 791,390 847,753 813,107 Financial liabilities Loans payable 231,810 226,370 |
Income before taxes (Tables)
Income before taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Before Taxes Tables Abstract | |
Schedule of profit before taxation | Year Ended December 31, 2016 2017 2018 RMB’000 RMB’000 RMB’000 Depreciation 526 441 818 Directors salaries and related costs 312 234 1,815 social benefits contribution - - 130 share based compensation - - 589 Key management personnel (other than directors) salaries and related costs 364 1,160 3,501 social benefits contribution - 174 150 share based compensation - - 100 Other than directors and key management personnel salaries and related costs 7,119 6,198 1,863 social benefits contribution 409 398 452 |
Income tax expense (Tables)
Income tax expense (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Expense Tables Abstract | |
Schedule of Income tax expense | Year Ended December 31, 2016 2017 Restated 2018 RMB’000 RMB’000 RMB’000 Current income tax expenses 15,221 15,550 18,033 Deferred income tax expenses - - - Income tax expense 15,221 15,550 18,033 |
Schedule of reconciliation of income taxes | Year Ended December 31, 2016 2017 restated 2018 RMB’000 RMB’000 RMB’000 Income before taxation 57,169 44,376 26,188 Computed expected income tax expense 14,292 11,094 6,547 Tax effect of non-deductible expenses 929 592 17,173 Tax effect of tax-exempt entities - 3,864 1,884 Tax effect of non-taxable income - - (7,571 ) Income tax expense 15,221 15,550 18,033 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share Tables Abstract | |
Schedule of basic and diluted earnings per share | 2016 Restated RMB’000 2017 Restated RMB’000 2018 RMB’000 Net profit attributable to the equity holders of the Company – numerator for basic and diluted earnings per share 33,558 23,061 6,524 Number of shares in thousands Weighted average share outstanding – denominator for basic and diluted earnings per share 227,717 236,180 1,000,172 Basic and diluted earnings per share 0.15 0.10 0.01 |
Cash and cash equivalents (Tabl
Cash and cash equivalents (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash And Cash Equivalents Tables Abstract | |
Schedule of cash and cash equivalent | As at December 31, 2017 2018 RMB’000 RMB’000 Cash on hand 23 39 Cash at bank 21,694 3,149 Cash and cash equivalent per consolidated statements of cash flow 21,717 3,188 |
Interest receivables, net of _2
Interest receivables, net of credit impairment losses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Interest Receivables Net Of Credit Impairment Losses Tables Abstract | |
Schedule of interest receivables, net of credit impairment losses | As at December 31, 2017 2018 RMB’000 RMB’000 Interest receivables 40,136 8,839 Less: credit impairment losses (508 ) (1,782 ) Interest receivable, net of credit impairment losses 39,628 7,057 |
Schedule of changes in credit impairment losses | As at December 31, 2017 2018 RMB’000 RMB’000 Credit impairment losses as at January 1 1,919 508 Changes on initial application of IFRS 9 - 1,944 Reversal (1,411 ) (670 ) Credit impairment losses as at December 31 508 1,782 |
Loans receivables, net of credi
Loans receivables, net of credit impairment losses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivables Net Of Credit Impairment Losses | |
Schedule of loans receivables, net of credit impairment losses | As at December 31, 2017 2018 RMB’000 RMB’000 Loans receivable at amortized cost 818,114 823,770 Accrued interest - 153,181 Gross loans receivable 818,114 976,951 Less: Credit impairment losses (26,724 ) (397,297 ) Loans receivable, net of credit impairment losses 791,390 579,654 |
Schedule of changes in credit impairment losses | As at December 31, 2017 2018 RMB’000 RMB’000 Credit impairment losses as at January 1 21,733 26,724 Changes on initial application of IFRS 9 - 304,238 Charge to statement of profit 4,991 67,574 Write-off - (1,239 ) Credit impairment losses as at December 31 26,724 397,297 |
Prepaid expenses and others (Ta
Prepaid expenses and others (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepaid Expenses And Others Tables Abstract | |
Schedule of prepaid expenses and others | As at December 31, 2017 2018 RMB’000 RMB’000 Prepaid rental to a shareholder (1) 418 448 Receivable from a related party (2) - 251 Prepaid expenses 63 184 Others 2 155 Total 483 1,038 _____________ (1) See Note 29 of Notes to the Consolidated Financial Statements, section 1. Lease of office space from a shareholder for detailed disclosure. (2) See Note 29 of Notes to the Consolidated Financial Statements, section 2. Subleasing income with a related party for detailed disclosure. |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property And Equipment Tables Abstract | |
Schedule of Property and equipment | Property Motor vehicle Office equipment & furniture Leasehold improvements Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Cost At January 1, and December 31, 2017 - 995 408 1,158 2,561 Additions 47,908 - 631 2,765 51,304 At December 31, 2018 47,908 995 1,039 3,923 53,865 Accumulated depreciation At January 1, 2017 - 680 388 714 1,782 Addition - 209 - 232 441 At December 31, 2017 - 889 388 946 2,223 Depreciation 470 87 3 258 818 At December 31, 2018 470 976 391 1,204 3,041 Net book value At December 31, 2017 - 106 20 212 338 At December 31, 2018 47,438 19 648 2,719 50,824 |
Intangible asset (Tables)
Intangible asset (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Asset Tables Abstract | |
Schedule of intangible asset | Acquired computer software RMB’000 Cost At January 1, and December 31, 2017 - Additions 9 At December 31, 2018 9 Accumulated amortization At January 1, and December 31, 2017 and 2018 - Net book value At December 31, 2017 - At December 31, 2018 9 |
Loans payable (Tables)
Loans payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans Payable Tables Abstract | |
Schedule of loans payble | As at December 31, 2017 2018 RMB’000 RMB’000 Loans payable to third parties 216,370 110,917 Loans payable to related parties (1) - 79,500 Loan payable to a shareholder (2) 10,000 10,000 Total 226,370 200,417 |
Salary and benefit payable (Tab
Salary and benefit payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Salary And Benefit Payable Tables Abstract | |
Schedule of salary and benefit payable | As at December 31, 2017 2018 RMB’000 RMB’000 Salary and benefit payable to employees 2,907 895 Consulting expenses payable to a shareholder’s representatives (1) 516 516 Total 3,423 1,411 ____________ (1) See Note 29 of Notes to the Consolidated Financial Statements, Section 5. Consulting expenses for representatives from a shareholder for detailed disclosure. |
Interest payable (Tables)
Interest payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Interest Payable Tables Abstract | |
Schedule of interest payable | As at December 31, 2017 2018 RMB’000 RMB’000 Interest payable to third parties 3,796 3,234 Interest payable to related parties (1) - 1,662 Interest payable to a shareholder (2) 33 243 Total 3,829 5,139 ___________ (1) See Note 29 of Notes to the Consolidated Financial Statements, sub-sections 3.1 and 3.2 of Section 3. Loans payable to related parties for detailed disclosure. (2) See Note 29 of Notes to the Consolidated Financial Statements, sub-section 4.1 of Section 4. Loans payable to shareholders for detailed disclosure. |
Other payable (Tables)
Other payable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Payable Tables Abstract | |
Schedule of Other payable | As at December 31, 2017 restated 2018 RMB’000 RMB’000 Other payable to related parties (1) 15,682 27,804 Accrued expenses 7,032 5,734 Other taxes payable 4,002 1,722 Total 26,716 35,260 __________ (1) See Note 29 of Notes to the Consolidated Financial Statements, Section 6. Reverse merger expenses payable to a related party, Section 7. Advisory expenses with a related party, Section 8. Intermediary agreement with a related party and Section 9. Funds provided by related parties for payments to certain loans payable for detailed disclosure. |
Share capital and additional _2
Share capital and additional paid-in capital (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share Capital And Additional Paidin Capital Tables Abstract | |
Disclosure of Issued share capital and additional paid-in capital | Number of shares Ordinary shares Additional paid-in capital Total Non- controlling interest Total equity (thousands) RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 At January 1, 2017 227,717 77 395,924 396,001 99,000 495,001 Shares issued during the year 772,283 248 (222 ) 26 7 33 Share issuance expenses - - (12,528 ) (12,528 ) (3,132 ) (9,231 ) At December 31, 2017 1,000,000 325 383,174 383,499 95,875 479,374 Shares issued during the year 862 1 - 1 - 1 At December 31, 2018 1,000,862 326 383,174 383,500 95,875 479,375 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments Tables Abstract | |
Schedule of Lease commitment | As at December 31 2017 Restated 2018 RMB’000 RMB’000 Less than one year 584 584 Between one and five years 3,953 2,899 Total 4,537 3,483 |
Schedule of capital commitment | As at December 31 2017 2018 RMB’000 RMB’000 Property and equipment - 21 |
Correction of errors (Tables)
Correction of errors (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Correction Of Errors Tables Abstract | |
Schedule of financial statements | December 31, 2017 Statement of profit and other comprehensive income (extract) As previously reported Adjustments As currently reported RMB’000 RMB’000 RMB’000 Interest expense (note 30.1) (38,140 ) 4,349 (33,791 ) Total interest expense (38,814 ) 4,349 (34,465 ) General and administrative (note 30.2) (26,720 ) (8,175 ) (34,895 ) Total operating costs and expenses (29,858 ) (8,175 ) (38,033 ) Profit before income taxes (notes 30.1 and 30.2) 48,202 (3,826 ) 44,376 Income tax expense (notes 30.3 and 30.4) (14,636 ) (914 ) (15,550 ) Net profit 33,566 (4,740 ) 28,826 Basic and diluted earnings per share (note 30.5) 0.14 (0.04 ) 0.10 Balance sheet (extract) As of December 31, 2017 Restatement Adjustments As previously reported Adjustments Other impacts As currently reported RMB’000 RMB’000 RMB’000 RMB’000 Current assets Prepaid expenses and others (note 30.6) 15,411 - (14,928 ) 483 Total current assets 868,146 - (14,928 ) 853,218 Non-current assets Prepayment for a property (note 30.6) - - 14,928 14,928 Deferred tax asset (note 30.5) 645 (645 ) - - Total non-current assets 983 (645 ) 14,928 15,266 Total assets 869,129 (645 ) - 868,484 Current liabilities Income taxes payable (note 30.3) 14,851 269 - 15,120 Interest payable (note 30.1) 4,560 (731 ) - 3,829 Other payable (notes 30.1 and 30.2) 15,730 10,986 - 26,716 Total current liabilities 265,076 10,524 - 275,600 Shareholders’ equity Additional paid-in capital (note 30.2) 388,317 (5,143 ) - 383,174 Statutory reserve (note 30.7) 7,751 - 5,614 13,365 General risk reserve (note 30.7) 5,891 - 3,926 9,817 Retained earnings 80,958 (3,792 ) (9,540 ) 67,626 Non-controlling interests in equity 120,811 (2,234 ) - 118,577 Total shareholders’ equity 604,053 (11,169 ) - 592,884 Total equity and liabilities 869,129 (645 ) - 868,484 December 31, 2017 Cash flow Statement (extract) As previously reported Adjustments Other impacts As currently reported RMB’000 RMB’000 RMB’000 RMB’000 Cash flow from operating activities Profit before income taxes (notes 30.1 and 30.2) 48,202 (3,826 ) - 44,376 Credit impairment losses 6,402 - (2,822 ) 3,580 Operating profit before changes in working capital 55,045 (3,826 ) (2,822 ) 48,397 Interest receivables (22,309 ) - 2,822 (19,487 ) Loans receivable (note 30.8) - - (121,040 ) (121,040 ) Interest payable (note 30.1) 1,333 (731 ) - 602 Other payable (notes 30.1 and 30.2) 13,046 10,986 - 24,032 Net cash generated/(used) by operating activities 58,585 6,429 (121,040 ) (56,026 ) Net cash generated/(used) by operating activities 44,192 6,429 (121,040 ) (70,419 ) Cash flow from investing activities Originated loan disbursements (note 30.8) (397,190 ) - 397,190 - Repayments of loans from customers (note 30.8) 276,150 - (276,150 ) - Net cash used in investing activities (135,968 ) - 121,040 (14,928 ) Cash flow from financing activities Share issuance expenses (note 30.2) (9,198 ) (6,429 ) - (15,627 ) Proceeds received from shareholders’ loans (note 30.9) 14,000 - 38,600 52,600 Repayment of shareholders’ loans (note 30.9) (4,000 ) - (38,600 ) (42,600 ) Proceeds received from loans payable (note 30.9) 402,300 - (38,600 ) 363,700 Repayment of loans payable (note 30.9) (386,400 ) - 38,600 (347,800 ) Net cash generated by financing activities 16,702 (6,429 ) - 10,273 December 31, 2016 Cash flow Statement (extract) As previously reported Other impacts As currently reported RMB’000 RMB’000 RMB’000 Cash flow from operating activities Loans receivable (note 30.8) - (213,138 ) (213,138 ) Net cash generated/(used) by operating activities 38,167 (213,138 ) (174,971 ) Net cash generated/(used) by operating activities 16,708 (213,138 ) (196,430 ) Cash flow from investing activities Originated loan disbursements (note 30.8) (446,264 ) 446,264 - Repayments of loans from customers (note 30.8) 233,126 (233,126 ) - Net cash used in investing activities (213,138 ) 213,138 - Cash flow from financing activities Proceeds received from shareholders’ loans (note 30.10) 2,000 48,000 50,000 Repayments of shareholders’ loans (note 30.10) (2,000 ) (58,000 ) (60,000 ) Proceeds received from loans payable (note 30.10) 384,240 (48,000 ) 336,240 Repayments of loans payable (note 30.10) (332,990 ) 58,000 (274,990 ) |
Organization and principal ac_3
Organization and principal activities (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 28, 2017 | |
Disclosure of transactions between related parties [line items] | |||
Place of incorporation | Cayman Islands | ||
Particular of issued and fully paid up capital | ¥ 326 | ¥ 325 | |
Wuhan Chutian Investment Holdings Co. Ltd [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Place of incorporation | PRC | ||
Particular of issued and fully paid up capital | ¥ 3,000,000 | ||
Group's effective interest | 100.00% | ||
Held by a subsidiary | 100.00% | ||
Principal activities | Investment holding | ||
Chutian Financial Holdings (Hong Kong) Limited [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Place of incorporation | Hong Kong | ||
Particular of issued and fully paid up capital | ¥ 10,000 | ||
Group's effective interest | 100.00% | ||
Held by a subsidiary | 100.00% | ||
Principal activities | Investment holding | ||
True Silver Limited [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Place of incorporation | British Virgin Islands | ||
Particular of issued and fully paid up capital | ¥ 50,000 | ||
Group's effective interest | 100.00% | ||
Held by the Company | 100.00% | ||
Principal activities | Investment holding | ||
Hubei Chutian Microfinance Co., Ltd [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Place of incorporation | PRC | ||
Particular of issued and fully paid up capital | ¥ 450,000,000 | ¥ 450,000,000 | |
Group's effective interest | 80.00% | ||
Held by a subsidiary | 80.00% | ||
Principal activities | Microfinance lenders |
Organization and principal ac_4
Organization and principal activities (Details 1) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about business combination [line items] | ||
Total current assets | ¥ 590,937 | ¥ 853,218 |
Total non-current assets | 50,833 | 15,266 |
Total assets | 641,770 | 868,484 |
Total current liabilities | 274,704 | 275,600 |
VIEs [Member] | ||
Disclosure of detailed information about business combination [line items] | ||
Total current assets | 599,931 | 853,185 |
Total non-current assets | 50,833 | 15,266 |
Total assets | 650,764 | 868,451 |
Total current liabilities | 274,316 | 273,750 |
Total liabilities | ¥ 274,316 | ¥ 273,750 |
Organization and principal ac_5
Organization and principal activities (Details 2) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about business combination [line items] | |||
Interest income on loans | ¥ 141,857 | ¥ 119,639 | ¥ 104,896 |
Net profit | 8,155 | 28,826 | 41,948 |
VIEs [Member] | |||
Disclosure of detailed information about business combination [line items] | |||
Interest income on loans | 141,857 | 119,639 | 104,896 |
Net profit | ¥ 15,794 | ¥ 30,676 | ¥ 41,948 |
Organization and principal ac_6
Organization and principal activities (Details Narrative) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2010 | |
Earnings per share [line items] | |||||
Country of incorporation | Cayman Islands | ||||
Date of incorporation | Jun. 24, 2010 | ||||
Share price | ¥ 0.00005 | ||||
Registered capital | ¥ 326 | ¥ 325 | |||
Voting interest | 80.00% | ||||
VIEs [Member] | |||||
Earnings per share [line items] | |||||
Interest income on loan rate | 100.00% | 100.00% | 100.00% | ||
Total assets percentage | 101.40% | 100.00% | |||
Total liabilities percentage | 99.90% | 99.30% | |||
Hubei Chutian Microfinance Co., Ltd [Member] | |||||
Earnings per share [line items] | |||||
Country of incorporation | PRC | ||||
Variable interest entity, ownership percentage hold by True Silver | 80.00% | ||||
Registered capital | ¥ 450,000,000 | ¥ 450,000,000 | |||
Ownership interest held by the former shareholders | 88.70% | ||||
Chutian Financial Holdings (Hong Kong) Limited [Member] | |||||
Earnings per share [line items] | |||||
Country of incorporation | Hong Kong | ||||
Date of incorporation | Aug. 12, 2016 | ||||
Registered capital | ¥ 10,000 | ||||
Paid-up share capital | ¥ 10,000 | ||||
Ordinary shares capital | 100 | ||||
True Silver Limited [Member] | |||||
Earnings per share [line items] | |||||
Country of incorporation | British Virgin Islands | ||||
Date of incorporation | Jun. 28, 2016 | ||||
Business acquisition consideration paid in cash | ¥ 228,000,000 | ||||
Registered capital | ¥ 50,000 | ||||
Paid-up share capital | ¥ 50,000 | ||||
Ordinary shares capital | 50,000 | ||||
True Silver Limited [Member] | Ordinary Shares [Member] | |||||
Earnings per share [line items] | |||||
Business acquisition consideration paid, shares issued | 772,283,308 | ||||
Share price | ¥ 1 | ||||
Xiniya Holdings Limited [Member] | |||||
Earnings per share [line items] | |||||
Divestiture of business, consideration receivable in cash | ¥ 228,000,000 | ||||
Share Pledge Agreement [Member] | |||||
Earnings per share [line items] | |||||
Shareholders holding description | Shareholders holding 80% Equity Interests of Chutian pledged all of their equity interests in Chutian to Chutian Holding to guarantee the performance of Chutians obligations under the Exclusive Consigned Management Agreement, Shareholders Voting Proxy Agreement and Exclusive Purchase Option Agreement (the Main Agreements). | ||||
Shareholders Voting Proxy Agreement [Member] | |||||
Earnings per share [line items] | |||||
Shareholders holding description | Chutian as the voting proxy of the Shareholders holding 80% Equity Interests of Chutian; | ||||
Exclusive Purchase Option Agreement [Member] | |||||
Earnings per share [line items] | |||||
Shareholders holding description | Shareholders holding 80% Equity Interests of Chutian | ||||
Management Service Agreement [Member] | Chutian and Chutian Holding [Member] | |||||
Earnings per share [line items] | |||||
Exclusive Consigned Management Service Agreement | Chutian Holding is entitled to collect a service fee equal to 80% of the net operating income of Chutian (the Service Fees). The Service Fees are due and payable on a quarterly basis; provided, however, in principle, the payment of the Service Fees should not cause any difficulty to the operation of either party to this Agreement. The exclusive Consigned Management Service Agreement has a term of five (5) years. Chutian is not entitled to unilaterally terminate this Agreement.Chutian Holding has the right to terminate this Agreement by giving a thirty (30) day prior notice to Chutian. | ||||
VIE Agreements [Member] | Hubei Chutian Microfinance Co., Ltd [Member] | |||||
Earnings per share [line items] | |||||
Contractual agreements description | Chutian Holding is deemed to control 80% of Chutian and have rights to consolidate 80% of Chutians financial results. |
Summary of significant accoun_4
Summary of significant accounting policies (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Property [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Property and equipment estimated useful life | 20 years |
Leasehold improvements [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Property and equipment estimated useful life | 5 years |
Vehicles [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Property and equipment estimated useful life | 5 years |
Office equipment and furniture [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Property and equipment estimated useful life | 3 years |
Summary of significant accoun_5
Summary of significant accounting policies (Details 1) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | ¥ 3,188 | ¥ 21,717 | ¥ 96,791 | ¥ 65,741 |
Loan receivables | 579,654 | ¥ 791,390 | ||
IAS 39 [Member] | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | 21,717 | |||
Interest receivables | 39,628 | |||
Loan receivables | 791,390 | |||
IAS 9 [Member] | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | 21,717 | |||
Interest receivables | 11,320 | |||
Loan receivables | ¥ 585,652 |
Summary of significant accoun_6
Summary of significant accounting policies (Details 2) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | ¥ 3,188 | ¥ 21,717 | ¥ 96,791 | ¥ 65,741 |
Loan receivables | 579,654 | ¥ 791,390 | ||
IAS 39 [Member] | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | 21,717 | |||
Interest receivables | 39,628 | |||
Loan receivables | 791,390 | |||
Total carrying amounts of financial assets | 852,735 | |||
Reclassification [Member] | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | ||||
Interest receivables | ||||
Loan receivables | ||||
Total carrying amounts of financial assets | ||||
Remeasurements [Member] | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | ||||
Interest receivables | (28,308) | |||
Loan receivables | (205,738) | |||
Total carrying amounts of financial assets | (234,046) | |||
IAS 9 [Member] | ||||
Disclosure of detailed information about property, plant and equipment [line items] | ||||
Cash and cash equivalents | 21,717 | |||
Interest receivables | 11,320 | |||
Loan receivables | 585,652 | |||
Total carrying amounts of financial assets | ¥ 618,689 |
Summary of significant accoun_7
Summary of significant accounting policies (Details 3) ¥ in Thousands | Dec. 31, 2018CNY (¥) |
Loan loss allowance under IAS 39 [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Cash and cash equivalents | |
Interest receivables | 508 |
Loan receivables | 26,724 |
Total impairment allowance | 27,232 |
Reclassification [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Cash and cash equivalents | |
Interest receivables | |
Loan receivables | |
Total impairment allowance | |
Remeasurements [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Cash and cash equivalents | |
Interest receivables | 1,944 |
Loan receivables | 304,238 |
Total impairment allowance | 306,182 |
Loan loss allowance under IAS 9 [Member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Cash and cash equivalents | |
Interest receivables | 2,452 |
Loan receivables | 330,962 |
Total impairment allowance | ¥ 333,414 |
Summary of significant accoun_8
Summary of significant accounting policies (Details Narrative) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2010 | Jun. 30, 2010 | |
Earnings per share [line items] | ||||
Shares Issued | 862,148 | 20,000 | ||
Interest and fee income | 9.70% | 9.60% | ||
Net cash decreased | ¥ 17,900 | ¥ 75,100 | ||
Cash | ¥ 3,200,000 | |||
Ownership percentage description | The Company has also acquired the financial support letter from Hubei New Nature Investment Co., Ltd, a company that is 80.8% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei, and from Dunxin Holdings Co., Ltd, a company that is 70% owned by the Chairman and the Chief Executive Officer, Mr Ricky Qizhi Wei and is 30% owned by Chief Personal/Human Resource Officer, Ms. Wenting Xiao | |||
PRC [Member] | ||||
Earnings per share [line items] | ||||
Interest and fee income | 6.00% | |||
Ordinary Shares [Member] | Top of Range [Member] | ||||
Earnings per share [line items] | ||||
Shares Issued | 23,200,000 |
Standards issued but not yet _3
Standards issued but not yet effective (Details Narrative) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2018CNY (¥) | |
Statement Line Items [Line Items] | |
Non-cancellable operating lease commitments | ¥ 3,500 |
Long term lease | 3,300 |
Short trem term lease | 8 |
Right-of-use asset | 3,300 |
Lease liability | 3,300 |
Decrease lease expenses | 3,500 |
Increase depreciation of right-of-use asset | 3,300 |
Increase interest expense | 200 |
2019 [Member] | |
Statement Line Items [Line Items] | |
Decrease lease expenses | 1,004 |
Increase depreciation of right-of-use asset | 924 |
Increase interest expense | ¥ 80 |
Credit risk (Details)
Credit risk (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||
Loan receivables | ¥ 823,770 | ¥ 818,114 |
Accrued interest | 153,181 | |
Gross loan receivables | 976,951 | 818,114 |
Loss allowance | (397,297) | (26,724) |
Carrying amount | 579,654 | ¥ 791,390 |
Stage 1 [Member] | ||
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||
Loan receivables | 24,100 | |
Accrued interest | ||
Gross loan receivables | 24,100 | |
Loss allowance | (3,919) | |
Carrying amount | 20,181 | |
Stage 2 [Member] | ||
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||
Loan receivables | 101,150 | |
Accrued interest | ||
Gross loan receivables | 101,150 | |
Loss allowance | (20,498) | |
Carrying amount | 80,652 | |
Stage 3 [Member] | ||
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||
Loan receivables | 698,520 | |
Accrued interest | 153,181 | |
Gross loan receivables | 851,701 | |
Loss allowance | (372,880) | |
Carrying amount | ¥ 478,821 |
Market risk (Details)
Market risk (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Market Risk Details Abstract | ||
Loan receivables | ¥ 579,654 | ¥ 791,390 |
Loan payable | ¥ 226,370 | ¥ 200,470 |
Capital risk (Details Narrative
Capital risk (Details Narrative) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2018CNY (¥) | |
Disclosure of transactions between related parties [line items] | |
Capital of variable interest entity | ¥ 450,000 |
Hubei Province [Member] | |
Disclosure of transactions between related parties [line items] | |
Capital requirement, description | the capital requirement for the microfinance industry is that the registered capital shall not be less than RMB50 million. |
Fair value of financial asset_3
Fair value of financial assets and liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financial assets | ||||
Cash and cash equivalents | ¥ 3,188 | ¥ 21,717 | ¥ 96,791 | ¥ 65,741 |
Loan receivables | 579,654 | 791,390 | ||
Financial liabilities | ||||
Loans payable | 226,370 | 200,470 | ||
Carrying amount [Member] | ||||
Financial assets | ||||
Cash and cash equivalents | 3,188 | 21,717 | ||
Loan receivables | 579,654 | 791,390 | ||
Total Financial Assets | 582,842 | 813,107 | ||
Financial liabilities | ||||
Loans payable | 200,417 | 226,370 | ||
Fair value [Member] | ||||
Financial assets | ||||
Cash and cash equivalents | 3,188 | 21,717 | ||
Loan receivables | 578,063 | 826,036 | ||
Total Financial Assets | 582,842 | 847,753 | ||
Financial liabilities | ||||
Loans payable | ¥ 203,837 | ¥ 231,810 |
Income before taxes (Details)
Income before taxes (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Before Taxes Details Abstract | |||
Depreciation | ¥ 818 | ¥ 441 | ¥ 526 |
Directors | |||
salaries and related costs | 1,815 | 234 | 312 |
social benefits contribution | 130 | ||
share based compensation | 589 | ||
Key management personnel (other than directors) | |||
salaries and related costs | 3,501 | 1,160 | 364 |
social benefits contribution | 150 | 174 | |
share based compensation | 100 | ||
Other than directors and key management personnel | |||
salaries and related costs | 1,863 | 6,198 | 7,119 |
social benefits contribution | ¥ 452 | ¥ 398 | ¥ 409 |
Income tax expense (Details)
Income tax expense (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Expense Details Abstract | |||
Current tax on profit for the year | ¥ 18,033 | ¥ 15,550 | ¥ 15,221 |
Deferred income tax expenses | |||
Income tax expense | ¥ 18,033 | ¥ 15,550 | ¥ 15,221 |
Income tax expense (Details 1)
Income tax expense (Details 1) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Expense Details 1Abstract | |||
Income before taxation | ¥ 26,188 | ¥ 44,376 | ¥ 57,169 |
Computed expected income tax expense | 6,547 | 11,094 | 14,292 |
Tax effect of non-deductible expenses | 17,173 | 592 | 929 |
Tax effect of tax-exempt entities | 1,884 | 3,864 | |
Tax effect of non-taxable income | (7,571) | ||
Income tax expense | ¥ 18,033 | ¥ 15,550 | ¥ 15,221 |
Income tax expense (Details Nar
Income tax expense (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Expense Details Narrative Abstract | |
Reconciliation tax rates | 25.00% |
Earnings per share (Details)
Earnings per share (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands, shares in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share Details Narrative Abstract | |||
Net profit attributable to the equity holders of the Company – numerator for basic and diluted earnings per share | ¥ 6,524 | ¥ 23,061 | ¥ 33,558 |
Weighted average share outstanding – denominator for basic and diluted earnings per share | 1,000,172 | 236,180 | 227,717 |
Basic and diluted earnings per share | ¥ 0.01 | ¥ 0.10 | ¥ 0.15 |
Earnings per share (Details Nar
Earnings per share (Details Narrative) - ¥ / shares | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 28, 2017 | Dec. 18, 2014 | Dec. 17, 2014 | |
Earnings Per Share Details Narrative Abstract | ||||||
Weighted average number of shares outstanding in the year | 1,000,171,839 | 236,180,071 | 227,716,692 | |||
Common stock, ordinary shares | 48 | 16 | 4 | |||
Common stock, par value | ¥ 0.00005 |
Cash and cash equivalents (Deta
Cash and cash equivalents (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash And Cash Equivalents Details Narrative Abstract | ||||
Cash on hand | ¥ 39 | ¥ 23 | ||
Cash at bank | 3,149 | 21,694 | ||
Cash and cash equivalent per consolidated statements of cash flow | ¥ 3,188 | ¥ 21,717 | ¥ 96,791 | ¥ 65,741 |
Interest and fee receivables, n
Interest and fee receivables, net of allowance (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Interest And Fee Receivables Net Of Allowance | ||
Interest and fee receivables | ¥ 8,839 | ¥ 40,136 |
Less: impairment loss allowance | (1,782) | (508) |
Interest receivable, net of credit impairment losses | ¥ 7,057 | ¥ 39,628 |
Interest and fee receivables,_2
Interest and fee receivables, net of allowance (Details 1) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interest And Fee Receivables Net Of Allowance | ||
Credit impairment losses as at January 1 | ¥ 508 | ¥ 1,919 |
Changes on initial application of IFRS 9 | 1,944 | |
Reversal | (670) | (1,411) |
Credit impairment losses as at December 31 | ¥ 1,782 | ¥ 508 |
Loan receivables (Details)
Loan receivables (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Loan Receivables | ||
Loans receivable at amortized cost | ¥ 823,770 | ¥ 818,114 |
Accrued interest | 153,181 | |
Gross loans receivable | 976,951 | 818,114 |
Less: Credit impairment losses | (397,297) | (26,724) |
Loan receivables, net of allowance | ¥ 579,654 | ¥ 791,390 |
Loan receivables (Details 1)
Loan receivables (Details 1) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loan Receivables Details 1Abstract | ||
Credit impairment losses as at January 1 | ¥ 26,724 | ¥ 21,733 |
Changes on initial application of IFRS 9 | 304,238 | |
Charge to statement of profit | 67,574 | 4,991 |
Write-off | (1,239) | |
Credit impairment losses as at December 31 | ¥ 397,297 | ¥ 26,724 |
Prepaid expenses and others (De
Prepaid expenses and others (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Prepaid Expenses And Others Details Abstract | |||
Prepaid rental to a shareholder(1) | [1] | ¥ 448 | ¥ 418 |
Receivable from a related party(2) | [2] | 251 | |
Prepaid expenses | 184 | 63 | |
Others | 155 | 2 | |
Total | ¥ 1,038 | ¥ 483 | |
[1] | (1) See Note 29 of Notes to the Consolidated Financial Statements, section 1. Lease of office space from a shareholder for detailed disclosure. | ||
[2] | (2) See Note 29 of Notes to the Consolidated Financial Statements, section 2. Subleasing income with a related party for detailed disclosure |
Property and equipment (Details
Property and equipment (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | ¥ 2,561 | |
Additions | 51,304 | |
Accumulated depreciation | ||
Beginning balance | ¥ 2,223 | 1,782 |
Addition | 441 | |
Depreciation | 818 | |
Property and equipment, Net | 50,824 | 338 |
Property [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | ||
Additions | 47,908 | |
Accumulated depreciation | ||
Beginning balance | ||
Addition | ||
Depreciation | 470 | |
Property and equipment, Net | 47,438 | |
Motor vehicles [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 995 | |
Additions | ||
Accumulated depreciation | ||
Beginning balance | 889 | 680 |
Addition | 209 | |
Depreciation | 87 | |
Property and equipment, Net | 19 | 106 |
Office equipment & furniture [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 408 | |
Additions | 631 | |
Accumulated depreciation | ||
Beginning balance | 388 | 388 |
Addition | ||
Depreciation | 3 | |
Property and equipment, Net | 648 | 20 |
Leasehold improvements [Member] | ||
Disclosure of detailed information about property, plant and equipment [line items] | ||
Beginning balance | 1,158 | |
Additions | 2,765 | |
Accumulated depreciation | ||
Beginning balance | 946 | 714 |
Addition | 232 | |
Depreciation | 258 | |
Property and equipment, Net | ¥ 2,719 | ¥ 212 |
Property and equipment (Detai_2
Property and equipment (Details Narrative) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2018CNY (¥) | |
Property And Equipment Details Abstract | |
Office space property | ¥ 29,800 |
Foreclosure amount of loan | ¥ 18,000 |
Prepayment for a property (Deta
Prepayment for a property (Details Narrative) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Mar. 31, 2018 | |
Prepayment For Property | ||
Payment for property | ¥ 14,900 | |
Property capitalized amount | ¥ 29,800 | |
Outstanding amount of property | ¥ 14,900 |
Intangible asset (Details)
Intangible asset (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2018CNY (¥) | |
Intangible Asset | |
At January 1, and December 31, 2017 | |
Additions | 9 |
At December 31, 2018 | 9 |
Accumulated amortization | |
At January 1, and December 31, 2017 and 2018 | |
At December 31, 2017 | |
At December 31, 2018 | ¥ 9 |
Loans payable (Details)
Loans payable (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of transactions between related parties [line items] | |||
Loans payable | ¥ 200,417 | ¥ 226,370 | |
Third parties [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Loans payable | 110,917 | 216,370 | |
Related parties [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Loans payable | [1] | 79,500 | |
Shareholders [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Loans payable | [2] | ¥ 10,000 | ¥ 10,000 |
[1] | See Note 29 of Notes to the Consolidated Financial Statements, sub-sections 3.1 and 3.2 of Section 3. Loans payable to related parties for detailed disclosure. | ||
[2] | See Note 29 of Notes to the Consolidated Financial Statements, sub-section 4.1 of Section 4. Loans payable to shareholders for detailed disclosure. |
Loans payable (Details Narrativ
Loans payable (Details Narrative) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of non-adjusting events after reporting period [line items] | |||
Average annual interest rates | 9.70% | 9.60% | |
Loans payable | ¥ 226,370 | ¥ 200,470 | |
Outstanding loans payable | ¥ 25,800 | ||
Top of Range [Member] | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Due date | Sep. 30, 2018 | ||
Bottom of range [member] | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Due date | Jan. 31, 2019 | ||
Financing Agreements [Member] | Nanjing Securities Exchange [Member] | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Loans payable | ¥ 32,900 | ||
Subsequenty Event [Member] | |||
Disclosure of non-adjusting events after reporting period [line items] | |||
Repayments of outstanding loans | ¥ 15,900 |
Salary and benefit payable (Det
Salary and benefit payable (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Salary And Benefit Payable Details Narrative Abstract | |||
Salary and benefit payable to employees | ¥ 2,907 | ¥ 895 | |
Consulting expenses payable to a shareholder’s representatives(1) | [1] | 516 | 516 |
Total | ¥ 3,423 | ¥ 1,411 | |
[1] | See Note 29 of Notes to the Consolidated Financial Statements, Section 5. Consulting expenses for representatives from a shareholder for detailed disclosure. |
Interest payable (Details)
Interest payable (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of transactions between related parties [line items] | |||
Interest payable | ¥ 3,829 | ¥ 5,139 | |
Third parties [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Interest payable | 3,796 | 3,234 | |
Related parties [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Interest payable | [1] | 1,662 | |
Shareholders [Member] | |||
Disclosure of transactions between related parties [line items] | |||
Interest payable | [2] | ¥ 33 | ¥ 243 |
[1] | See Note 29 of Notes to the Consolidated Financial Statements, sub-sections 3.1 and 3.2 of Section 3. Loans payable to related parties for detailed disclosure. | ||
[2] | See Note 29 of Notes to the Consolidated Financial Statements, sub-section 4.1 of Section 4. Loans payable to shareholders for detailed disclosure. |
Other payable (Details)
Other payable (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Payable Details Abstract | |||
Other payable to related parties | [1] | ¥ 27,804 | ¥ 15,682 |
Accrued expenses | 5,734 | 7,032 | |
Other taxes payable | 1,722 | 4,002 | |
Total | ¥ 35,260 | ¥ 26,716 | |
[1] | See Note 29 of Notes to the Consolidated Financial Statements, Section 6. Reverse merger expenses payable to a related party, Section 7. Advisory expenses with a related party, Section 8. Intermediary agreement with a related party and Section 9. Funds provided by related parties for payments to certain loans payable for detailed disclosure. |
Share capital and additional _3
Share capital and additional paid-in capital (Details) - CNY (¥) ¥ in Thousands, shares in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of classes of share capital [line items] | ||
Beginning balance, amount | ¥ 396,001 | |
Shares issued during the year, Amount | ¥ 1 | 26 |
Share issuance expenses | (12,528) | |
Ending balance, amount | ¥ 383,500 | ¥ 383,499 |
Number of shares [Member] | ||
Disclosure of classes of share capital [line items] | ||
Beginning balance, shares | 227,717 | |
Shares issued during the year, Shares | 862 | |
Shares issued during the year, Amount | ||
Ending balance, shares | 1,000,862 | 1,000,000 |
Ordinary shares [Member] | ||
Disclosure of classes of share capital [line items] | ||
Beginning balance, amount | ¥ 77 | |
Shares issued during the year, Amount | ¥ 1 | |
Ending balance, amount | 326 | 325 |
Additional paid-in capital | ||
Disclosure of classes of share capital [line items] | ||
Beginning balance, amount | 395,924 | |
Shares issued during the year, Amount | (222) | |
Share issuance expenses | (12,528) | |
Ending balance, amount | 383,174 | 388,317 |
Non-controlling interests [Member] | ||
Disclosure of classes of share capital [line items] | ||
Beginning balance, amount | 99,000 | |
Shares issued during the year, Amount | 7 | |
Share issuance expenses | (3,132) | |
Ending balance, amount | 95,875 | 95,875 |
Total Equity [member] | ||
Disclosure of classes of share capital [line items] | ||
Beginning balance, amount | 495,001 | |
Shares issued during the year, Amount | 1 | 33 |
Share issuance expenses | (9,231) | |
Ending balance, amount | ¥ 479,375 | ¥ 479,374 |
Share capital and additional _4
Share capital and additional paid-in capital (Details Narrative) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2010 |
Disclosure of classes of share capital [line items] | |||
Common stock, shares authorized | 1,000,000,000 | ||
Common stock, par value | ¥ 0.00005 | ||
Common stock, shares issued | 862,148 | 20,000 | |
Ordinary shares [Member] | March 1, 2018 [Member] | |||
Disclosure of classes of share capital [line items] | |||
Common stock, shares authorized | 2,000,000,000 | ||
Common stock, par value | ¥ 0.00005 | ||
Common stock, shares issued | 1,000,000,000 | ||
Common stock, value | ¥ 50 | ||
Additional number of shares | 0 |
Statutory reserve (Details Narr
Statutory reserve (Details Narrative) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of reserves within equity [line items] | ||
Statutory reserves | ¥ 14,017 | ¥ 13,365 |
PRC [Member] | ||
Disclosure of reserves within equity [line items] | ||
Profits after taxation, percentage | 10.00% | |
Statutory reserves | ¥ 17,500 | ¥ 16,700 |
Variable interest entity | 50.00% |
General risk reserve (Details N
General risk reserve (Details Narrative) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of reserves within equity [line items] | ||
General risk reserve description | In accordance with the relevant laws and regulations of the PRC, the Group’s variable interest entity is required to maintain a general risk reserve within the equity, through appropriation of profit, which should not be less than 1.5% of the year end balance of its risk assets over the course of five years. | |
General risk statutory reserve | ¥ 9,885 | ¥ 9,817 |
PRC [Member] | ||
Disclosure of reserves within equity [line items] | ||
General risk statutory reserve | ¥ 12,400 | ¥ 12,300 |
Commitments (Details)
Commitments (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||
Total minimum operating lease payments | ¥ 3,483 | ¥ 4,537 |
Less than one year [Member] | ||
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||
Total minimum operating lease payments | 584 | 584 |
Between one and five years [Member] | ||
Disclosure of amounts to be recovered or settled after twelve months for classes of assets and liabilities that contain amounts to be recovered or settled both no more and more than twelve months after reporting date [line items] | ||
Total minimum operating lease payments | ¥ 2,899 | ¥ 3,953 |
Commitments (Details 1)
Commitments (Details 1) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments Details 1Abstract | ||
Property and equipment | ¥ 21 |
Commitments (Details Narrative)
Commitments (Details Narrative) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2012 | Dec. 31, 2018CNY (¥)Integer | Dec. 31, 2017CNY (¥) | Dec. 31, 2016 | |
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | ¥ 3,483 | ¥ 4,537 | ||
Lease commitment [Member] | First Five Years [Member] | 2013 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,000 | |||
Lease commitment [Member] | First Five Years [Member] | 2014 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,000 | |||
Lease commitment [Member] | First Five Years [Member] | 2015 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,000 | |||
Lease commitment [Member] | First Five Years [Member] | 2016 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,000 | |||
Lease commitment [Member] | First Five Years [Member] | 2017 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,000 | |||
Lease commitment [Member] | Last Five Years [Member] | 2018 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,100 | |||
Lease commitment [Member] | Last Five Years [Member] | 2019 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,100 | |||
Lease commitment [Member] | Last Five Years [Member] | 2020 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,100 | |||
Lease commitment [Member] | Last Five Years [Member] | 2021 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | 1,100 | |||
Lease commitment [Member] | Last Five Years [Member] | 2022 | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease amount | ¥ 1,100 | |||
Hubei Daily Media Group [Member] | ||||
Disclosure of transactions between related parties [line items] | ||||
Variable interest entity | 20.00% | 20.00% | 20.00% | |
Hubei Daily Media Group [Member] | Lease commitment [Member] | ||||
Disclosure of transactions between related parties [line items] | ||||
Operating lease agreement period | 10 years | |||
Variable interest entity | 20.00% | |||
Office space, meters | Integer | 1,673 | |||
Wuhan City [Member] | Capital Commitment [Member] | ||||
Disclosure of transactions between related parties [line items] | ||||
Office space, meters | Integer | 1,492 |
Related party transactions (Det
Related party transactions (Details Narrative) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2017CNY (¥) | Jul. 31, 2016CNY (¥) | Apr. 30, 2016CNY (¥) | Sep. 30, 2012 | Dec. 31, 2018CNY (¥)Integer | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Sep. 30, 2019 | |
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | ¥ 3,483 | ¥ 4,537 | ||||||
Borrowed amount | ¥ 10,000 | ¥ 10,000 | ||||||
Borrowings Interest rate | 9.70% | 9.60% | ||||||
Repayments of loan payable | ¥ 414,924 | ¥ 347,800 | ¥ 274,990 | |||||
Loan receivables | 579,654 | 791,390 | ||||||
Interest expenses | (26,451) | (33,791) | ¥ (22,151) | |||||
Related party receivables | 300 | ¥ 0 | ||||||
Interest payable to related parties | 1,403 | |||||||
Loan Extension Agreement [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Borrowed amount | ¥ 10,000 | |||||||
Borrowings Interest rate | 15.00% | |||||||
Penalty interest rate | 9.00% | |||||||
Loan Extension Agreement [Member] | Subsequenty Event [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Borrowings Interest rate | 15.00% | |||||||
Penalty interest rate | 9.00% | |||||||
2013 | Lease commitment [Member] | First Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,000 | |||||||
2014 | Lease commitment [Member] | First Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,000 | |||||||
2015 | Lease commitment [Member] | First Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,000 | |||||||
2016 | Lease commitment [Member] | First Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,000 | |||||||
2017 | Lease commitment [Member] | First Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,000 | |||||||
2018 | Lease commitment [Member] | Last Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,100 | |||||||
2019 | Lease commitment [Member] | Last Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,100 | |||||||
2020 | Lease commitment [Member] | Last Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,100 | |||||||
2021 | Lease commitment [Member] | Last Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | 1,100 | |||||||
2022 | Lease commitment [Member] | Last Five Years [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease amount | ¥ 1,100 | |||||||
Chief Executive Officer [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Number of days for borrowing period | 97 days | |||||||
Ownership interest | 80.80% | |||||||
Hubei New Chutaifu Asset Management Co., Ltd [Member] | Chief Executive Officer [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Borrowings Interest rate | 8.00% | |||||||
Interest expenses | ¥ 200 | |||||||
Loans payable to related parties | ¥ 800 | |||||||
Ownership interest | 50.00% | |||||||
Hubei New Chutaifu Asset Management Co., Ltd [Member] | Chief Executive Officer [Member] | In 2018 [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Borrowed amount | ¥ 20,000 | |||||||
Borrowings Interest rate | 12.00% | |||||||
Repayments of loan payable | ¥ 500 | |||||||
Interest expenses | 300 | |||||||
Loans payable to related parties | ¥ 19,500 | |||||||
Ownership interest | 80.80% | |||||||
Interest payable to related parties | ¥ 259 | |||||||
Hubei Daily Media Group [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 20.00% | 20.00% | 20.00% | |||||
Borrowed amount | ¥ 14,000 | ¥ 42,000 | ||||||
Borrowings Interest rate | 10.00% | 10.30% | ||||||
Interest expenses | ¥ 800 | ¥ 2,600 | ||||||
Number of days for borrowing period | 209 days | 128 days | ||||||
Hubei Daily Media Group [Member] | Lease commitment [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Operating lease agreement period | 10 years | |||||||
Variable interest entity | 20.00% | |||||||
Office space | Integer | 1,673 | |||||||
Lease and related expenses | ¥ 1,300 | ¥ 1,200 | ¥ 1,100 | |||||
Prepaid rental | 400 | 400 | ||||||
Consulting expenses | ¥ 500 | ¥ 500 | ¥ 500 | |||||
Ownership interest | 20.00% | 20.00% | 20.00% | |||||
Consulting expenses payable | ¥ 500 | ¥ 500 | ||||||
Wang Hailin [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 7.70% | 7.70% | ||||||
Borrowed amount | ¥ 10,000 | ¥ 6,000 | ||||||
Borrowings Interest rate | 10.00% | 10.00% | ||||||
Repayments of loan payable | ¥ 500 | ¥ 400 | ||||||
Interest expenses | 1,300 | 500 | ||||||
Interest payable to related parties | 33 | ¥ 243 | ||||||
Li Ling [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 2.50% | 2.50% | ||||||
Borrowed amount | ¥ 2,000 | ¥ 500 | ¥ 28,600 | |||||
Borrowings Interest rate | 10.00% | 10.00% | 10.00% | |||||
Repayments of loan payable | ¥ 100 | ¥ 1,200 | ||||||
Interest expenses | ¥ 300 | |||||||
Hubei Baoli Ecological Conservation [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 4.30% | |||||||
Loan receivables | ¥ 8,000 | |||||||
Interest received | ¥ 2,400 | |||||||
Kang Chen [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 4.30% | |||||||
Interest income rate | 36.00% | |||||||
Loan receivables | ¥ 3,000 | |||||||
Interest received | 1,000 | |||||||
Wuhan Zhong Ji Gold Co [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 10.60% | |||||||
Weighted average interest rate | 25.30% | |||||||
Payments to certain loans payable | ¥ 412 | |||||||
Loan receivables | ¥ 18,000 | |||||||
Ownership interest | 10.60% | |||||||
Interest received | ¥ 6,500 | |||||||
Wuhan Xin Heng Tai Investment Co [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Funds provided by related parties | ¥ 954 | |||||||
Loans payable to related parties | ¥ 1,366 | |||||||
Ownership interest | 10.60% | |||||||
Hubei JingChu Internet Technology [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Advertising and promotional expenses | ¥ 700 | |||||||
Hubei New Nature Investment Co [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 80.80% | 80.80% | 80.80% | |||||
Office space | Integer | 304 | |||||||
Advisory expenses | ¥ 200 | ¥ 200 | ¥ 200 | |||||
Paid reverse merger expenses on behalf | 10,900 | 11,300 | ||||||
Reverse merger expenses payable | ¥ 22,203 | ¥ 11,257 | ||||||
Hubei New Nature Investment Co [Member] | Wuhan Securities Exchanges [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Ownership interest | 80.80% | 80.80% | 80.80% | |||||
Advisory expenses with a related party | ¥ 700 | ¥ 2,500 | ¥ 3,900 | |||||
Advisory expense payable | 4,235 | 521 | ||||||
Chutian Wealth (Wuhan) Financial Services Co. Ltd [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Intermediary fees | 1,700 | 5,300 | ¥ 200 | |||||
Intermediary fee payable | ¥ 904 | |||||||
Securities exchange fund raising percentage | 6.00% | 6.00% | 6.00% | |||||
Hubei Shanyin Wealth Management Co., Ltd [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Interest income rate | 9.00% | |||||||
Interest expenses | ¥ 1,400 | |||||||
Loans payable to related parties | ¥ 60,000 | |||||||
Hubei Shanyin Wealth Management Co., Ltd [Member] | Chief Executive Officer [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Borrowings Interest rate | 69.50% | |||||||
Maturity ranging description | August to October 2019 | |||||||
Wuhan Xin Heng Tai Investment Co., Ltd [Member] | ||||||||
Disclosure of transactions between related parties [line items] | ||||||||
Variable interest entity | 10.60% | |||||||
Weighted average interest rate | 24.90% | |||||||
Loan receivables | ¥ 19,000 | |||||||
Interest received | ¥ 4,900 |
Correction of errors (Details)
Correction of errors (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Total interest expense | ¥ (27,041) | ¥ (34,465) | ¥ (23,303) |
General and administrative (note 30.2) | (20,368) | (34,895) | (14,937) |
Total operating costs and expenses | (22,162) | (38,033) | (19,836) |
Profit before income taxes (notes 30.1 and 30.2) | 26,188 | 44,376 | 57,169 |
Income tax expense (notes 30.3 and 30.4) | (18,033) | (15,550) | (15,221) |
Net profit | ¥ 8,155 | ¥ 28,826 | ¥ 41,948 |
Basic and diluted earnings per share (note 30.5) | ¥ 0.01 | ¥ 0.10 | ¥ 0.15 |
Adjustment [Member] | |||
Interest expense (note 30.1) | ¥ 4,349 | ||
Total interest expense | 4,349 | ||
General and administrative (note 30.2) | (8,175) | ||
Total operating costs and expenses | (8,175) | ||
Profit before income taxes (notes 30.1 and 30.2) | (3,826) | ||
Income tax expense (notes 30.3 and 30.4) | (914) | ||
Net profit | ¥ (4,740) | ||
Basic and diluted earnings per share (note 30.5) | ¥ (0.04) | ||
As Previously Reported [Member] | |||
Interest expense (note 30.1) | ¥ (38,140) | ||
Total interest expense | (38,814) | ||
General and administrative (note 30.2) | (26,720) | ||
Total operating costs and expenses | (29,858) | ||
Profit before income taxes (notes 30.1 and 30.2) | 48,202 | ||
Income tax expense (notes 30.3 and 30.4) | (14,636) | ||
Net profit | ¥ 33,566 | ||
Basic and diluted earnings per share (note 30.5) | ¥ 0.14 | ||
As Currently Reported [Member] | |||
Interest expense (note 30.1) | ¥ (33,791) | ||
Total interest expense | (34,465) | ||
General and administrative (note 30.2) | (34,895) | ||
Total operating costs and expenses | (38,033) | ||
Profit before income taxes (notes 30.1 and 30.2) | 44,376 | ||
Income tax expense (notes 30.3 and 30.4) | (15,550) | ||
Net profit | ¥ 28,826 | ||
Basic and diluted earnings per share (note 30.5) | ¥ 0.1 |
Correction of errors (Details 1
Correction of errors (Details 1) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flow from operating activities | |||
Profit before income taxes | ¥ 26,188 | ¥ 44,376 | ¥ 57,169 |
Credit impairment losses | (66,904) | (3,580) | (6,360) |
Operating profit before changes in working capital | 94,599 | 48,397 | 64,054 |
Interest receivables | 4,933 | (19,487) | (16,443) |
Interest payable | 1,310 | 602 | (675) |
Other payable | 9,386 | 24,032 | 4,320 |
Net cash generated/(used) by operating activities | 27,942 | (56,026) | (174,971) |
Net cash generated/(used) by operating activities | 27,266 | (70,419) | (196,430) |
Cash flow from investing activities | |||
Net cash used in investing activities | (18,385) | (14,928) | |
Cash flow from financing activities | |||
Share issuance expenses | 15,627 | ||
Proceeds received from shareholders' loans | 5,000 | 52,600 | 50,000 |
Repayment of shareholders' loans | 5,000 | 42,600 | 60,000 |
Proceeds received from loans payable | 308,629 | 363,700 | 336,240 |
Repayment of loans payable | 414,924 | 347,800 | 274,990 |
Net cash generated by financing activities | ¥ (26,795) | 10,273 | 227,480 |
As previously reported [Member] | |||
Cash flow from operating activities | |||
Profit before income taxes | 48,202 | ||
Credit impairment losses | 6,402 | ||
Operating profit before changes in working capital | 55,045 | ||
Interest receivables | (22,309) | ||
Loans receivable | |||
Interest payable | 1,333 | ||
Other payable | 13,046 | ||
Net cash generated/(used) by operating activities | 58,585 | 38,167 | |
Net cash generated/(used) by operating activities | 44,192 | 16,708 | |
Cash flow from investing activities | |||
Originated loan disbursements | (397,190) | (446,264) | |
Repayments of loans from customers | 276,150 | 233,126 | |
Net cash used in investing activities | (135,968) | (213,138) | |
Cash flow from financing activities | |||
Share issuance expenses | (9,198) | ||
Proceeds received from shareholders' loans | 14,000 | 2,000 | |
Repayment of shareholders' loans | (4,000) | (2,000) | |
Proceeds received from loans payable | 402,300 | 384,240 | |
Repayment of loans payable | (386,400) | (332,990) | |
Net cash generated by financing activities | 16,702 | ||
Adjustments [Member] | |||
Cash flow from operating activities | |||
Profit before income taxes | (3,826) | ||
Credit impairment losses | |||
Operating profit before changes in working capital | (3,826) | ||
Interest receivables | |||
Loans receivable | |||
Interest payable | (731) | ||
Other payable | 10,986 | ||
Net cash generated/(used) by operating activities | 6,429 | ||
Net cash generated/(used) by operating activities | 6,429 | ||
Cash flow from investing activities | |||
Originated loan disbursements | |||
Repayments of loans from customers | |||
Net cash used in investing activities | |||
Cash flow from financing activities | |||
Share issuance expenses | (6,429) | ||
Proceeds received from shareholders' loans | |||
Repayment of shareholders' loans | |||
Proceeds received from loans payable | |||
Repayment of loans payable | |||
Net cash generated by financing activities | (6,429) | ||
Other impacts [Member] | |||
Cash flow from operating activities | |||
Profit before income taxes | |||
Credit impairment losses | (2,822) | ||
Operating profit before changes in working capital | (2,822) | ||
Interest receivables | 2,822 | ||
Loans receivable | (121,040) | (213,138) | |
Interest payable | |||
Other payable | |||
Net cash generated/(used) by operating activities | (121,040) | (213,138) | |
Net cash generated/(used) by operating activities | (121,040) | (213,138) | |
Cash flow from investing activities | |||
Originated loan disbursements | 397,190 | 446,264 | |
Repayments of loans from customers | (276,150) | (233,126) | |
Net cash used in investing activities | 121,040 | 213,138 | |
Cash flow from financing activities | |||
Share issuance expenses | |||
Proceeds received from shareholders' loans | 38,600 | 48,000 | |
Repayment of shareholders' loans | (38,600) | (58,000) | |
Proceeds received from loans payable | (38,600) | (48,000) | |
Repayment of loans payable | 38,600 | 58,000 | |
Net cash generated by financing activities | |||
As currently reported [Member] | |||
Cash flow from operating activities | |||
Profit before income taxes | 44,376 | ||
Credit impairment losses | 3,580 | ||
Operating profit before changes in working capital | 48,397 | ||
Interest receivables | (19,487) | ||
Loans receivable | (121,040) | (213,138) | |
Interest payable | 602 | ||
Other payable | 24,032 | ||
Net cash generated/(used) by operating activities | (56,026) | (174,971) | |
Net cash generated/(used) by operating activities | (70,419) | (196,430) | |
Cash flow from investing activities | |||
Originated loan disbursements | |||
Repayments of loans from customers | |||
Net cash used in investing activities | (14,928) | ||
Cash flow from financing activities | |||
Share issuance expenses | (15,627) | ||
Proceeds received from shareholders' loans | 52,600 | 50,000 | |
Repayment of shareholders' loans | (42,600) | (60,000) | |
Proceeds received from loans payable | 363,700 | 336,240 | |
Repayment of loans payable | (347,800) | ¥ (274,990) | |
Net cash generated by financing activities | ¥ 10,273 |
Correction of errors (Details 2
Correction of errors (Details 2) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||||
Prepaid expenses and others (note 30.6) | ¥ 1,038 | ¥ 483 | ||
Total current assets | 590,937 | 853,218 | ||
Non-current assets | ||||
Prepayment for a property (note 30.6) | 14,928 | |||
Total non-current assets | 50,833 | 15,266 | ||
Total assets | 641,770 | 868,484 | ||
Current liabilities | ||||
Income taxes payable (note 30.3) | 32,477 | 15,120 | ||
Interest payable (note 30.1) | 5,139 | 3,829 | ||
Other payable (notes 30.1 and 30.2) | 35,260 | 26,716 | ||
Total current liabilities | 274,704 | 275,600 | ||
Shareholders’ equity | ||||
Additional paid-in capital (note 30.2) | 383,174 | 383,174 | ||
Statutory reserve (note 30.7) | 14,017 | 13,365 | ||
General risk reserve (note 30.7) | 9,885 | 9,817 | ||
Retained earnings | (113,257) | 67,626 | ||
Non-controlling interests in equity | 73,414 | 118,577 | ||
Total shareholders’ equity | 367,066 | 592,884 | ¥ 579,685 | ¥ 361,507 |
Total equity and liabilities | ¥ 641,770 | 868,484 | ||
As Previously Reported [Member] | ||||
Current assets | ||||
Prepaid expenses and others (note 30.6) | 15,411 | |||
Total current assets | 868,146 | |||
Non-current assets | ||||
Prepayment for a property (note 30.6) | ||||
Deferred tax asset (note 30.5) | 645 | |||
Total non-current assets | 983 | |||
Total assets | 869,129 | |||
Current liabilities | ||||
Income taxes payable (note 30.3) | 14,851 | |||
Interest payable (note 30.1) | 4,560 | |||
Other payable (notes 30.1 and 30.2) | 15,730 | |||
Total current liabilities | 265,076 | |||
Shareholders’ equity | ||||
Additional paid-in capital (note 30.2) | 388,317 | |||
Statutory reserve (note 30.7) | 7,751 | |||
General risk reserve (note 30.7) | 5,891 | |||
Retained earnings | 80,958 | |||
Non-controlling interests in equity | 120,811 | |||
Total shareholders’ equity | 604,053 | |||
Total equity and liabilities | 869,129 | |||
Restatement Adjustment [Member] | Adjustment [Member] | ||||
Current assets | ||||
Prepaid expenses and others (note 30.6) | ||||
Total current assets | ||||
Non-current assets | ||||
Prepayment for a property (note 30.6) | ||||
Deferred tax asset (note 30.5) | (645) | |||
Total non-current assets | (645) | |||
Total assets | (645) | |||
Current liabilities | ||||
Income taxes payable (note 30.3) | 269 | |||
Interest payable (note 30.1) | (731) | |||
Other payable (notes 30.1 and 30.2) | 10,986 | |||
Total current liabilities | 10,524 | |||
Shareholders’ equity | ||||
Additional paid-in capital (note 30.2) | (5,143) | |||
Statutory reserve (note 30.7) | ||||
General risk reserve (note 30.7) | ||||
Retained earnings | (3,792) | |||
Non-controlling interests in equity | (2,234) | |||
Total shareholders’ equity | (11,169) | |||
Total equity and liabilities | (645) | |||
Restatement Adjustment [Member] | Other Impacts [Member] | ||||
Current assets | ||||
Prepaid expenses and others (note 30.6) | (14,928) | |||
Total current assets | (14,928) | |||
Non-current assets | ||||
Prepayment for a property (note 30.6) | 14,928 | |||
Deferred tax asset (note 30.5) | ||||
Total non-current assets | 14,928 | |||
Total assets | ||||
Current liabilities | ||||
Income taxes payable (note 30.3) | ||||
Interest payable (note 30.1) | ||||
Other payable (notes 30.1 and 30.2) | ||||
Total current liabilities | ||||
Shareholders’ equity | ||||
Additional paid-in capital (note 30.2) | ||||
Statutory reserve (note 30.7) | 5,614 | |||
General risk reserve (note 30.7) | 3,926 | |||
Retained earnings | (9,540) | |||
Non-controlling interests in equity | ||||
Total shareholders’ equity | ||||
Total equity and liabilities | ||||
As Currently Reported [Member] | ||||
Current assets | ||||
Prepaid expenses and others (note 30.6) | 483 | |||
Total current assets | 853,218 | |||
Non-current assets | ||||
Prepayment for a property (note 30.6) | 14,928 | |||
Deferred tax asset (note 30.5) | ||||
Total non-current assets | 15,266 | |||
Total assets | 868,484 | |||
Current liabilities | ||||
Income taxes payable (note 30.3) | 15,120 | |||
Interest payable (note 30.1) | 3,829 | |||
Other payable (notes 30.1 and 30.2) | 26,716 | |||
Total current liabilities | 275,600 | |||
Shareholders’ equity | ||||
Additional paid-in capital (note 30.2) | 383,174 | |||
Statutory reserve (note 30.7) | 13,365 | |||
General risk reserve (note 30.7) | 9,817 | |||
Retained earnings | 67,626 | |||
Non-controlling interests in equity | 118,577 | |||
Total shareholders’ equity | 592,884 | |||
Total equity and liabilities | ¥ 868,484 |
Correction of errors (Details N
Correction of errors (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Correction Of Errors Details Narrative Abstract | |
Description for accounting errors identified by management | The Group had over accrued certain interest expenses of RMB4,349,000 which should have been recorded in the year of 2018. This error understated the net profit of RMB4,349,000 in 2017, overstated other payable of RMB3,618,000 and overstated interest payable of RMB731,000 as of December 31, 2017. (2) There was a total of RMB14,604,000 payable for expenses related to the reverse merger and equity transaction should have been accrued for as of December 31, 2017. RMB8,175,000 was determined to be related to the reverse merger while RMB6,429,000 was determined to be related to the equity transaction. These errors caused an overstatement of net profit in the amount of RMB8,175,000, understatement of other payable of RMB14,604,000 and overstatement of shareholders’ equity of RMB6,429,000 (or RMB5,143,000 after accounted for non-controlling interests). (3) Income tax impact for the errors stated in 1 and 2 above totaled RMB269,000 which understated the net profit for the year ended December 31, 2017. (4) The Group overstated deferred tax assets of RMB645,000 of December 31, 2017. As a result, such deferred tax asset was being reversed. This error overstated net profit by RMB645,000 for the year ended December 31, 2017. (5) The Group incorrectly computed earnings per share using net profit, instead of using net profit attributable to equity holders of the Company. Basic and diluted earnings per share impact for errors stated in 1, 2, 3, 4 and 5 was RMB0.04 per share. (6) The Group incorrectly classified a deposit of RMB14,928,000 to purchase certain floors of an office building as prepaid expenses – current. Due to non-current nature of property and equipment to be acquired, such deposit should be classified as non-current as of December 31, 2017. (7) The Group incorrectly accrued the statutory reserve and general risk reserve in accordance with the PRC regulatory requirements. As a result, under the equity section, the statutory reserve was understated by RMB7,017,000 (or RMB5,614,000 after accounted for non-controlling interests), general risk reserve was understated by RMB4,908,000 (or RMB3,926,000 after accounted for non-controlling interests) and retained earnings were overstated by RMB11,925,000 (or RMB9,540,000 after accounted for non-controlling interests). (8) The Group classified loan receivables in cash flow from investing activities as originated loan disbursement and repayments of loans from customers. However, since the Group’s principal business activities is to provide loan to customers to earn interest income, such activities should be considered as operating activities. As a result, cash flows generated by operating activities was overstated by RMB121,040,000 and RMB213,138,000 for the year ended December 31, 2017 and 2016, respectively. While cash flows used in investing activities was overstated by RMB121,040,000 and RMB213,138,000 for the year ended December 31, 2017 and 2016, respectively. (9) The Group understated proceeds received from shareholders’ loans by RMB38,600,000 and repayment of shareholders’ loans by RMB38,600,000 for the year ended December 31, 2017. The net result of both items was nil. There was no impact to the net cash generated by financing activities. (10) The Group understated proceeds received from shareholders’ loans by RMB48,000,000 and repayments of shareholders’ loans by RMB58,000,000 for the year ended December 31, 2016. There was no impact to the net cash generated by financing activities |
Subsequent events (Details Narr
Subsequent events (Details Narrative) | 1 Months Ended |
Feb. 22, 2019shares | |
Subsequenty Event [Member] | Directors [Member] | |
Disclosure of non-adjusting events after reporting period [line items] | |
Ordinary shares issuable as shares based compensations to related party | 1,077,010 |