XML 44 R35.htm IDEA: XBRL DOCUMENT v3.19.1
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 (note 30.8)     (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 (note 30.8)     (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 )