Document and Entity Information
Document and Entity Information - shares | 12 Months Ended | |
Dec. 31, 2019 | May 12, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 20-F | |
Document Registration Statement | false | |
Document Annual Report | true | |
Document Transition Report | false | |
Document Shell Company Report | false | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | FY | |
Entity Registrant Name | China Ceramics Co., Ltd | |
Entity Central Index Key | 0001470683 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | CCCL | |
Entity Common Stock, Shares Outstanding | 8,015,084 | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Interactive Data Current | Yes |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | |||
Net sales | ¥ 327,581 | ¥ 498,189 | ¥ 821,792 |
Cost of goods sold | 246,255 | 499,355 | 771,438 |
Gross profit (loss) | 81,326 | (1,166) | 50,354 |
Other income | 14,636 | 14,637 | 14,253 |
Selling and distribution expenses | (11,321) | (11,026) | (11,962) |
Administrative expenses | (25,111) | (17,990) | (17,249) |
Bad debt expense | (71,565) | ||
Loss from assets devaluation | 0 | (85,021) | (36,683) |
Finance costs | (315) | 0 | (213) |
Other expenses | 0 | (1,461) | (5,220) |
Loss before taxation | (9,445) | (418,465) | (78,285) |
Income tax expense | 56 | 209 | 9,741 |
Loss attributable to shareholders | (9,501) | (418,674) | (88,026) |
Other comprehensive loss | |||
Exchange differences on translation of financial statements of foreign operations | ¥ 118 | (807) | 275 |
Total comprehensive loss for the period | ¥ (419,481) | ¥ (87,751) | |
Loss per share | |||
Basic (RMB) | ¥ (1.56) | ¥ (93.18) | ¥ (26.36) |
Diluted (RMB) | ¥ (1.56) | ¥ (93.18) | ¥ (26.36) |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION $ in Thousands | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | ||
NONCURRENT ASSETS | ||||
Property and equipment, net | ¥ 35,000 | ¥ 46,000 | ||
Investment property, net | 0 | 0 | ||
Land use rights, net | 0 | 0 | ||
Deferred tax assets | 0 | 0 | ||
Total noncurrent assets | 35,000 | 46,000 | ||
CURRENT ASSETS | ||||
Right-of-use assets, net | 5,078,000 | 0 | ||
Inventories, net | 165,296,000 | 127,346,000 | ||
Trade receivables, net | 177,023,000 | 224,114,000 | ||
Other receivables and prepayments | 2,036,000 | 4,673,000 | ||
VAT recoverable | 1,818,000 | 27,000 | ||
Restricted Cash | 2,785,000 | 1,719,000 | ||
Cash and bank balances | 8,212,000 | 9,016,000 | ||
Total current assets | 362,248,000 | 366,895,000 | ||
CURRENT LIABILITIES | ||||
Trade payables | 22,577,000 | 24,329,000 | ||
Unearned revenue | 619,000 | 0 | ||
Accrued liabilities and other payables | 23,342,000 | 25,894,000 | ||
Amounts owed to related parties | 36,217,000 | |||
Lease liabilities | 5,793,000 | 0 | ||
Taxes payable | 842,000 | 4,497,000 | ||
Total current liabilities | 89,390,000 | 90,923,000 | ||
NET CURRENT ASSETS | 272,858,000 | 275,972,000 | ||
NET ASSETS | 272,893,000 | 276,018,000 | ||
EQUITY | ||||
Share capital | 397,000 | [1] | 306,000 | [2] |
Reserves | 272,496,000 | 275,712,000 | ||
Total stockholders' equity | ¥ 272,893,000 | ¥ 276,018,000 | ||
[1] | (2) Equivalent to US$58,000 | |||
[2] | (1) Equivalent to US$45,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - CNY (¥) ¥ in Thousands | Share capital [member] | Share premium [member] | Reverse recapitalization reserve [Member] | Merger reserve [member] | Share-based payment reserves [Member] | Statutory reserve [member] | Capital reserve [member] | Retained Earnings [Member] | Currency translation reserve [member] | Total |
Balance at Dec. 31, 2016 | ¥ 151 | ¥ 669,192 | ¥ (507,235) | ¥ 58,989 | ¥ 123,513 | ¥ 135,343 | ¥ 61,266 | ¥ 232,460 | ¥ (1,230) | ¥ 772,449 |
Statement Line Items | ||||||||||
Net loss for the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (88,026) | 0 | (88,026) |
Exchange difference on transaction of financial statements of foreign operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 275 | 275 |
Total comprehensive loss for the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (88,026) | 275 | (87,751) |
Equity compensation - employee share-based compensation | 2 | 0 | 0 | 0 | 292 | 0 | 0 | 0 | 0 | 294 |
Issuance of new shares | 53 | 9,691 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 9,744 |
Equity compensation | 2 | 0 | 0 | 0 | 292 | 0 | 0 | 0 | 0 | 294 |
Transfer to statutory reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Initial application of IFRS 9 (Note 3) | Increase (decrease) due to changes in accounting policy [member] | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (15,118) | 0 | (15,118) |
Balance (Previously stated [member]) at Dec. 31, 2017 | 129,316 | 679,618 | ||||||||
Balance at Dec. 31, 2017 | 206 | 678,883 | (507,235) | 58,989 | 123,805 | 135,343 | 61,266 | 144,434 | (955) | 694,736 |
Statement Line Items | ||||||||||
Net loss for the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (418,674) | 0 | (418,674) |
Exchange difference on transaction of financial statements of foreign operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (807) | (807) |
Total comprehensive loss for the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (418,674) | (807) | (419,481) |
Warrants exercised | 0 | |||||||||
Equity compensation - employee share-based compensation | 3 | 0 | 0 | 0 | 616 | 0 | 0 | 0 | 0 | 619 |
Issuance of new shares | 97 | 15,165 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 15,262 |
Equity compensation | 3 | 0 | 0 | 0 | 616 | 0 | 0 | 0 | 0 | 619 |
Transfer to statutory reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Initial application of IFRS 9 (Note 3) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (2,114) | 0 | (2,114) |
Balance (Previously stated [member]) at Dec. 31, 2018 | (291,472) | 273,904 | ||||||||
Balance at Dec. 31, 2018 | 306 | 694,048 | (507,235) | 58,989 | 124,421 | 135,343 | 61,266 | (289,358) | (1,762) | 276,018 |
Statement Line Items | ||||||||||
Net loss for the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (9,501) | 0 | (9,501) |
Exchange difference on transaction of financial statements of foreign operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (118) | (118) |
Total comprehensive loss for the year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | (9,501) | (118) | |
Issuance of new shares for equity financing | 67 | 6,199 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 6,266 |
Warrants exercised | 19 | 1,697 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1,716 |
Equity compensation - employee share-based compensation | 5 | 0 | 0 | 0 | 621 | 0 | 0 | 0 | 0 | 626 |
Equity compensation | 5 | 0 | 0 | 0 | 621 | 0 | 0 | 0 | 0 | 626 |
Transfer to statutory reserves | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Balance at Dec. 31, 2019 | ¥ 397 | ¥ 701,944 | ¥ (507,235) | ¥ 58,989 | ¥ 125,042 | ¥ 135,343 | ¥ 61,266 | ¥ (300,973) | ¥ (1,880) | ¥ 272,893 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Loss before taxation | ¥ (9,445) | ¥ (418,465) | ¥ (78,285) |
Adjustments for | |||
Amortization of land use rights | 0 | 108 | 143 |
Operating lease charge | (12,187) | 0 | 0 |
Depreciation of property, plant and equipment | 12 | 11,500 | 15,371 |
Amortization of prepaid expenses | 2,677 | 0 | 0 |
Gain on disposal of property, plant and equipment | 0 | 0 | (70) |
Write down of inventories (reversal of inventory provision) | (56,766) | 55,973 | (2,733) |
Bad debt provision of trade receivables | 71,565 | ||
Loss from assets devaluation | 0 | 85,021 | 36,683 |
Share based compensation | 627 | 619 | 294 |
Interest expense | 315 | 0 | 206 |
Operating cash flows before working capital changes | 18,268 | 51,194 | 43,174 |
Decrease in inventories | 18,817 | 8,347 | 23,808 |
Increase in trade receivables | (21,570) | (23,309) | (50,384) |
Decrease (Increase) in other receivables and prepayments | (40) | (2,521) | 12,058 |
Decrease in trade payables | (1,753) | (36,755) | (23,173) |
Increase in unearned revenue | 619 | 0 | 0 |
Increase (decrease) in taxes payable | (5,502) | 635 | 0 |
Decrease in accrued liabilities, other payables, and amounts owed to related parties | (2,552) | (3,825) | (7,529) |
Cash generated from (used in) operations | 6,287 | (6,234) | (2,046) |
Interest paid | 0 | 0 | 0 |
Income tax paid | 0 | 0 | 0 |
Net cash generated from (used in) operating activities | 6,287 | (6,234) | (2,046) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Acquisition of fixed assets | 0 | 0 | (5,618) |
Proceed from disposal of property, plant and equipment | 0 | 0 | 70 |
Decrease (increase) in restricted cash | (1,066) | (1,719) | 0 |
Net cash used in investing activities | (1,066) | (1,719) | (5,548) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Payments of lease liabilities | (13,902) | 0 | 0 |
Insurance of share capital for equity financing | 5,033 | 15,262 | 9,537 |
Warrants exercised | 2,948 | 0 | 0 |
Advance from related parties | 14 | 186 | 0 |
Net cash generated from (used in) financing activities | (5,907) | 15,448 | 9,537 |
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS | (686) | 7,495 | 1,943 |
CASH & EQUIVALENTS, BEGINNING OF YEAR | 9,016 | 2,328 | 110 |
EFFECT OF FOREIGN EXCHANGE RATE DIFFERENCES | (118) | (807) | 275 |
CASH & EQUIVALENTS, END OF YEAR | ¥ 8,212 | ¥ 9,016 | ¥ 2,328 |
GENERAL INFORMATION
GENERAL INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
GENERAL INFORMATION | |
GENERAL INFORMATION | 1. GENERAL INFORMATION China Ceramics Co., Ltd. (“China Ceramics” or the “Company”) is a British Virgin Islands company operating under the BVI Business Companies Act (2004) with its shares listed on the NASDAQ (“symbol: CCCL”). Its predecessor company, China Holdings Acquisition Corp. (“CHAC”), was incorporated in Delaware on June 22, 2007, and was organized as a blank check company for the purpose of acquiring, through a stock exchange, asset acquisition or other similar business combination, or controlling, through contractual arrangements, an operating business, that has its principal operations in Asia. The Company has no operations and has no assets or liabilities of consequence outside its investments in its operating subsidiaries. The head office of the Company is located at Junbing Industrial Zone, Jinjiang City, Fujian Province, the People’s Republic of China (“PRC”). On November 20, 2009, CHAC merged with and into China Ceramics, its wholly owned British Virgin Islands subsidiary, with China Ceramics surviving the merger (the “Redomestication”). On the same day, pursuant to the terms of a merger and stock purchase agreement dated August 19, 2009 (the “acquisition agreement”), China Ceramics acquired all of the outstanding securities of Success Winner Limited (“Success Winner”) held by Mr. Wong Kung Tok in exchange for US$10.00 and 5,743,320 shares of China Ceramics (the “Success Winner Acquisition”). The total number of issued and outstanding shares of China Ceramics immediately after the acquisition was 8,950,171. Prior to the Success Winner Acquisition on November 20, 2009, neither CHAC nor China Ceramics had an operating business. Jinjiang Hengda Ceramics Co., Ltd. (“Hengda”), which became the operating entity of China Ceramics in connection with the Success Winner Acquisition, was established on September 30, 1993 under the laws of PRC with 15% of its equity interest owned by Fujian Province Jinjiang City Anhai Junbing Hengda Construction Material Factory (“Anhai Hengda”) and 85% owned by Chi Wah Trading Import and Export Company (“Chi Wah”). Chi Wah is a sole proprietor under the laws of Hong Kong with its legal and equitable interest solely owned by Mr. Wong Kung Tok. Anhai Hengda was owned by Mr. Wong Kung Tok’s family, which was considered an act-in-concert party of Mr. Wong Kung Tok for accounting purposes. Hengda is principally engaged in the manufacture and sale of ceramic tiles used for exterior siding and for interior flooring and design in residential and commercial buildings. Hengda’s owners reorganized the corporate structure in 2008 and 2009 (the “Hengda Reorganization” or the “Reorganization”), as follows: Stand Best Creation Limited (“Stand Best”) was established on January 17, 2008 under the laws of Hong Kong with its paid-up share capital being HK$1.00 divided into 1 ordinary share solely owned by Mr. Wong Kung Tok. Stand Best acquired 100% of Hengda’s equity interest from Anhai Hengda and Chi Wah on April 1, 2008 at the consideration of RMB 58,980,000. Success Winner Limited (“Success Winner”) was incorporated in the British Virgin Islands on May 29, 2009 as a limited liability company. Its paid-up and issued capital is US$1 divided into 1 ordinary share solely owned by Mr. Wong Kung Tok. On June 30, 2009, through a capitalization agreement between Mr. Wong Kung Tok and Stand Best, Stand Best capitalized a shareholder loan due to Mr. Wong Kung Tok in the amount of HK$67.9 million (equivalent to approximately RMB 58.9 million) through the issuance of an aggregate of 9,999 ordinary shares of HK$1.00 par value which Mr. Wong Kung Tok allotted to Success Winner. On the same date, Mr. Wong Kung Tok transferred his ownership of the remaining 1 ordinary share of Stand Best to Success Winner, thus making Success Winner the sole parent company of Stand Best. On January 8, 2010, Hengda completed the acquisition of all voting equity interests of Jiangxi Hengdali Ceramic Materials Co., Ltd. (“Hengdali” or the “Gaoan Facility”), located in Gaoan, Jiangxi Province (the “Hengdali Acquisition”). Hengdali manufactures and sells ceramics tiles used for exterior siding and for interior flooring. In total, Hengda assumed loans of RMB 60.0 million and paid cash consideration of RMB 185.5 million for the acquisition. On September 17, 2013, Fujian Province Hengdali Building Materials Co., Ltd. (“Fujian Hengdali”) was incorporated in Pingtan, Fujian Province, 100% owned by Hengda. Fujian Hengdali’s approved scope of business includes sales of building materials and interior and exterior decoration materials. Fujian Hengdali had no operations since the incorporation date, and in August 2017, the Company disposed of Fujian Hengdali for RMB 0 to a third-party. A loss on disposal of RMB 736,000 was recognized in other expenses for the year ended December 31, 2017 relating to this transaction. On September 22, 2017, Success Winner incorporated a 100% owned subsidiary Vast Elite Limited (“Vast Elite”) in Hong Kong with an initial registered capital of HKD1. Vast Elite is engaged in the trading of building materials, but had no operations during the year ended December 31, 2019. On November 20, 2019, Vast Elite incorporated a 100% owned subsidiary Chengdu Future Talented Management and Consulting Co, Ltd ("Chengdu Future") in China. Chengdu Future is engaged in the business management and consulting services. On December 3, 2019, Success Winner incorporated a 100% owned subsidiary Antelope Enterprise Holdings Limited ("Antelope Holdings") in Hong Kong. Antelope Holdings only serves the purpose as a holding company. China Ceramics and its subsidiaries’ (the “Company”) corporate structure as of December 31, 2019 is as follows: China Ceramics Co., Ltd (BVI Company) 100% Success Winner Limited (BVI Company) 100% 100% 100% Antelope Enterprise Holdings Limited Stand Best Creation Limited Vast Elite Limited (Hong Kong Company) (Hong Kong Company) (Hong Kong Company) 100% 100% Jinjiang Hengda Ceramics Co., Ltd Chengdu Future Talented Management and Consulting Co., Ltd (PRC WOFE Company) (PRC WOFE Company) 100% Jiangxi Hengdali Ceramic Materials Co., Ltd (PRC Company) Nominal value of Place and date of issued ordinary Percentage of incorporation or share equity establishment/ /registered attributable to the Name operations capital Company Principal activities Direct Indirect Success Winner Limited British Virgin Islands, May 29, 2009 US$ 1 100 — Investment holding Stand Best Creation Limited Hong Kong, January 17, 2008 HKD 10,000 — 100 Investment holding Jinjiang Hengda Ceramics Co., Ltd. (note 1) PRC, September 30, 1993 RMB 288,880,000 — 100 Manufacture and sale of ceramic tiles Jiangxi Hengdali Ceramic Materials Co., Ltd. (note 1) PRC, May 4, 2008 RMB 55,880,000 — 100 Manufacture and sale of ceramic tiles Fujian Province Hengdali Building Materials Co., Ltd (note 2) PRC, September 17,2013 RMB 1,000,000 — 100 Sale of building and decoration materials Vast Elite Limited (note 1) Hong Kong, September 22, 2017 HKD 1 — 100 Trading of building material Chengdu Future (note 3) PRC, November 20, 2019 RMB — Business management and consulting services Antelope Enterprise Holdings Limited Hong Kong, December 3, 2019 HKD 10,000 — 100 Investment holding Note: 1. The registered capital of Hengda, Hengdali, Fujian Hengdali, Vast Elite and Antelope Holdings had been fully paid up. 2. Fujian Hengdali was disposed in August 2017. 3. Chengdu Future is allowed to pay the registered capital in full before November 12, 2049. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”), which collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the IASB. The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarized below. These policies have been consistently applied to all the years presented unless otherwise stated. The adoption of new or amended IFRSs and the impacts on the Company’s financial statements, if any, are disclosed in Note 3. The consolidated financial statements have been prepared on the historical cost basis, except for derivative financial instruments that have been measured at fair value. The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgments made by management in the application of IFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4. The consolidated financial statements were approved and authorized for issue by the Board of Directors on May 20, 2020. 2.2 Basis of consolidation The Success Winner Acquisition on November 22, 2009 has been accounted for as a reverse recapitalization. The acquisition agreement resulted in the former owner of Success Winner obtaining effective operating and financial control of the combined entity. Prior to the acquisition, China Ceramics had no operating business. Accordingly, the acquisition does not constitute a business combination for accounting purposes and is accounted for as a capital transaction. That is, the transaction is in substance a reverse recapitalization, equivalent to the issuance of equity interests by Success Winner for the net monetary assets of China Ceramics accompanied by a recapitalization. The consolidated financial statements are a continuation of the financial statements of Success Winner. The assets and liabilities of China Ceramics are recognized at their carrying amounts at the date of acquisition with a corresponding credit to the consolidated equity and no goodwill or other intangible assets are recognized. The equity of the combined entity recognized at the date of acquisition represents the equity balances of Success Winner together with the deemed proceeds from the reverse recapitalization determined as described above. However, the equity structure presented in the consolidated financial statements (number and values of equity instruments issued) reflects the equity structure of the legal parent, China Ceramics. Costs directly attributable to the transaction have been debited to equity to the extent of net monetary assets received. Success Winner and its subsidiaries as a group is regarded as a continuing entity resulting from the Hengda Reorganization since the management of all the entities which took part in the Reorganization were controlled by the same director and shareholder before and immediately after the Reorganization. Immediately after the Reorganization, there was a continuation of the control over the entities’ financial and operating policy decision and risk and benefits to the ultimate shareholders that existed prior to the Reorganization. Accordingly, the reorganization has been accounted for as a reorganization under common control and the financial statements of Success Winner, Stand Best and Hengda have been combined on the basis of merger accounting for all periods presented. The assets and liabilities of the combining entities or businesses are combined using the existing book values from the controlling party’s perspective. No amount is recognized as consideration for goodwill or excess of the acquirer’s interest in the net fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of the common control combination. The consolidated statement of comprehensive income includes the results of each of the combining entities or businesses from the earliest date presented or the date of their incorporation/establishment or since the date when the combining entities or businesses first came under common control, where this is a shorter period, regardless of the date of the common control combination. The Hengdali Acquisition on January 8, 2010 has been accounted for as a business combination using the acquisition method. Hengdali is a subsidiary of the Company, and the Company has the power to govern the financial and operating policies which accompanies its shareholding of 100% of the voting rights in Hengdali. Therefore, Hengdali as a subsidiary is fully consolidated from January 8, 2010, the date on which control was transferred to the Company. The accounting for the Hengdali Acquisition under the acquisition method, treats the consideration transferred for the acquisition of Hengdali as the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in this business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill. The Company’s financial statements consolidate those of the Company and all of its subsidiaries as of December 31, 2019. Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether the Company has power, only substantive rights (held by the Company and other parties) are considered. All subsidiaries have a reporting date of December 31. An investment in a subsidiary is consolidated into the consolidated financial statements form the date that control commences until the date that control ceases. Inter-company transactions, balances and unrealized gains or losses on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. 2.3 Foreign currency translation The financial statements are presented in RMB (to the nearest thousand), being the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company. The Company’s operations are conducted through the subsidiaries in the People’s Republic of China (“PRC”). The functional currency of these subsidiaries is Renminbi (“RMB”). The functional currency of China Ceramics is the United State dollars (US$). In the individual financial statements of the consolidated entities, foreign currency transactions are translated into the functional currency of the individual entity using the exchange rates prevailing at the dates of the transactions. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the reporting date retranslation of monetary assets and liabilities are recognized in profit or loss. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined and are reported as part of the fair value gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. In the consolidated financial statements, all individual financial statements of foreign operations, originally presented in a currency different from the Company’s presentation currency, have been converted into Renminbi. Assets and liabilities have been translated into Renminbi at the closing rates at the reporting date. Income and expenses have been converted into Renminbi at the exchange rates ruling at the transaction dates, or at the average rates over the reporting period provided that the exchange rates do not fluctuate significantly. Any differences arising from this procedure have been recognized in other comprehensive income and accumulated separately in the currency translation reserve in equity. When a foreign operation is sold, such exchange differences are reclassified from equity to profit or loss as part of the gain or loss on sale. The translation of certain RMB amounts as of and for the year ended December 31, 2019 into US$ is included in these financial statements solely for the convenience of readers and was made at the rate of RMB 6.96 to US$1.00, which was based on the noon buying rate on December 31, 2019 in the City of New York cable transfers of RMB as certified for customers purposes by the Federal Reserve Bank of New York. Such translation should be construed as representation that RMB amounts could be converted, realized or settled into US$ at the rate stated above or at any other rate. 2.4 Property, plant and equipment Leasehold land and buildings for own use When a lease includes both land and building elements, the Company assesses the classification of each element as a finance or an operating lease separately based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the Company, unless it is clear that both elements are operating leases in which case the entire lease is classified as an operating lease. Specifically, the minimum lease payments (including any lump sum upfront payments) are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of the lease. To the extent the allocation of the lease payments can be made reliably, interest in leasehold land that is accounted for as an operating lease is presented as "land use rights" in the consolidated statements of financial position and is amortized over the lease term on a straight-line basis. All buildings are depreciated over their expected useful lives of 40 years. Other property, plant and equipment Property, plant and equipment are stated in the consolidated statements of financial position at cost less any accumulated depreciation and any accumulated impairment losses. Depreciation is provided to write off the cost less their residual values over their estimated useful lives as follows, using the straight-line method: Plant and machinery 10 years Motor vehicles 10 years Office equipment 5 years The assets’ residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other costs, such as repairs and maintenance, are charged to profit or loss during the financial period in which they are incurred. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The gain or loss arising on retirement or disposal is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. 2.5 Investment property Investment properties are properties held to earn rentals or for capital appreciation. Investment properties are initially measured at historical cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured at their historical cost less any accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other costs, such as repairs and maintenance, are charged to profit or loss during the financial period in which they are incurred. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The gain or loss arising on retirement or disposal is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use or no future economic benefits are expected from its disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the item is derecognized. 2.6 Land use rights Upfront payments made to acquire land held under an operating lease are stated at cost less accumulated amortization and any accumulated impairment losses. Amortization is calculated on a straight line basis over the leasing period of 50 years. The carrying amounts of land used rights were reclassified to right-of-use assets to conform to IFRS 16. 2.7 Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to each of the Company’s cash-generating units, or groups of cash-generating units, that is expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently whenever there is indication that the unit may be impaired. If some or all of the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than the carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro – rata basis based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods. On disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. 2.8 Inventories Inventories are carried at the lower of cost and net realizable value. Cost is determined using the weighted average basis, and in the case of work in progress and finished goods, comprises direct materials, direct labor and an appropriate proportion of overhead. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and applicable selling expenses. When inventories are sold, the carrying amount of those inventories is recognized as an expense in the period in which the related revenue is recognized. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories is recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs. 2.9 Cash and cash equivalents Cash and cash equivalents include cash at bank and in hand, demand deposits with banks and short term highly liquid investments with original maturities of three months or less that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows presentation, cash and cash equivalents include bank overdrafts which are repayable on demand and form an integral part of the Company’s cash management. 2.10 Financial instruments Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value except for trade debtors arising from contracts with customers which are initially measured in accordance with HKFRS 15 since 1 January 2019. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets or liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. The effective interest method is a method of calculating the amortized cost of a financial asset or financial liability and of allocating interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Interest income which are derived from the Company’s ordinary course of business are presented as revenue. Financial assets Classification and subsequent measurement of financial assets (upon application of IFRS 9) Financial assets that meet the following conditions are subsequently measured at amortized cost: · the financial asset is held within a business model whose objective is to collect contractual cash flows; and · the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All other financial assets are subsequently measured at fair value through profit or loss (“FVTPL”). A financial asset is classified as held for trading if: · it has been acquired principally for the purpose of selling in the near term; or · on initial recognition it is a part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or · it is a derivative that is not designated and effective as a hedging instrument. In addition, the Company may irrevocably designate a financial asset that are required to be measured at the amortized cost as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch. (i) Amortized cost and interest income Interest income is recognized using the effective interest method for financial assets measured subsequently at amortized cost. Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired, interest income is recognized by applying the effective interest rate to the amortized cost of the financial asset from the next reporting period. If the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognized by applying the effective interest rate to the gross carrying amount of the financial asset from the beginning of the reporting period following the determination that the asset is no longer credit impaired. (ii) Financial assets at FVTPL Financial assets that do not meet the criteria for being measured at amortized cost are measured at FVTPL. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or loss. The net gain or loss recognized in profit or loss includes any dividend or interest earned on the financial asset and is included in the “other gains and losses” line item. Impairment of financial assets (upon application IFRS 9) The Company recognizes a loss allowance for expected credit loss (“ECL”) on financial assets which are subject to impairment under IFRS 9 (including trade and other receivables, bank deposits and bank balances). ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition. General approach ECLs are recognized in two measurement bases. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12‑months (a 12‑month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward looking information. The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Financial assets at amortized cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below. Stage 1 — Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12‑month ECLs Stage 2 — Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs Stage 3 — Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs Simplified approach For trade receivables that do not contain a significant financing component or when the Company applies the practical expedient of not adjusting the effect of a significant financing component, the Company applies the simplified approach in calculating ECLs. Under the simplified approach, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that occurred after the initial recognition of the asset have an impact on the estimated future cash flows of the financial asset or the Company of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial assets carried at amortized cost For financial assets carried at amortized cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment. The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognized in profit or loss. Interest income continues to be accrued on the reduced carrying amount using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to other expenses in the statement of profit or loss. Classification and subsequent measurement of financial assets (before application of IFRS 9 on January 1, 2018) The Company’s financial assets are loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially recognized at fair value. Subsequent to initial recognition, loans and receivables (including trade and other receivables, pledged bank deposits, fixed bank deposits with maturity periods over three months and bank balances) are measured at amortized cost using the effective interest method, less any identified impairment losses). Impairment of financial assets Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected. Objective evidence of impairment could include: · significant financial difficulty of the issuer or counterparty; or · breach of contract, such as a default or delinquency in interest or principal payments; or · it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or disappearance of an active market for that financial asset because of financial difficulties. If any such evidence exists, the impairment loss on trade receivables and other current receivables and other financial assets carried at amortized cost is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition of these assets), where the effect of discounting is material. This assessment is made collectively where these financial assets share similar risk characteristics, such as similar past due status, and have not been individually assessed as impaired. Future cash flows for financial assets which are assessed for impairment collectively are based on historical loss experience for assets with credit risk characteristics similar to the collective group. If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the impairment loss was recognized, the impairment loss is reversed through profit or loss. A reversal of an impairment loss shall not result in the asset’s carrying amount exceeding that which would have been determined had no impairment loss been recognized in prior years. Impairment losses are written off against the corresponding assets directly, except for impairment losses recognized in respect of trade receivables included within trade and other receivables and prepayments, whose recovery is considered doubtful but not remote. In this case, the impairment losses for doubtful debts are recorded using an allowance account. When the Company is satisfied that recovery is remote, the amount considered irrecoverable is written off against trade debtors directly and any amounts held in the allowance account relating to that debt are reversed. Subsequent recoveries of amounts previously charged to the allowance account are reversed against the allowance account. Other changes in the allowance account and subsequent recoveries of amounts previously written o |
CHANGES IN ACCOUNTING POLICIES
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES | 12 Months Ended |
Dec. 31, 2019 | |
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES | |
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES | 3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES 3.1 Adoption of new or amended IFRSs The following amendments to standards have been adopted by the Company for the first time for the financial year beginning on 1 January 2019. The application of the amendments to IFRSs in the current year has had no material impact on the Company’s financial performance and positions for the current and prior years and/or on the disclosures set out in these consolidated financial statements. IFRS 16 Lease IFRS 16 will result in almost all leases being recognized on the statement of financial position, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases. The accounting for lessors will not be significantly changed. The standard will affect primarily the accounting for Company’s operating leases. Management has just commenced its assessment and have not yet determined to what extent its commitments will result in the recognition of an asset and a liability for future payments and how this will affect the Company’s profit and classification of cash flows. The Company adopted IFRS 16 Leases retrospectively from January 1, 2019. In accordance with the transitional provision under IFRS 16, the Company applied the simplified transition approach, and all right-of-use assets were measured at the amount of the lease liabilities on adoption (adjusted for any prepaid or accrued lease expenses). Comparative figures for the 2018 financial year have not been restated. On adoption of IFRS 16, the Company recognized lease liabilities in relation to leases which had previously been classified as “operating leases” under the principles of IAS 17 Leases. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of January 1, 2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 5.75% (Note 22). RMB’000 Operating lease commitments disclosed as at December 31, 2018 19,695 Discounted using weighted average incremental borrowing rate of 5.75% 15,496 Lease liabilities recognized as at January 1, 2019 19,380 All right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognized in the consolidated statement of financial position as at December 31, 2018. The impact on transition of IFRS 16 is summarized as below: January 1, 2019 RMB’000 Right-of-use assets 17,266 Lease liability (19,380) Retained earnings 2,114 3.2 Accounting standards issued but not yet effective At the date of authorization of these financial statements, there was no new standards, amendments and interpretations to existing standards that were relevant to the Company have been published by the IASB but are not yet effective, and have not been adopted by the Company. |
CRITICAL ACCOUNTING ESTIMATES A
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | 12 Months Ended |
Dec. 31, 2019 | |
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | |
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The key sources of estimation uncertainty and key assumptions concerning the future at the end of the reporting period, 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: Useful lives and impairment assessment of property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and identified impairment losses. The estimation of useful lives impacts the level of annual depreciation expenses recorded. Property, plant and equipment are evaluated for possible impairment on a specific asset basis or in groups of similar assets, as applicable. This process requires management’s estimate of future cash flows generated by each asset or group of assets. For any instance where this evaluation process indicates impairment, the relevant asset’s carrying amount is written down to the recoverable amount and the amount of the write-down is charged against profit or loss. Investment properties are stated at cost less accumulated depreciation and identified impairment losses. The estimation of useful lives impacts the level of annual depreciation expenses recorded. Investment properties are evaluated for possible impairment on a specific asset basis or in groups of similar assets, as applicable. This process requires management’s estimate of future cash flows generated by each asset or group of assets. For any instance where this evaluation process indicates impairment, the relevant asset’s carrying amount is written down to the recoverable amount and the amount of the write-down is charged against profit or loss. Impairment loss recognized in respect of property, plant and equipment As of December 31, 2019, the net carrying amount of property, plant and equipment was approximately RMB 35,000 (2018: RMB 46,000). No impairment loss was recognized against the original carrying amount of property, plant and equipment for the year ended December 31, 2019. The impairment loss recognized for the years ended December 31, 2018 and 2017 was RMB 75,907,000 and RMB 33,653,000, respectively. Determining whether property, plant and equipment are impaired requires an estimation of the recoverable amount of the property, plant and equipment. Such estimation was based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. Impairment loss recognized in respect of investment property As of December 31, 2019, the net carrying amount of investment property was nil (2018: nil). No impairment loss was recognized against the original carrying amount of investment property for the year ended December 31, 2019. The impairment loss recognized for the years ended December 31, 2018 and 2017 was approximately RMB 4,858,000 and RMB 1,617,000, respectively. Determining whether investment property are impaired requires an estimation of the recoverable amount of the investment property. Such estimation was based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. Impairment loss recognized in respect of land use rights As of December 31, 2019, the net carrying amount of land use rights was nil (2018: nil). No impairment loss was recognized against the original carrying amount of land use rights for the year ended December 31, 2019. The carrying amounts of land used rights were reclassified to right-of-use assets to conform to IFRS 16 during the year ended December 31, 2019. The impairment loss recognized for the years ended December 31, 2018 and 2017 was RMB 4,256,000 and RMB 1,413,000, respectively. Determining whether land use rights are impaired requires an estimation of the recoverable amount of the land use rights. Such estimation was based on certain assumptions, which are subject to uncertainty and might materially differ from the actual results. Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Company to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. No impairment was made on goodwill for the year ended December 31, 2019. The impairment made on goodwill for the years ended December 31, 2018 and 2017 was nil. Income tax The Company has exposure to income taxes in the PRC. Significant judgment is required in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for expected tax issues based on estimates of whether additional taxes will be due. When the final tax outcome of these matters is different from the amounts that were initially recognized, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amounts of the Company’s income tax payable as of December 31, 2019 and 2018 were nil. Impairment of trade receivables The Company’s management assesses the collectability of trade receivables. This estimate is based on the credit history of the Company’s customers and the current market conditions. Management assesses the collectability of trade receivables at the balance sheet dates and makes the provision, if any. The identification of doubtful debts requires the use of judgment and estimates. Judgment is required in assessing the ultimate realization of these receivables, including the current creditworthiness, past collection history of each customer and on-going dealings with them. Where the expectation is different from the original estimate, such difference will impact the carrying value of trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed. The net carrying amounts of the Company’s trade receivables as of December 31, 2019 and 2018 were RMB 177,023,000 and RMB 224,114,000, respectively. Net realizable value of inventories Net realizable value of inventories is the management’s estimation of future selling price in the ordinary course of business, less estimated costs of completion and selling expenses. These estimates are based on the current market condition and the historical experience of selling products of a similar nature. It could change significantly as a result of various market factors. The net carrying amounts of the Company’s inventories as of December 31, 2019 and 2018 were RMB 165,296,000 and RMB 127,346,000, respectively. Share-based payment transaction The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the stock option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 27. |
REVENUE AND OTHER INCOME
REVENUE AND OTHER INCOME | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE AND OTHER INCOME | |
REVENUE AND OTHER INCOME | 5. REVENUE AND OTHER INCOME Revenue comprises the fair value of the consideration received or receivable for the sale of goods. An analysis of the Company’s revenue and other income is as follows: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Revenue Sale of goods 327,581 498,189 821,792 Other income Interest income 73 36 32 Foreign exchange gain 74 450 — Consulting income 109 — — Rent deposit refund 88 — — Other income 96 — — Gain on disposal of fixed assets — — 70 Rental income 14,196 14,151 14,151 14,636 14,637 14,253 |
FINANCE COSTS
FINANCE COSTS | 12 Months Ended |
Dec. 31, 2019 | |
FINANCE COSTS | |
FINANCE COSTS | 6. FINANCE COSTS Finance costs comprise interest expense on the Company’s bank borrowings: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Interest on lease liability 315 — — Interest on bank borrowings — — |
REALIZED AND UNREALIZED FAIR VA
REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2019 | |
REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS | |
REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS | 7. REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Realized and unrealized fair value (loss)/gain on derivative financial instruments — — — |
LOSS BEFORE TAXATION
LOSS BEFORE TAXATION | 12 Months Ended |
Dec. 31, 2019 | |
LOSS BEFORE TAXATION | |
LOSS BEFORE TAXATION | 8. LOSS BEFORE TAXATION The Company’s loss before taxation is arrived at after charging: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Cost of inventories recognized as expense (1) 246,255 499,355 771,438 Depreciation expenses 12 11,500 15,371 Amortization of land use rights — 108 143 Right-of-use asset depreciation charge 12,187 — — Auditors’ remuneration – Audit fees 1,689 1,628 320 – Audit-related fees — — — 1,689 1,628 320 Directors’ remuneration – salaries and related cost 1,747 1,418 1,200 – retirement scheme contribution 16 16 9 – share-based payments — — — Key management personnel (other than directors) – salaries and related cost 671 753 1,447 – retirement scheme contribution 20 24 23 – share-based payments 622 619 304 Research and development personnel – salaries and related cost 313 789 936 – retirement scheme contribution 45 78 102 Other personnel – salaries and related cost 26,001 33,023 55,526 – retirement scheme contribution 3,867 5,526 5,526 Total employee benefit expenses 33,302 42,246 68,025 (1) right-of-use asset depreciation/operating lease charges of RMB 12,503,000, RMB 13,902,000 and RMB 13,902,000, and (reversal of ) / (reversal) write-down of inventories of RMB (56,766,000), RMB 55,973,000 and RMB (2,733,000) for the years ended December 31, 2019, 2018, and 2017, respectively, which amounts are also included in the respective total amounts disclosed separately for each of these types of expenses. |
INCOME TAX EXPENSE_(CREDIT)
INCOME TAX EXPENSE/(CREDIT) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAX EXPENSE/(CREDIT) | |
INCOME TAX EXPENSE/(CREDIT) | 9. INCOME TAX EXPENSE/(CREDIT) For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Current Tax: PRC Income Tax 29 — 5,185 Reversal of income tax refundable 27 — — — — 5,185 Deferred tax expense — 209 4,556 56 209 9,741 Reconciliation between income tax expense (credit) and (loss) profit before taxation at applicable tax rates is as follows: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Loss before taxation (9,445) (418,465) (78,285) Tax calculated at a tax rate of 25% (2,361) (104,616) (19,571) Tax effect on non-deductible expenses — — — Tax effect on different tax rates of group entities operating in other jurisdictions 842 588 218 Impairment losses on property, plant and equipment, and investment property that are not tax deductible — 20,191 8,817 Impairment losses on land use right that are not tax deductible — 1,064 353 Inventory provision (reversal) that are not tax deductible (taxable) (14,192) 13,993 (683) Bad debts expense that are not tax deductible 17,165 79,057 6,232 Depreciation and amortization adjustments that are not tax deductible (18,050) (15,890) (15,617) Other 29 — — Income tax refund that are not expected to receive — — 24,270 Net operating losses not recognized to deferred tax assets 16,623 5,822 5,722 Tax per financial statements 56 209 9,741 British Virgin Islands Profits Tax The Company has not been subject to any taxation in this jurisdiction for the years ended December 31, 2019, 2018 and 2017. Hong Kong Profits Tax The subsidiary in Hong Kong is subject to tax charged on Hong Kong sourced income with a statutory tax rate of 16.5% for the years ended December 31, 2019, 2018 and 2017. No Hong Kong profits tax has been provided as the Company has no assessable profit arising in Hong Kong for the years ended December 31, 2019, 2018 and 2017. PRC Income Tax The subsidiaries in the PRC are subject to the enterprise income tax in accordance with “PRC Enterprise Income Tax Law” (“EIT Law”), and the applicable income tax rate for the years ended December 31, 2019, 2018 and 2017 is 25%. Under the prevailing EIT Law and its relevant regulations, any dividends paid by the Company’s PRC subsidiaries to an overseas parent made out of profits earned after January 1, 2008 to non-PRC corporate residents are subject to a 10% PRC dividend withholding tax, unless reduced by tax treaties or arrangements. In addition, under the Sino-Hong Kong Double Tax Arrangement and its relevant regulations, a qualified Hong Kong tax resident will be liable for withholding tax at the rate of 5% for dividend income derived from the PRC if the Hong Kong tax resident is the “beneficial owner” and holds 25% or more of the equity interests of the PRC company. Deferred tax liabilities have been provided for based on the expected dividends to be distributed from these subsidiaries in the foreseeable future in respect of the profits generated since 1 January 2008. Dividends withholding tax represents tax charged/to be charged by the PRC tax authority on dividends distributed or intended to be distributed by the Company’s subsidiaries in Mainland China during the years. Deferred tax (assets)/liabilities recognized in the consolidated statements of financial position and the movements during the years are as follows: Dividend withholding Inventory Impairment Bad debt Net operating Depreciation and Deferred tax arising from: tax provision loss allowance loss amortization Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As of January 1, 2017 — (4,765) — — — — (4,765) Charges/(credits) for the year — 4,765 — — — (209) 4,556 As of December 31, 2017 — — — — — (209) (209) Charges/(credits) for the year — — — — — 209 209 As of December 31, 2018 — — — — — — — Charges/(credits) for the year As of December 31, 2019 — — — — — — — Hengda and Hengdali, the Company’s PRC subsidiaries, have cumulative undistributed earnings of RMB 267,193,000, RMB 329,503,000 and RMB 380,109,000, as of December 31, 2019, 2018 and 2017, which are included in consolidated retained earnings. Deferred tax liabilities of RMB nil has been recognized to the extent of distributable profits earned by Hengda as of December 31, 2019, 2018and 2017. No provision has been made for deferred taxes related to future repatriation of the remaining earnings, as the Company controls the dividend policy of these PRC subsidiaries and it has been determined that it is probable that these profits will not be distributed in the foreseeable future. If the Company were to distribute these cumulated earnings in the foreseeable future, the deferred tax liabilities of RMB 13,360,000, RMB 16,475,000 and RMB 19,005,000 would be recognized as of December 31, 2019, 2018 and 2017, respectively. For the purpose of presentation in the consolidated statements of financial position, certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances in the consolidated statements of financial position for financial presentation purposes: As of December 31, 2019 2018 RMB’000 RMB’000 Deferred tax assets — — Deferred tax liabilities — — — — |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
LOSS PER SHARE | |
LOSS PER SHARE | 10. LOSS PER SHARE For the years ended December 31, 2019 2018 2017 Loss attributable to holders of ordinary shares (RMB’000): (9,501) (418,674) (88,026) Weighted average number of ordinary shares outstanding used in computing basic and diluted (loss)/earnings per share 6,075,667 4,493,036 3,339,487 Loss per share - basic (RMB) (1.56) (93.18) (26.36) Loss per share - diluted (RMB) (1.56) (93.18) (26.36) Warrants to purchase common stock are not included in the diluted loss per share calculations when their effect is antidilutive. For the year ended December 31, 2019, about 1,669,437 of potential common stock related to outstanding warrants and stock options were excluded from the calculation of diluted net loss per share as such shares are antidilutive when there is a loss. There were 728,571 and 178,571 shares for the years ended December 31, 2018 and 2017. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL | |
GOODWILL | 11. GOODWILL As of December 31, 2019 2018 RMB’000 RMB’000 Carrying amount 3,735 3,735 Accumulated impairment losses (3,735) (3,735) — — On January 8, 2010, the Company consummated the acquisition of all voting equity interests of Hengdali (which is considered to be a CGU), and the excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill. The Company performs a goodwill impairment test in year 2015 and was fully impaired at that time. At the end of the reporting period, the Company assessed the recoverable amount of goodwill, and determined that no further impairment of goodwill was required for the 2016 year-end because it was written down to zero in 2015. The impairment loss on goodwill recognized during the year ended December 31, 2015 was RMB 3,735,000. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | 12. PROPERTY, PLANT AND EQUIPMENT Plant and Motor Office Buildings machinery vehicles equipment Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Cost At January 1, 2018 349,630 746,042 4,225 1,886 1,101,783 Additions — — — — — Disposals — — — — — At December 31, 2018 349,630 746,042 4,225 1,886 1,101,783 Additions — — — — — Disposals — — — — — At December 31, 2019 349,630 746,042 4,225 1,886 1,101,783 Accumulated depreciation At January 1, 2018 48,034 339,328 3,720 1,518 392,600 Depreciation charge 1,263 10,054 28 18 11,363 At December 31, 2018 49,297 349,382 3,748 1,536 403,963 Depreciation charge — — — 11 11 At December 31, 2019 49,297 349,382 3,748 1,547 403,974 Impairment At January1, 2018 260,068 361,062 446 291 621,867 Impairment losses recognized in profit or loss 40,265 35,598 31 13 75,907 At December 31, 2018 300,333 396,660 477 304 697,774 Impairment losses recognized in profit or loss — — — — — At December 31, 2019 300,333 396,660 477 304 697,774 Carrying amount At December 31, 2018 — — — 46 46 At December 31, 2019 — — — 35 35 All property, plant and equipment held by the Company are located in the PRC. The Company’s buildings are situated on land under medium-term land use rights. For the buildings owned collectively by the Company and other three unrelated companies, the cost of buildings are stated according to the amounts paid by the Company for its part of buildings, which represent the Company’s interests in the buildings. Buildings are depreciated over their expected useful lives of 40 years. These buildings’ cost was RMB 2,913,000, and accumulated depreciation of RMB 1,226,000 and RMB 1,226,000 as of December 31, 2019 and 2018, respectively, and an impairment allocation of RMB 1,687,000 and RMB 1,687,000 as of December 31, 2019 and 2018, respectively. No property, plant and equipment was pledged to secure the Company interest-bearing bank borrowings at December 31, 2019 and 2018. At the end of the reporting period, the Company assessed the recoverable amount of property, plant and equipment, and determined that carrying amount was impaired by RMB nil (2018: RMB 75,907,000). Loss (gain) on disposal of property, plant and equipment in 2019, 2018 and 2017 was nil, nil, and RMB 70,000 gain, respectively. |
INVESTMENT PROPERTY
INVESTMENT PROPERTY | 12 Months Ended |
Dec. 31, 2019 | |
INVESTMENT PROPERTY | |
INVESTMENT PROPERTY | 13. INVESTMENT PROPERTY 2019 2018 RMB’000 RMB’000 Cost At December 31, 2019 and 2018 37,253 37,253 Accumulated depreciation As of beginning of the year (1,886) (1,750) Depreciation for the year — (136) As of end of the year (1,886) (1,886) Impairment for the year As of beginning of the year (35,367) (30,509) Impairment losses recognized in profit or loss transferred from property, plant and equipment — (4,858) As of end of the year (35,367) (35,367) Carrying amount At December 31, 2019 and 2018 — — The fair value of this investment property, which is the estimation of the depreciated replacement cost, as of December 31, 2019 was RMB 35,400,000. At the end of the reporting period, the Company assessed the recoverable amount of investment property, and determined that carrying amount was impaired by RMB nil (2018: 4,858,000). |
LAND USE RIGHTS
LAND USE RIGHTS | 12 Months Ended |
Dec. 31, 2019 | |
LAND USE RIGHTS | |
LAND USE RIGHTS | 14. LAND USE RIGHTS The Company’s land use rights are under medium-term leases in the PRC, and are analyzed for reporting purposes as follows: 2019 2018 RMB’000 RMB’000 Cost At the beginning of the year 32,619 32,619 Impact on initial application of HKFRS 16 (Note 2.6) (32,619) — At end of the year — 32,619 Accumulated amortization At beginning of the year (4,649) (4,541) Amortization — (108) Impact on initial application of HKFRS 16 (Note 2.6) 4,649 — At end of the year — (4,649) Impairment At beginning of the year (27,970) (23,714) Impairment for the year — (4,256) Impact on initial application of HKFRS 16 (Note 2.6) 27,970 — At end of the year — (27,970) Carrying amount At December 31, 2019 and 2018 — — No land use rights of the Company were pledged to the banks as securities for the Company’s interest-bearing bank borrowings at December 31, 2019 and 2018. At the end of the reporting period, the Company assessed the recoverable amount of land use right, and determined that carrying amount was impaired by RMB nil (2018: 4,256,000). The carrying amounts of land used rights were reclassified to right-of-use assets to conform to IFRS 16. |
LONG-TERM PREPAID EXPENSES
LONG-TERM PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2019 | |
LONG-TERM PREPAID EXPENSES | |
LONG-TERM PREPAID EXPENSES | 15. LONG-TERM PREPAID EXPENSES As of December 31, 2019 2018 RMB’000 RMB’000 Prepaid advertising fees — — The amount represents the advertising fees paid in advance covering periods over one year. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
INVENTORIES | 16. INVENTORIES As of December 31, 2019 2018 RMB’000 RMB’000 Raw materials 14,776 15,738 Work in progress 1,103 1,526 Finished goods 149,417 110,082 165,296 127,346 The analysis of the amount of inventories recognized as an expense and included in profit or loss is as follows: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Carrying amount of inventories sold 303,021 443,382 774,171 Write down (reversal) of inventories (included in cost of sales) (56,766) 55,973 (2,733) 246,255 499,355 771,438 |
TRADE RECEIVABLES
TRADE RECEIVABLES | 12 Months Ended |
Dec. 31, 2019 | |
TRADE RECEIVABLES | |
TRADE RECEIVABLES | 17. TRADE RECEIVABLES As of December 31, 2019 2018 RMB’000 RMB’000 Trade receivables 672,533 650,963 Less: provision for bad debt allowance (495,510) (426,849) 177,023 224,114 The Company’s trade receivables are denominated in Renminbi and non-interest bearing. In 2011, the credit period granted to distributors was generally for a period within 90 days. Since the end of 2012, the Company had extended the collection period to 150 days to address funding pressures of its distributors. Other customers were granted a credit period of 90 days in the year ended December 31, 2013, and extended to 120 days in the year ended December 2016 and 2017. As of December 31, 2019 and 2018, the Company accrued RMB 495,510,000 and RMB 426,849,000, respectively, as a provision for bad debt related to the amount of outstanding trade receivables that did not conform with the Company’s credit policy. All of the trade receivables are expected to be recovered within one year. An aging analysis of the Company’s trade receivables, based on the invoice date, is as follows: As of December 31, 2019 2018 RMB’000 RMB’000 Within 90 days 35,846 57,785 Between 3 and 6 months 72,241 69,037 More than 6 months 68,936 97,292 177,023 224,114 An aging analysis of trade receivables that were neither past due nor impaired or past due but not impaired, is as follows: Past due but not impaired Neither past due nor Less than Over 120 impaired 30 days 31 to 120 days days Sub-total Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 December 31, 2018 126,823 97,291 — — — 224,114 December 31, 2019 141,177 35,846 — — — 177,023 Receivables that were neither past due nor impaired relate to a large number of customers for whom there was no recent history of default. All amounts are short-term. The Company does not hold any collateral over these receivables. The net carrying value of trade receivables is considered a reasonable approximation of fair value. As of December 31, 2019, the Company is exposed to certain credit risks as 13% and 42% of the total trade receivables were due from the Company’s largest and the five largest customers, respectively. As of December 31, 2018, the Company is exposed to certain credit risks as 30% and 97% of the total trade receivables were due from the Company’s largest and the five largest customers, respectively. |
OTHER RECEIVABLES AND PREPAYMEN
OTHER RECEIVABLES AND PREPAYMENTS | 12 Months Ended |
Dec. 31, 2019 | |
OTHER RECEIVABLES AND PREPAYMENTS | |
OTHER RECEIVABLES AND PREPAYMENTS | 18. OTHER RECEIVABLES AND PREPAYMENTS As of December 31, 2019 2018 RMB’000 RMB’000 Prepayments for advertising and legal fee 2,036 4,673 2,036 4,673 All of the other receivables and prepayments are expected to be recovered or recognized as expense within one year. The net carrying value of these balances is considered a reasonable approximation of fair value. |
CASH AND BANK BALANCES
CASH AND BANK BALANCES | 12 Months Ended |
Dec. 31, 2019 | |
CASH AND BANK BALANCES | |
CASH AND BANK BALANCES | 19. CASH AND BANK BALANCES As of December 31, 2019 2018 RMB’000 RMB’000 Cash on hand 18 35 Cash at banks 8,194 8,981 Cash and bank balances 8,212 9,016 Cash and bank balances are denominated in the following currencies: As of December 31, 2019 2018 RMB’000 RMB’000 Renminbi 784 203 Hong Kong dollars 6 6 US dollars 7,422 8,807 8,212 9,016 Bank balances denominated in Renminbi are deposited with banks in the PRC and are not freely convertible to foreign currencies. The conversion of these RMB denominated balances into foreign currencies is subject to the foreign exchange control rules and regulations promulgated by the PRC Government. Bank balances denominated in US dollars are mainly held in bank accounts in Hong Kong and the United States of America. Cash at banks and bank deposits comprise cash held by the Company and short-term bank deposits with an original maturity of three months or less. The deposits carry interest at prevailing market rates. As of December 31, 2019, the Company has restricted cash of RMB 2,785,000 (2018: 1,719,000), of which nil (2018: nil) was used as collateral for the Company’s bank borrowings, and nil was used as collateral for the Company’s financial derivatives (2018: nil). They were temporarily not available for general use by the Company. |
TRADE PAYABLES
TRADE PAYABLES | 12 Months Ended |
Dec. 31, 2019 | |
TRADE PAYABLES | |
TRADE PAYABLES | 20. TRADE PAYABLES As of December 31, 2019 2018 RMB’000 RMB’000 Trade payables 22,577 24,329 Trade payables are denominated in Renminbi, non-interest bearing and generally settled within 120‑day terms. All of the trade payables are expected to be settled within one year. The carrying value of trade payables is considered to be a reasonable approximation of fair value. |
ACCRUED LIABILITIES AND OTHER P
ACCRUED LIABILITIES AND OTHER PAYABLES | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED LIABILITIES AND OTHER PAYABLES | |
ACCRUED LIABILITIES AND OTHER PAYABLES | 21. ACCRUED LIABILITIES AND OTHER PAYABLES As of December 31, 2019 2018 RMB’000 RMB’000 Deposits received from distributors 16,200 16,200 Accrued salary 1,208 2,331 Accrued rent, electricity and water 1,563 2,500 Accrued other taxes 1,027 1,541 Others 3,344 3,322 23,342 25,894 Accrued liabilities and other payables are denominated in the following currencies: As of December 31, 2019 2018 ’000 ’000 In Renminbi 23,342 25,894 In US dollars 35 35 Deposits received represent deposits from the Company’s distributors. The Company usually requests a deposit from RMB 400,000 to RMB 1,000,000 from new distributors upon signing a distributorship agreement as security for the performance of their obligations under the distributorship agreement. Accrued liabilities consist mainly of accrued rental, wages and utility expenses. The carrying value of accrued liabilities and other payables is considered to be a reasonable approximation of fair value. |
RIGHT-OF-USE ASSETS AND LEASES
RIGHT-OF-USE ASSETS AND LEASES LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
RIGHT-OF-USE ASSETS AND LEASES LIABILITIES | |
RIGHT-OF-USE ASSETS AND LEASES LIABILITIES | 22. RIGHT-OF-USE ASSETS AND LEASES LIABILITIES (a) Amounts recognized in the consolidated statement of financial position Except recognition of lease liabilities, the carrying amounts of right-of-use assets for lease are as below: Net book amount at January 1, 2019 RMB17,266 Net book amount at December 31, 2019 RMB5,078 (b) Amounts recognized in the consolidated income statement The consolidated income statement shows the following amounts relating to leases: Year ended December 31, 2019 Depreciation charge of right-of-use assets 12,187 Interest expense 315 The total cash outflow in financing activities for leases during the year ended December 31, 2019 was RMB 13,902,000. |
INTEREST- BEARING BANK BORROWIN
INTEREST- BEARING BANK BORROWINGS (SECURED) | 12 Months Ended |
Dec. 31, 2019 | |
INTEREST- BEARING BANK BORROWINGS (SECURED) | |
INTEREST- BEARING BANK BORROWINGS (SECURED) | 23. INTEREST- BEARING BANK BORROWINGS (SECURED) As of December 31, 2019 2018 RMB’000 RMB’000 Short-term bank borrowings - repayable within one year – shown under current liabilities — — Long-term bank borrowings - repayable more than one year but not more than 5 years - shown under non-current liabilities — — — — Bank borrowings are denominated in the following currencies: As of December 31, 2019 2018 RMB’000 RMB’000 Renminbi — — US dollars — — — — The exposure of the Company’s loans is as follows: As of December 31, 2019 2018 Effective Effective interest rates % RMB’000 interest rates % RMB’000 Fixed rate borrowings: — — Variable rate borrowings: — % — — % — — — — — All of the Company’s bank borrowings are carried at amortized cost. The carrying values of the Company’s bank borrowings approximate their fair value. The Company’s banking facilities were pledged by bank deposits, the Company’s buildings and land use rights, land use rights of third parties, and guaranteed by related parties, a subsidiary of the Company and third parties. As of December 31, 2019 and 2018, such banking facilities were utilized to the extent of nil. As of the end of the reporting periods, the Company has the following undrawn bank borrowing facilities: As of December 31, 2019 2018 RMB’000 RMB’000 Variable-rate - expiring within one year — — |
SHARE CAPITAL
SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2019 | |
SHARE CAPITAL | |
SHARE CAPITAL | 24. SHARE CAPITAL As of December 31, 2019 2018 Number US$ Number US$ of shares ‘000 of shares ‘000 Authorized: Ordinary shares of US$0.008 each At January 1 and December 31 51,000,000 400 51,000,000 400 As of December 31, 2019 2018 Number RMB Number RMB of shares ‘000 of shares ‘000 Issued: 7,306,985 397 5,678,703 306 Outstanding and fully paid: Ordinary shares of US$0.008 each At January 1 5,678,703 306 3,851,485 206 Issuance of new shares 1,200,000 67 1,770,299 97 Warrants exercised into shares 333,420 19 — — Equity compensation 94,862 5 56,919 3 At December 31 7,306,985 397 (2) 5,678,703 306 (1) (1) Equivalent to US$45,000 (2) Equivalent to US$58,000 On November 21, 2007, CHAC consummated its initial public offering, or IPO, of 12,800,000 units, including 800,000 units subject to an over-allotment option, with each unit consisting of one ordinary share, US$0.001 par value per share, and one warrant to purchase one ordinary share at an exercise price of US$7.50 per share. The units were sold at an offering price of US$10.00 per unit, generating total gross proceeds of US$128,000,000. Simultaneously with the consummation of the IPO, CHAC consummated the private sale of 2,750,000 warrants to CHAC’s founders at a price of US$1.00 per warrant, generating total proceeds of US$2,750,000. CHAC’s founders had 3,200,000 ordinary shares as founding shares. All ordinary shares are equally eligible to receive dividends and represent one vote at shareholders’ meetings of the Company. Each warrant entitled the holder to purchase shares at US$7.50 per share, subject to adjustment in the event of stock dividends and splits, reclassifications, combinations and similar events for a period commencing on the later of: (a) completion of the business combination and (b) one year from the closing date of the IPO, and ending November 16, 2012. On November 16, 2012, all of the share purchase warrants expired and ceased to trade. On November 20, 2009, pursuant to the acquisition agreement, China Ceramics acquired all of the issued and outstanding shares of Success Winner held by Mr. Wong Kung Tok in exchange for US$10.00 and 5,743,320 shares of China Ceramics. In addition, 8,185,763 shares of China Ceramics were placed in escrow (the “Contingent Shares”) and for release to Mr. Wong Kung Tok in the event certain earnings and stock price thresholds are achieved. Of the Contingent Shares, up to 5,185,763 Contingent Shares could have been released based on achieving growth in either net earnings before tax or net earnings after tax, following the completion of an annual audit. Additionally, 3,000,000 Contingent Shares could have been released if China Ceramics shares closed at or above certain share price targets for any twenty trading days within a thirty trading day period prior to April 30, 2012. The Contingent Shares were to be released without regard to continued employment and were only contingent on future earnings and the stock price of China Ceramics. On May 24, 2010, the Company issued 1,214,127 shares to Mr. Wong Kung Tok based on the audited earnings before tax result for the fiscal year 2009. On April 7, 2011, the Company issued 1,794,800 shares to Mr. Wong Kung Tok based on the audited earnings before tax result for the fiscal year 2010. On April 3, 2012, the Company issued 2,176,836 shares to Mr. Wong Kung Tok based on the audited earnings before tax result for the fiscal year 2011. No further Contingent Shares may be issued to Mr. Wong Kung Tok. The issuance of the Contingent Shares is accounted for as a stock dividend. The share price targets for the issuance of the additional 3,000,000 Contingent Shares were not met by April 30, 2012. Also, concurrent with the Success Winner Acquisition, the Company purchased an aggregate of 11,193,149 ordinary shares from the public stockholders for an aggregate purchase price of approximately RMB 752.2 million in transactions intended to assure the successful completion of the business combination. In connection with the closing of the Success Winner Acquisition, the CHAC’s founders forfeited 1,600,000 of their founders’ shares to CHAC for cancellation. On May 25, 2010, the Company purchased 996,051 public warrants from four warrant holders (all managed by a single entity) at a price of US$1.00 per warrant in a privately negotiated transaction. The total amount paid to purchase the public warrants was US$996,051 (equivalent to RMB 6,803,000) and has been deducted from shareholders’ equity. The Company initiated an exchange offer (the “Offer”) pursuant to which holders of all 14,553,949 of the Company’s outstanding warrants (the “Warrants”) had the opportunity to acquire the Company’s shares through a warrant for share exchange. The Company issued one share for every four warrants tendered. On September 1, 2010, pursuant to the terms of the tender offer, 11,779,649 warrants were exchanged for 2,944,904 shares, which are freely tradable. On November 24, 2010, the Company closed an underwritten public offering of 3,350,000 shares at a price of US$7.75 per share for gross proceed of approximately RMB 172.7 million. The total net proceeds of the offering to the Company, after deduction of underwriters’ commissions and discounts and estimated transaction expenses, were approximately RMB 159.6 million. On February 4, 2016, we announced the pricing of public offering of its shares (and common stock equivalents) with total gross proceeds of approximately $900,000 (the “Offering”). The net proceeds to the Company from this offering, before deducting the placement agent’s fees and expenses, were approximately $785,000. In connection with the Offering, the Company issued 1,428,571 shares at the price of $0.63 per share, with each share coupled with a Class A Warrant (1,428,571 Class A Warrants in the aggregate) to purchase one share and a Class B Warrant (1,428,571 Class B Warrants in the aggregate) to purchase one share. The shares, the Class A Warrants and the Class B Warrants were sold as units, but were issued separately. The Class A Warrants have an exercise price of $0.63 per share and the Class B Warrants have an exercise price of $0.78 per share. The Class A Warrants are exercisable on or after the date of issuance and will terminate on the six-month anniversary of the date of issuance. The Class B Warrants are exercisable on or after the date of issuance and will terminate on the five-year anniversary of the date of issuance. Dawson James Securities, Inc. acted as the Company’s exclusive placement agent, on a best efforts basis, in connection with the Offering. Pursuant to the terms and provisions of the Placement Agency Agreement by and between the Company and the Placement Agent, dated as of February 3, 2016 (the “PAA”), the Company paid the Placement Agent a cash placement fee equal to 8% of the gross proceeds of the Offering, or $71,999, plus a non-accountable expense allowance equal to $25,000. The Placement Agent also received five-year warrants (the “Compensation Warrants”) to purchase up to a number of shares equal to 8% of the aggregate number of shares sold in the Offering, or 114,286 shares. The Compensation Warrants have substantially the same terms as the Class B Warrants in the Offering, except that such Compensation Warrants have an exercise price of $0.78 (125% of the public offering price per share) and terminate on the five year anniversary of the effective date of this offering. Effective as of June 28, 2016, the Company implemented a reverse stock split of its ordinary shares. The new CUSIP number for the Company’s common stock following the reverse split is G2113X134. On May 23, 2016, the Company’s Board of Directors approved a one-for-eight reverse stock split intended to increase the per share trading price of the Company’s outstanding ordinary shares in order to comply with the minimum bid price requirement of $1.00 per share for continued listing on the NASDAQ Stock Market. In order to maintain the Company’s listing on the NASDAQ Capital Market, the Company’s common stock must have a closing bid price of $1.00 or more for a minimum of ten consecutive trading days by September 19, 2016. The reverse stock split reduced the number of outstanding ordinary shares of the Company from approximately 21.9 million shares to approximately 2.7 million shares and the par value per share will increase from $0.001 to $0.008. In lieu of issuing fractional shares, the Company rounded fractions of shares down to the nearest whole share. All outstanding stock options, warrants and other rights to purchase the Company’s ordinary shares was adjusted proportionately as a result of the reverse stock split. The number of total authorized ordinary shares of the Company was not changed as a result of the reverse split. The December 31, 2015 number of shares was retroactively restated to reflect the 8:1 reverse split made in June 28, 2016. On April 3, 2017, the Company, pursuant to a securities purchase agreement, between the Company and an institutional accredited investor, completed a registered offering of US$631,579 principal amount of its 5% original issue discount convertible promissory note due January 3, 2018 for the purchase price of US$600,000. At its option, the holder of the Note may convert the Note into the right to acquire shares of the Company at any time prior to the Maturity Date at the conversion price which is equal to 85% of the volume weighed average price (VWAP) per share over the five (5) trading day period prior to each conversion of the Note, subject to $1.00 per share floor price and other conversion limitations to ensure compliance with the Nasdaq Stock Exchange and other applicable laws, rules and regulations. Right after the issuance of the convertible promissory note, from April 4, 2017 through May 23, 2017, the investors converted this note into 369,626 common shares at the conversion price ranging from US$1.1828 – US$1.9355 per share. On July 18, 2017, the Company completed a private place for proceeds of US$861,595 by issuing 633,526 shares at US$1.36 per share. From August to December 2017, the Company issued aggregate of 27,394 shares to its Chief Financial Officer as stock compensation expense. The fair value of 27,394 shares was RMB 294,000. On April 19, 2018, the Company entered into a securities purchase agreement with certain individual investors relating to a registered direct offering, issuance and sale of an aggregate of 770,299 of its shares, at a purchase price of US$1.56 per share. The net proceeds to the Company from the Offering were RMB 7,952,000 (US$1.2 million). The Offering closed on April 23, 2018. Proceeds from the Offering is used for working capital and general corporate purposes. There were no discounts or brokerage fees associated with this Offering. On November 29, 2018, the Company announced and on December 4, 2018, the Company closed a public offering of its common shares (and common stock warrants) with net proceeds of RMB 7,332,000 (US$1.07 million). The gross proceeds was RMB 8,732,000 (US$1.27 million) and related commission and legal expense was RMB 1,400,000 (US$203,600). The Company intends to use the net proceeds from the offering to fund inventory, distribution expenses, vendor obligations outside of the PRC, as well as for general corporate and working capital purposes. In connection with the Offering, the Company issued 1,000,000 common shares at the price of $1.27 per share, with each common share coupled with a warrant (500,000 warrants in the aggregate) to purchase one common share. The common shares and the warrants were sold as units, but are immediately separable and will be issued separately. The warrants have an exercise price of $1.27 per share. The warrants will be exercisable on or after the date of issuance and will terminate on the five-year anniversary of the date of issuance. In January and February 2019, the investors exercised 333,420 shares of warrants. In connection with the Offering, the Company executed a Placement Agency Agreement, to pay the Placement Agent a cash placement fee equal to 8% of the gross proceeds of the Offering, plus road show, diligence, legal and other expenses of the Placement Agent of $45,000. The Placement Agent also receive five-year warrants to purchase up to 50,000 common shares, which such Compensation Warrants will have substantially the same terms as the warrants sold in the Offering, except that such Compensation Warrants will have an exercise price of $1.5875 per share or 125% of the public offering price and will terminate on the five year anniversary of the effective date of this offering. The total fair value of the warrants granted to investors and placement agent is RMB 4,955,000. The fair values of warrants granted were determined using a variation of the Black-Scholes Option Pricing Model that takes into account factors specific to the share incentive plans, such as the vesting period. The following principal assumptions were used in the valuation: Grant date December 4, 2018 Share price at date of grant US$ 1.18 Exercise price at date of grant (investors and placement agent, respectively) US$ 1.27 & US$ 1.5875 Volatility 168 % Warrant life 5 years Dividend yield 0 % Risk-free interest rate 2.63 % Fair value at grant date US$ 1.45 On December 16, 2019, the Company entered into a Securities Purchase Agreement with certain institutional investors for the sale by the Company of 1,200,000 common shares, at a purchase price of $0.75 per share. Concurrently with the sale of the Common Shares, the Company also sold warrants to purchase 1,200,000 common shares. The Company sold the Common Shares and Warrants for aggregate gross proceeds of $900,000 (the "Offering"). Subject to certain beneficial ownership limitations, the five-year Warrants will be initially exercisable on the six-month anniversary of the issuance date at an exercise price equal to $0.82 per share, subject to adjustments as provided under the terms of the Warrants, and will terminate on the five-year anniversary of the initial exercise date of the Warrants. The closing of the sales of these securities under the Purchase Agreement took place on December 18, 2019. The Company received net proceeds from the transactions of approximately $748,000, after deducting certain fees due to the placement agent and the Company's estimated transaction expenses. The net proceeds received by the Company from the transactions will be used for working capital and general corporate purposes. Pursuant to the terms and provisions of the engagement letter between the Company and the Placement Agent, the Company agreed to pay the Placement Agent a cash placement fee equal to 8% of the gross proceeds of the Offering, or $72,000, plus other expenses of the Placement Agent not to exceed $45,000. The Placement Agent also received five-year warrants to purchase up to a number of common shares equal to 5% of the aggregate number of shares sold in the Offering, including the warrant shares issuable upon exercise of the Warrants, which such Compensation Warrants have substantially the same terms as the Warrants sold in the Offering, except that such Compensation Warrants have an exercise price of $0.9375 per share and will terminate on the five year anniversary of the effective date of this offering. The total fair value of the warrants granted to investors and placement agent is RMB 5,250,000. The fair values of warrants granted were determined using a variation of the Black-Scholes Option Pricing Model that takes into account factors specific to the share incentive plans, such as the vesting period. The following principal assumptions were used in the valuation: Grant date December 18, 2019 Share price at date of grant US$ 0.68 Exercise price at date of grant (investors and placement agent, respectively) US$ 0.82 & US$ 0.9375 Volatility 141 % Warrant life 5 years Dividend yield 0 % Risk-free interest rate 1.74 % Average fair value at grant date US$ Following is a summary of the warrant activity for the years ended December 31, 2019 and 2018: Weighted Average Remaining Average Contractual Number of Exercise Term in Warrants Price Years Outstanding at January 1, 2018 192,857 $ 6.24 Exercisable at January 1, 2018 192,857 6.24 Granted 550,000 1.30 Exercised — — — Forfeited — — — Expired — — — Outstanding at December 31, 2018 742,857 2.58 Exercisable at December 31, 2018 742,857 2.58 Granted 1,260,000 0.83 Exercised (333,420) 1.30 — Forfeited — — — Expired — — — Outstanding at December 31, 2019 1,669,437 $ 1.52 Exercisable at December 31, 2019 1,669,437 $ 1.52 From January to December 31, 2018, the Company issued aggregate of 56,919 shares to its Chief Financial Officer as stock compensation expense. The fair value of 56,919 shares was RMB 619,000. From January to December 31, 2019, the Company issued aggregate of 94,862 shares to its Chief Financial Officer as stock compensation expense. The fair value of 94,862 shares was RMB 627,000. |
RESERVES
RESERVES | 12 Months Ended |
Dec. 31, 2019 | |
RESERVES | |
RESERVES | 25. RESERVES (a) Statutory reserve In accordance with the relevant laws and regulations of the PRC, the Company’s PRC subsidiaries are required to transfer 10% of its profit after taxation prepared in accordance with the accounting regulation of the PRC to the statutory reserve until the reserve balance reaches 50% of the respective registered capital. Such reserve may be used to offset accumulated losses or increase the registered capital of these subsidiaries, subject to the approval from the Board of Directors, and are not available for dividend distribution to the shareholders. (b) Currency translation reserve The reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations. (c) Merger reserve The merger reserve of the Company represents the difference between the nominal value of the shares of the subsidiaries acquired in the Hengda Reorganization (Note 1) over the nominal value of the shares of the Company issued in exchange thereof. (d) Share-based payment reserve After the successful consummation of the reverse recapitalization, Mr. Wong Kung Tok, the former sole shareholder of Success Winner, allotted a total of 1,521,528 China Ceramics’ ordinary shares to two financial advisors for their financial advisory services related to the recapitalization activities. The shared based payment reserve represents the fair value of these allotted shares measured based on the average market price over the service periods. The share-based payment reserve also represents the equity-settled share options granted to employees (Note 27). The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry or exercise of the share options. The share-based payment reserve also represents the shares issued to its senior officers as stock compensation expense. (e) Reverse recapitalization reserve The reverse recapitalization reserve arises as a result of the method of accounting for the Success Winner Acquisition. In accordance with IFRS, the acquisition has been accounted for as a reverse recapitalization. (f) Capital reverse On July 31, 2014, Sound Treasure Limited, the Company’s largest shareholder and an affiliate of the Company’s Chief Executive Officer, entered into a three party agreement (the “Novation”) with the financial institution that originated the foreign currency transaction agreements and the Company. Under the Novation, Sound Treasure Limited assumed these agreements and all assets (mainly deposits placed with the financial institution) and all existing and future liabilities arising under these agreements, and the Company was released from the liabilities arising under the foreign currency transaction agreements. As a result, after July 31, 2014, the Company is no longer required to fund any losses related to these agreements, and the Company will neither suffer any future liabilities arising under those agreements nor enjoy any benefit arising under those agreements. At the time that each of the foreign currency transaction agreements was established with the financial institution, the Company was required to deposit monies with the financial institution. RMB 6.7 million of a total of RMB 15.6 million in deposits were funded on behalf of the Company by Wong Kung Tok (who is the brother-in-law of the Company’s Chief Executive Officer) at the request of the Chief Executive Officer, and were included in a total of RMB 40.2 million in loans owed by the Company to Wong Kung Tok as of July 9, 2014. In connection with the Novation discussed above, the Company’s Chief Executive Officer, Sound Treasure Limited and Wong Kung Tok entered into an agreement with the Company (the “Offset Agreement”) pursuant to which loans totaling RMB 20.7 million owed by the Company to Wong Kung Tok as of the date of the Offset Agreement were transferred to Sound Treasure Limited and then were forgiven by Sound Treasure Limited; and in return the Company agreed to forego any claim to RMB 15.6 million in deposits under the foreign currency transaction agreements which were transferred to Sound Treasure Limited pursuant to the Novation. As a result of these transactions, Sound Treasure Limited released the Company from liabilities aggregating RMB 76.8 million and the Company transferred ownership of RMB 15.6 million in deposits held at the financial institution from the Company to Sound Treasure Limited. Except as disclosed above, neither the Company’s Chief Executive Officer nor any affiliate of the Chief Executive Officer received any remuneration for agreeing to assume the foreign currency transaction agreements. The material terms of the Novation and the Sound Treasure Agreement were reviewed and approved by the Audit Committee of the Company. As a result of the Novation and the Offset Agreement, approximately RMB 76.8 million in liabilities on the Company’s books were extinguished in 2014 and the Capital Reserve account was increased by approximately RMB 61.3 million. |
DIVIDENDS
DIVIDENDS | 12 Months Ended |
Dec. 31, 2019 | |
DIVIDENDS | |
DIVIDENDS | 26. DIVIDENDS The Company paid a cash dividend of US$0.10 (equivalent to RMB 0.61) per share each on July 13, 2013 and January 14, 2014, respectively, to its shareholders which totaled in aggregate US$4.1 million (equivalent to RMB 24.9 million gross, RMB 23.66 million net of 5% PRC withholding tax (Note 9)). The Company paid a cash dividend of US$0.0125 (equivalent to RMB 0.08) per share each on July 14, 2014 and January 14, 2015, respectively, to its shareholders which totaled in aggregate US$0.5 million (equivalent to RMB 3.2 million gross, RMB 3.01 million net of 5% PRC withholding tax (Note 9)). |
SHARE-BASED EMPLOYEE REMUNERATI
SHARE-BASED EMPLOYEE REMUNERATION | 12 Months Ended |
Dec. 31, 2019 | |
SHARE-BASED EMPLOYEE REMUNERATION | |
SHARE-BASED EMPLOYEE REMUNERATION | 27. SHARE-BASED EMPLOYEE REMUNERATION (a) Employee share scheme The Board of Directors duly adopted and approved the 2017 Equity Compensation Plan (“the 2017 Plan”) on May 21, 2017. The purpose of the 2017 Plan was to attract and retain outstanding individuals as Employees, Directors and Consultants of the Company and its Subsidiaries, to recognize the contributions made to the Company and its Subsidiaries by Employees, Directors and Consultants, and to provide such Employees, Directors and Consultants with additional incentive to expand and improve the profits and achieve the objectives of the Company and its Subsidiaries, by providing such Employees, Directors and Consultants with the opportunity to acquire or increase their proprietary interest in the Company through receipt of Awards. The Board, in its sole discretion, shall determine the Employees, Consultants and Directors to whom, and the time or times at which Awards will be granted, the form and amount of each Award, the expiration date of each Award, the time or times within which the Awards may be exercised, the cancellation of the Awards and the other limitations, restrictions, terms and conditions applicable to the grant of the Awards. To the extent permitted by applicable law, regulation, and rules of a stock exchange on which the Ordinary Shares are listed or traded, the Board may delegate its authority to grant Awards to Employees or Consultants and to determine the terms and conditions thereof to its standing committee, e.g., Compensation Committee, as it may determine in its discretion, on such terms and conditions as it may impose. The total number of shares that may be issued under the 2017 Plan was 280,000. Such shares may be either be authorized but unissued shares or treasury shares. In the event of any reorganization, recapitalization, share split, distribution, merger, consolidation, split-up, spin-off, combination, subdivision, consolidation or exchange of shares, any change in the capital structure of the Company or any similar corporate transaction, the Board shall make such adjustments as it deems appropriate, in its sole discretion, to preserve the benefits or intended benefits of the 2017 Plan and Awards granted under the 2017 Plan. The number of shares issued to Employees, Directors and Consultants is the offer amount divided by the Fair Market Value, meaning (i) if the principal trading market for the Ordinary Shares is the NASDAQ Capital Market or another national securities exchange, the “closing transaction” price at which shares of Ordinary Shares are traded on such securities exchange on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported, (ii) if the Ordinary Shares is not principally traded on a national securities exchange, but is quoted on the NASD OTC Bulletin Board (“OTCBB”) or the Pink Sheets, the last reported “closing transaction” price of Ordinary Shares on the relevant date, as reported by the OTCBB or Pink Sheets, or, if not so reported, as reported in a customary financial reporting service, as the Committee determines, or (iii) if the Ordinary Shares is not publicly traded or, if publicly traded, is not subject to reported closing transaction prices as set forth above, the Fair Market Value per share shall be as determined by the Board. From August to December 2017, the Company issued aggregate of 27,394 shares to its Chief Financial Officer as stock compensation expense. From January to December 31, 2018, the Company issued aggregate of 56,919 shares to its Chief Financial Officer as stock compensation expense. From January to December 31, 2019, the Company issued aggregate of 94,862 shares to its Chief Financial Officer as stock compensation expense. For the years ended December 31, 2019, 2018 and 2017, employee remuneration expense (all of which related to equity-settled share-based payment transactions) of RMB 627,000, RMB 619,000 and RMB 294,000, respectively, has been included in profit or loss and credited to the share-based payment reserve. |
SIGNIFICANT RELATED PARTY TRANS
SIGNIFICANT RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT RELATED PARTY TRANSACTIONS | |
SIGNIFICANT RELATED PARTY TRANSACTIONS | 28. SIGNIFICANT RELATED PARTY TRANSACTIONS (a) Apart from those discussed elsewhere in these financial statements, the following are significant related party transactions entered into between the Company and its related parties at agreed rates: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Service fees paid to Stuart Management Co. — 40 81 2019 2018 RMB’000 RMB’000 Amounts owed to related parties 36,217 36,203 Service fees accrued to Stuart Management Co. — — 36,217 36,203 Pursuant to an administrative services agreement dated as of December 1, 2009 between the Company and Stuart Management Co., an affiliate of Paul K. Kelly, an ex-director who resigned on Nov 27, 2013, the Company paid US$6,000 (equivalent to RMB 40,000) and US$12,000 (equivalent to RMB 81,000) during the years ended December 31, 2018 and 2017 plus out-of-pocket expenses to Stuart Management Co. for administrative services. The initial one-year term began on December 1, 2009, and the agreement automatically renews for successive one-year terms unless either party notifies the other of its intent not to renew. During the term of the agreement, Stuart Management Co. provided the Company with general administrative services, including acting as the Company’s administrative agent in the United States and the British Virgin Islands, and allow the Company to utilize certain of its office space for meetings. The agreement was renewed to reduce the amount to US$4,900 (equivalent to RMB 30,000) a month in December 2013. The amount was further reduced to US$1,000 (equivalent to RMB 6,000) a month commencing October 2014. The Company terminated service with Stuart Management starting from July 1, 2018. Mr. Huang Jia Dong, the founder and Chairman of Hengda and the Chief Executive Officer and one of the directors of the Company and Mr. Wong Kung Tok, formerly one of the Company’s significant shareholders, provide working capital loans to the Company from time to time during the normal course of its business. These loans amounted to RMB 35,057,000 and RMB 35,057,000 as of December 31, 2019 and 2018, respectively. These loans are interest free, unsecured and repayable on demand. Mr. Huang and Mr. Wong are brothers-in-law. Mr. Huang and Mr. Wong are brothers-in-law. As of December 31, 2019, the Company had a loan of US$167,000 (equivalent to RMB 1,160,000) (2018: US$167,000 (equivalent to RMB 1,146,000)) payable to Sound Treasure Limited, an affiliate of Mr. Huang Jia Dong and a shareholder of the Company. This loan is interest free, unsecured and repayable on demand. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS | |
COMMITMENTS | 29 . COMMITMENTS (a) Operating lease commitments The Company leases production factories, warehouses and employees’ hostel from unrelated parties under non-cancellable operating lease arrangements. The leases have varying terms and the total future minimum lease payments of the Company under non-cancellable operating leases are payable as follows: As of December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Within one year 5,792 13,902 13,902 After one year and within five years — 5,792 19,694 5,792 19,694 33,596 The leases typically run for an initial period of three to five years, with an option to renew the lease when all terms are renegotiated. Lease payments are usually increased every five years to reflect market rentals. None of the leases includes contingent rentals. (b) Capital commitments The Company’s capital expenditures consist of expenditures on property, plant and equipment and capital contribution. Capital expenditures contracted for at the balance sheet date but not recognized in the financial statements are as follows: As of December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Contracted for capital commitment in respect of capital contribution to its wholly foreign owned subsidiary in the PRC: Chengdu Future 30,000,000 — — Contracted but not provided for in the financial statements – acquisition of property, plant and equipment — — — (c) Other commitments The Company had the following other commitments: Year ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Advertising expenditure contracted but not provided for in the financial statements — — 1,670 |
FINANCIAL RISK MANAGEMENT
FINANCIAL RISK MANAGEMENT | 12 Months Ended |
Dec. 31, 2019 | |
FINANCIAL RISK MANAGEMENT | |
FINANCIAL RISK MANAGEMENT | 30. FINANCIAL RISK MANAGEMENT The Company’s overall financial risk management program seeks to minimize potential adverse effects of financial performance of the Company. Management has in place processes and procedures to monitor the Company’s risk exposures while balancing the costs associated with such monitoring and management against the costs of risk occurrence. The Company’s risk management policies are reviewed periodically for changes in market conditions and the Company’s operations. The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks included credit risk, liquidity risk, interest rate risk, foreign currency risk and market price risk. Except as disclosed in (d), the Company does not hold or issue derivative financial instruments for trading purposes or to hedge against fluctuations, if any, in interest rates and foreign exchange rates. (a) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company’s exposure to credit risk arises primarily from bank balances and trade receivables. For trade receivables, the Company adopts the policy of dealing only with customers of appropriate credit history to mitigate credit risk. For other financial assets, the Company adopts the policy of dealing only with high credit quality counterparties. As the Company does not hold any collateral, the maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial assets presented on the consolidated statements of financial position. Cash and bank balances The Company’s bank deposits are placed with reputable banks in the PRC, Hong Kong and the United States, which management believes are of high credit quality. The Company performs periodic evaluations of the relative credit standing of these financial institutions. Trade receivables The Company’s objective is to seek continual growth while minimizing losses incurred due to increased credit risk exposure. The Company’s exposure to credit risks is influenced mainly by the individual characteristics of each customer. The Company typically gives the existing customers credit terms of approximately 120 days to 150 days. In deciding whether credit shall be extended, the Company will take into consideration factors such as the relationship with the customer, its payment history and credit worthiness. In relation to new customers, the sales and marketing department will prepare credit proposals for approval by the Chief Executive Officer. The Company performs ongoing credit evaluations of its customers’ financial condition and requires no collateral from its customers. The provision for impairment loss for doubtful debts is based upon a review of the expected collectability of all trade and other receivables. The Company’s concentration of credit risk by geographical location is wholly in the PRC as of December 31, 2018 and 2017. Further details of the Company’s concentration of credit risk are set out in Note 17. (b) Liquidity risk The Company’s policy is to regularly monitor current and expected liquidity requirements and its compliance with loan covenants to ensure that it maintains a sufficient amount of cash and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer term. The following table details the Company’s remaining contractual maturities for its financial liabilities. The table has been drawn up based on undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The table includes both interest and principal cash flows. To the extent that interest flows are at a floating rate, the undiscounted amount is calculated based on interest rate at the end of the reporting periods: As of December 31, 2019 More than 1 Total contractual year but less undiscounted Carrying Within 1 year than 3 years cash flow amount RMB’000 RMB’000 RMB’000 RMB’000 Trade payables 22,577 — 22,577 22,577 Amounts owed to related parties 36,217 36,217 36,217 Interest-bearing bank borrowings — — — — Total 58,794 — 58,794 58,794 As of December 31, 2018 More than 1 Total contractual year but less undiscounted Carrying Within 1 year than 3 years cash flow amount RMB’000 RMB’000 RMB’000 RMB’000 Trade payables 24,329 — 24,329 24,329 Amounts owed to related parties 36,203 36,203 36,023 Interest-bearing bank borrowings — — — — Total 60,532 — 60,532 60,532 (c) Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market interest rates. The Company’s exposure to interest rate risk arises primarily from the Company’s interest-bearing bank deposits and borrowings. The interest rates and terms of repayment of the bank borrowings are disclosed in Note 23. The Company is exposed to fair value interest rate risk in relation to its fixed-rate bank borrowings. Bank borrowings subject to fixed interest rates are contractually repriced at intervals of 12 months. The Company currently does not have an interest rate hedging policy. However, the management monitors interest rate exposure and will consider other necessary actions when significant interest rate exposure is anticipated. The Company is also exposed to cash flow interest rate risk related to bank balances and cash held at financial institutions carried at the prevailing market rates and variable-rate bank borrowings. At December 31, 2019 and 2018, the company has paid off all its loan. Thus was no variable-rate risk. (d) Foreign currency risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. Currency risk arises when transactions are denominated in foreign currencies. The Company is mainly exposed to foreign exchange risk arising from future commercial transactions, recognized assets and liabilities denominated in currencies other than the functional currency of the Company entities to which they relate. The Company’s operations are primarily conducted in the PRC. All the sales and purchases transactions are denominated in RMB. As such, the operations are not exposed to exchange rate fluctuation. As of December 31, 2019 and 2018, nearly all of the Company’s monetary assets and monetary liabilities were denominated in RMB except that as of December 31, 2019 and 2018, certain bank balances (Note 19), bank borrowings (Note 23) and other payables (Note 21) were denominated in US dollars. Sensitivity analysis The Company’s foreign currency risk is mainly concentrated on the fluctuation of US$ and HK$. The following table details the Company’s sensitivity to a 4% increase and decrease in RMB against the relevant foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the years end for a 4% change. On this basis, if RMB strengthens against foreign currencies by 4%, the Company’s loss before taxation for the year would decrease by the following amount, and vice versa. As of December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Loss before taxation 414 353 86 The sensitivity analysis has been determined assuming that the change in foreign exchange rates had occurred at the end of the reporting period and had been applied to re-measure those financial instruments held by the Company which expose the Company to foreign currency risk at the end of the reporting period. The stated changes represent management’s assessment of reasonably possible changes in foreign exchange rates over the period until the end of next annual reporting period. The analysis is performed on the same basis for 2019, 2018 and 2017. In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure at the end of the reporting period does not reflect the exposure during the year. (e) Fair value measurements (i) Financial instruments carried at fair value Fair value hierarchy The following table presents the fair value of the Company’s financial instruments measured at the end of the reporting period on a recurring basis, categorized into the three-level fair value hierarchy as defined in IFRS 13 Fair value measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows: · Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. · Level 2: inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) · Level 3: inputs for the assets or liability that are not based on observable market data (that is, unobservable inputs). The Company’s directors are responsible to determine the appropriate valuation techniques and inputs for fair value measurements. There were no transfers between instrument levels during the years ended December 31, 2019 and 2018. As of December 31, 2019 and 2018 there were no other financial instruments measured on a recurring basis. (i) Financial assets and liabilities measured at other than fair value The carrying amounts of the Company’s other financial instruments carried at cost or amortized cost approximate their fair values as of December 31, 2019 and 2018. |
CAPITAL MANAGEMENT
CAPITAL MANAGEMENT | 12 Months Ended |
Dec. 31, 2019 | |
CAPITAL MANAGEMENT | |
CAPITAL MANAGEMENT | 31. CAPITAL MANAGEMENT The Company’s objectives when managing capital are: (i) To safeguard the Company’s ability to continue as a going concern and to be able to service its debts when they are due; (ii) To maintain an optimal capital structure so as to maximize shareholder value; and (iii) To maintain a strong credit rating and healthy capital ratios in order to support the Company’s stability and growth. The Company actively and regularly reviews and manages its capital structure to ensure optimal shareholder returns, taking into consideration the future capital requirements of the Company and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. The Company manages its common shares and stock options as capital. The Company is not subject to externally imposed capital requirements, except for, as disclosed in Note 25(a), the Company’s PRC subsidiaries are required by the Foreign Enterprise Law of the PRC to contribute to and maintain a non-distributable statutory reserve fund whose utilization is subject to approval by the Board of Directors. This externally imposed capital requirement has been complied with by the PRC subsidiaries for the years ended December 31, 2019, 2018 and 2017. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, increase share capital, obtain new borrowings or sell assets to reduce debt. There were no changes in the Company’s overall approach to capital management during the report periods. The capital structure of the Company consists of debts (which include borrowings, less cash and cash equivalents) and equity attributable to shareholders of the Company (comprising issued capital and reserves). The Company monitors capital on the basis of the debt to capital ratio, which is calculated as net debts divided by equity attributable to shareholders of the Company. As of December 31, 2019 2018 RMB’000 RMB’000 Interest-bearing bank borrowings — — Amounts owed to related parties 36,217 36,203 Total debts 36,217 36,203 Less: Cash and cash equivalents (excluding restricted bank balances) (8,212) (9,016) Net debts 28,005 27,187 Equity attributable to shareholders of the Company 272,496 275,712 Gearing ratio 10.3 % 9.9 % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 32. SUBSEQUENT EVENTS The Company has evaluated all events that have occurred subsequent to December 31, 2019 through the date that the consolidated financial statements were issued. Management has concluded that the following subsequent events required disclosure in these financial statements: On January 8, 2020, the "Company executed subscription agreements in connection with a $500,000 private placement of its ordinary shares with three accredited investors at the price of $0.75 per share. The Company agreed to register the shares sold in the Offering for resale no later than 270 days after the closing of the Offering. There were no discounts or brokerage fees associated with this Offering. The net proceeds of the Offering will be used for working capital and general corporate purposes. Beginning in late 2019, there have been reports of the COVID-19 (coronavirus) outbreak originating in China, prompting government-imposed quarantines, closures of certain travel and businesses. Following this outbreak, in February 2020, the Company temporarily shut down its operations in Jinjiang City, Fujian Province, and Gao’An City, Jiangxi Province, as mandated by the local authorities. In March 2020, the Company gradually resumed its operations in these cities and continues to operate such production facilities. It is presently unknown whether and to what extent the Company’s supply chains may be affected if the pandemic persists for an extended period of time. The Company may incur significant delays or expenses relating to such events outside of its control, which could have a material adverse impact on its business, operating results and financial condition. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of preparation | 2.1 Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Standards Board (“IASB”), which collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the IASB. The significant accounting policies that have been used in the preparation of these consolidated financial statements are summarized below. These policies have been consistently applied to all the years presented unless otherwise stated. The adoption of new or amended IFRSs and the impacts on the Company’s financial statements, if any, are disclosed in Note 3. The consolidated financial statements have been prepared on the historical cost basis, except for derivative financial instruments that have been measured at fair value. The preparation of financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgments made by management in the application of IFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 4. The consolidated financial statements were approved and authorized for issue by the Board of Directors on May 20, 2020. |
Basis of consolidation | 2.2 Basis of consolidation The Success Winner Acquisition on November 22, 2009 has been accounted for as a reverse recapitalization. The acquisition agreement resulted in the former owner of Success Winner obtaining effective operating and financial control of the combined entity. Prior to the acquisition, China Ceramics had no operating business. Accordingly, the acquisition does not constitute a business combination for accounting purposes and is accounted for as a capital transaction. That is, the transaction is in substance a reverse recapitalization, equivalent to the issuance of equity interests by Success Winner for the net monetary assets of China Ceramics accompanied by a recapitalization. The consolidated financial statements are a continuation of the financial statements of Success Winner. The assets and liabilities of China Ceramics are recognized at their carrying amounts at the date of acquisition with a corresponding credit to the consolidated equity and no goodwill or other intangible assets are recognized. The equity of the combined entity recognized at the date of acquisition represents the equity balances of Success Winner together with the deemed proceeds from the reverse recapitalization determined as described above. However, the equity structure presented in the consolidated financial statements (number and values of equity instruments issued) reflects the equity structure of the legal parent, China Ceramics. Costs directly attributable to the transaction have been debited to equity to the extent of net monetary assets received. Success Winner and its subsidiaries as a group is regarded as a continuing entity resulting from the Hengda Reorganization since the management of all the entities which took part in the Reorganization were controlled by the same director and shareholder before and immediately after the Reorganization. Immediately after the Reorganization, there was a continuation of the control over the entities’ financial and operating policy decision and risk and benefits to the ultimate shareholders that existed prior to the Reorganization. Accordingly, the reorganization has been accounted for as a reorganization under common control and the financial statements of Success Winner, Stand Best and Hengda have been combined on the basis of merger accounting for all periods presented. The assets and liabilities of the combining entities or businesses are combined using the existing book values from the controlling party’s perspective. No amount is recognized as consideration for goodwill or excess of the acquirer’s interest in the net fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of the common control combination. The consolidated statement of comprehensive income includes the results of each of the combining entities or businesses from the earliest date presented or the date of their incorporation/establishment or since the date when the combining entities or businesses first came under common control, where this is a shorter period, regardless of the date of the common control combination. The Hengdali Acquisition on January 8, 2010 has been accounted for as a business combination using the acquisition method. Hengdali is a subsidiary of the Company, and the Company has the power to govern the financial and operating policies which accompanies its shareholding of 100% of the voting rights in Hengdali. Therefore, Hengdali as a subsidiary is fully consolidated from January 8, 2010, the date on which control was transferred to the Company. The accounting for the Hengdali Acquisition under the acquisition method, treats the consideration transferred for the acquisition of Hengdali as the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Company. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in this business combination are measured initially at their fair values at the acquisition date. The excess of the consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill. The Company’s financial statements consolidate those of the Company and all of its subsidiaries as of December 31, 2019. Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether the Company has power, only substantive rights (held by the Company and other parties) are considered. All subsidiaries have a reporting date of December 31. An investment in a subsidiary is consolidated into the consolidated financial statements form the date that control commences until the date that control ceases. Inter-company transactions, balances and unrealized gains or losses on transactions between group companies are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company. |
Foreign currency translation | 2.3 Foreign currency translation The financial statements are presented in RMB (to the nearest thousand), being the currency that best reflects the economic substance of the underlying events and circumstances relevant to the Company. The Company’s operations are conducted through the subsidiaries in the People’s Republic of China (“PRC”). The functional currency of these subsidiaries is Renminbi (“RMB”). The functional currency of China Ceramics is the United State dollars (US$). In the individual financial statements of the consolidated entities, foreign currency transactions are translated into the functional currency of the individual entity using the exchange rates prevailing at the dates of the transactions. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated at the foreign exchange rates ruling at that date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the reporting date retranslation of monetary assets and liabilities are recognized in profit or loss. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined and are reported as part of the fair value gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. In the consolidated financial statements, all individual financial statements of foreign operations, originally presented in a currency different from the Company’s presentation currency, have been converted into Renminbi. Assets and liabilities have been translated into Renminbi at the closing rates at the reporting date. Income and expenses have been converted into Renminbi at the exchange rates ruling at the transaction dates, or at the average rates over the reporting period provided that the exchange rates do not fluctuate significantly. Any differences arising from this procedure have been recognized in other comprehensive income and accumulated separately in the currency translation reserve in equity. When a foreign operation is sold, such exchange differences are reclassified from equity to profit or loss as part of the gain or loss on sale. The translation of certain RMB amounts as of and for the year ended December 31, 2019 into US$ is included in these financial statements solely for the convenience of readers and was made at the rate of RMB 6.96 to US$1.00, which was based on the noon buying rate on December 31, 2019 in the City of New York cable transfers of RMB as certified for customers purposes by the Federal Reserve Bank of New York. Such translation should be construed as representation that RMB amounts could be converted, realized or settled into US$ at the rate stated above or at any other rate. |
Property, plant and equipment | 2.4 Property, plant and equipment Leasehold land and buildings for own use When a lease includes both land and building elements, the Company assesses the classification of each element as a finance or an operating lease separately based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the Company, unless it is clear that both elements are operating leases in which case the entire lease is classified as an operating lease. Specifically, the minimum lease payments (including any lump sum upfront payments) are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of the lease. To the extent the allocation of the lease payments can be made reliably, interest in leasehold land that is accounted for as an operating lease is presented as "land use rights" in the consolidated statements of financial position and is amortized over the lease term on a straight-line basis. All buildings are depreciated over their expected useful lives of 40 years. Other property, plant and equipment Property, plant and equipment are stated in the consolidated statements of financial position at cost less any accumulated depreciation and any accumulated impairment losses. Depreciation is provided to write off the cost less their residual values over their estimated useful lives as follows, using the straight-line method: Plant and machinery 10 years Motor vehicles 10 years Office equipment 5 years The assets’ residual values, depreciation methods and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other costs, such as repairs and maintenance, are charged to profit or loss during the financial period in which they are incurred. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The gain or loss arising on retirement or disposal is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. |
Investment property | 2.5 Investment property Investment properties are properties held to earn rentals or for capital appreciation. Investment properties are initially measured at historical cost, including any directly attributable expenditure. Subsequent to initial recognition, investment properties are measured at their historical cost less any accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other costs, such as repairs and maintenance, are charged to profit or loss during the financial period in which they are incurred. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. The gain or loss arising on retirement or disposal is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use or no future economic benefits are expected from its disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the item is derecognized. |
Land use rights | 2.6 Land use rights Upfront payments made to acquire land held under an operating lease are stated at cost less accumulated amortization and any accumulated impairment losses. Amortization is calculated on a straight line basis over the leasing period of 50 years. The carrying amounts of land used rights were reclassified to right-of-use assets to conform to IFRS 16. |
Goodwill | 2.7 Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to each of the Company’s cash-generating units, or groups of cash-generating units, that is expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently whenever there is indication that the unit may be impaired. If some or all of the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than the carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro – rata basis based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods. On disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. |
Inventories | 2.8 Inventories Inventories are carried at the lower of cost and net realizable value. Cost is determined using the weighted average basis, and in the case of work in progress and finished goods, comprises direct materials, direct labor and an appropriate proportion of overhead. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and applicable selling expenses. When inventories are sold, the carrying amount of those inventories is recognized as an expense in the period in which the related revenue is recognized. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories is recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs. |
Cash and cash equivalents | 2.9 Cash and cash equivalents Cash and cash equivalents include cash at bank and in hand, demand deposits with banks and short term highly liquid investments with original maturities of three months or less that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows presentation, cash and cash equivalents include bank overdrafts which are repayable on demand and form an integral part of the Company’s cash management. |
Financial instruments | 2.10 Financial instruments Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value except for trade debtors arising from contracts with customers which are initially measured in accordance with HKFRS 15 since 1 January 2019. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets or liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. The effective interest method is a method of calculating the amortized cost of a financial asset or financial liability and of allocating interest income and interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset or financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Interest income which are derived from the Company’s ordinary course of business are presented as revenue. Financial assets Classification and subsequent measurement of financial assets (upon application of IFRS 9) Financial assets that meet the following conditions are subsequently measured at amortized cost: · the financial asset is held within a business model whose objective is to collect contractual cash flows; and · the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. All other financial assets are subsequently measured at fair value through profit or loss (“FVTPL”). A financial asset is classified as held for trading if: · it has been acquired principally for the purpose of selling in the near term; or · on initial recognition it is a part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or · it is a derivative that is not designated and effective as a hedging instrument. In addition, the Company may irrevocably designate a financial asset that are required to be measured at the amortized cost as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch. (i) Amortized cost and interest income Interest income is recognized using the effective interest method for financial assets measured subsequently at amortized cost. Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit-impaired. For financial assets that have subsequently become credit-impaired, interest income is recognized by applying the effective interest rate to the amortized cost of the financial asset from the next reporting period. If the credit risk on the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest income is recognized by applying the effective interest rate to the gross carrying amount of the financial asset from the beginning of the reporting period following the determination that the asset is no longer credit impaired. (ii) Financial assets at FVTPL Financial assets that do not meet the criteria for being measured at amortized cost are measured at FVTPL. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognized in profit or loss. The net gain or loss recognized in profit or loss includes any dividend or interest earned on the financial asset and is included in the “other gains and losses” line item. Impairment of financial assets (upon application IFRS 9) The Company recognizes a loss allowance for expected credit loss (“ECL”) on financial assets which are subject to impairment under IFRS 9 (including trade and other receivables, bank deposits and bank balances). ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition. General approach ECLs are recognized in two measurement bases. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12‑months (a 12‑month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). At each reporting date, the Company assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward looking information. The Company considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. Financial assets at amortized cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below. Stage 1 — Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12‑month ECLs Stage 2 — Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs Stage 3 — Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs Simplified approach For trade receivables that do not contain a significant financing component or when the Company applies the practical expedient of not adjusting the effect of a significant financing component, the Company applies the simplified approach in calculating ECLs. Under the simplified approach, the Company does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Company assesses at the end of each reporting period whether there is any objective evidence that a financial asset or a group of financial assets is impaired. An impairment exists if one or more events that occurred after the initial recognition of the asset have an impact on the estimated future cash flows of the financial asset or the Company of financial assets that can be reliably estimated. Evidence of impairment may include indications that a debtor or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and observable data indicating that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults. Financial assets carried at amortized cost For financial assets carried at amortized cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a collective assessment of impairment. The amount of any impairment loss identified is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate (i.e., the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account and the loss is recognized in profit or loss. Interest income continues to be accrued on the reduced carrying amount using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. Loans and receivables together with any associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent period, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognized, the previously recognized impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to other expenses in the statement of profit or loss. Classification and subsequent measurement of financial assets (before application of IFRS 9 on January 1, 2018) The Company’s financial assets are loans and receivables. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially recognized at fair value. Subsequent to initial recognition, loans and receivables (including trade and other receivables, pledged bank deposits, fixed bank deposits with maturity periods over three months and bank balances) are measured at amortized cost using the effective interest method, less any identified impairment losses). Impairment of financial assets Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial assets have been affected. Objective evidence of impairment could include: · significant financial difficulty of the issuer or counterparty; or · breach of contract, such as a default or delinquency in interest or principal payments; or · it becoming probable that the borrower will enter bankruptcy or financial re-organisation; or disappearance of an active market for that financial asset because of financial difficulties. If any such evidence exists, the impairment loss on trade receivables and other current receivables and other financial assets carried at amortized cost is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition of these assets), where the effect of discounting is material. This assessment is made collectively where these financial assets share similar risk characteristics, such as similar past due status, and have not been individually assessed as impaired. Future cash flows for financial assets which are assessed for impairment collectively are based on historical loss experience for assets with credit risk characteristics similar to the collective group. If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the impairment loss was recognized, the impairment loss is reversed through profit or loss. A reversal of an impairment loss shall not result in the asset’s carrying amount exceeding that which would have been determined had no impairment loss been recognized in prior years. Impairment losses are written off against the corresponding assets directly, except for impairment losses recognized in respect of trade receivables included within trade and other receivables and prepayments, whose recovery is considered doubtful but not remote. In this case, the impairment losses for doubtful debts are recorded using an allowance account. When the Company is satisfied that recovery is remote, the amount considered irrecoverable is written off against trade debtors directly and any amounts held in the allowance account relating to that debt are reversed. Subsequent recoveries of amounts previously charged to the allowance account are reversed against the allowance account. Other changes in the allowance account and subsequent recoveries of amounts previously written off directly are recognized in profit or loss. Derecognition of financial assets The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and recognizes a collateralized borrowing for the proceeds received. On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. Financial liabilities and equity instruments Debt and equity instruments issued by a group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs. Effective interest method The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Interest expense is recognized on an effective interest basis. Financial liabilities Interest-bearing borrowings are recognized initially at fair value less attributable transaction costs. They are subsequently stated at amortized cost with any difference between the amount initially recognized and redemption value being recognized in profit or loss over the period of the borrowings, together with any interest and fees payable, using the effective interest method. Trade and other payables are initially recognized at fair value. They are subsequently stated at amortized cost unless the effect of discounting would be immaterial, in which case they are stated at cost. Derecognition The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire. On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss. The Company derecognizes a financial liability when, and only when, the Company’s obligations are discharged, cancelled or expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss. |
Derivative financial instruments | 2.11 Derivative financial instruments Initial recognition and subsequent measurement The Company uses derivative financial instruments, such as forward currency contracts, for investment purposes. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss. |
Leases | 2.12 Leases Finance leases refers to the situation that the economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards of ownership of the leased asset. All other leases are treated as operating leases. Where the Company has the use of assets under operating leases, payments made under the leases are charged to profit or loss on a straight line basis over the lease terms except where an alternative basis is more representative of the time pattern of benefits to be derived from the leased assets. Lease incentives received are recognized in profit or loss as an integral part of the aggregate net lease payments made. Contingent rental are charged to profit or loss in the accounting period in which they are incurred. Operating leases were treated in accordance to IFRS 16 commencing January 1, 2019. All the leases of the Company are operating leases for the years ended December 31, 2019, 2018 and 2017. |
Provisions and contingencies | 2.13 Provisions and contingencies Provisions for product warranties, legal disputes, onerous contracts or other claims are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the time value of money is material, provisions are stated at the present value of the expenditure expected to settle the obligation. All provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Company are also disclosed as contingent liabilities unless the probability of outflow of economic benefits is remote. |
Share capital | 2.14 Share capital Ordinary shares are classified as equity. Share capital is determined using the nominal value of shares that have been issued. Any transaction costs associated with the issuing of shares are deducted from share premium (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction. |
Revenue recognition | 2.15 Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods, net of rebates and discounts. In 2012, the Company paid rebates to some distributors on their annual cash collections. No such rebates were paid to distributors since year 2013. Provided it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably, revenue is recognized as follows: Sales of goods are recognized upon transfer of the significant risks and rewards of ownership to the customer. This is usually taken as the time when the goods are delivered and the customer has accepted the goods. Once goods are accepted by a customer, there is no continuing management involvement with the goods and the Company does not have the obligation to accept the return of the goods to the Company from the customer. Rental income is recognized based upon our annual rental over the life of the lease under operating lease, using the straight-line method. Interest income is recognized on a time-proportion basis using the effective interest method. |
Impairment of non-financial assets | 2.16 Impairment of non-financial assets Impairment testing is made on the Company’s goodwill at each reporting date. Property, plant and equipment and land use rights are tested for impairment if there is any indication that the assets may be impaired at the balance sheet date. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. Calculation of recoverable amount An asset’s recoverable amount is the greater of an asset’s or cash-generating unit’s fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are 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. Where an asset does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the smallest group of assets that generates cash inflows independently (i.e. a cash-generating unit). Recognition of impairment losses An impairment loss is recognized in profit or loss whenever the carrying amount of an asset, or the cash-generating unit to which it belongs, exceeds its recoverable amount. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to that cash-generating unit (or group of units), and then, to reduce on a pro rata basis the carrying amount of the other assets in the unit (or group of units), except that the carrying amount of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable). Reversal of impairment losses In respect of assets other than goodwill, an impairment loss is reversed if there has been a favorable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is not reversed. A reversal of an impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized. |
Employee benefits | 2.17 Employee benefits Retirement benefits The employees of the Company’s PRC subsidiaries are required to participate in a central pension scheme operated by the local municipal government. Contributions are recognized as an expense in profit or loss as employees render services during the year. The Company’s obligation under these plans is limited to the fixed percentage contributions payable. Share-based employee remuneration The Company operates equity-settled share-based remuneration plans for its employees. None of the Company’s plans feature any options for a cash settlement. The fair value of share options granted to employees is recognized as an employee cost with a corresponding increase in the share-based payment reserve within equity. The fair value is measured at the grant date using the Black Scholes Option Pricing Model, taking into account the terms and conditions upon which the options were granted. Where the employees have to meet vesting conditions before becoming unconditionally entitled to the share options, the total estimated fair value of the share options is spread over the vesting period, taking into account the probability that the options will vest. During the vesting period, the number of share options expected to vest is reviewed. Any resulting adjustment to the cumulative fair value recognized in prior years is charged/credited to the profit or loss for the year under review, unless the original employee expenses qualify for recognition as an asset, with a corresponding adjustment to the share-based payment reserve. On the vesting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that vest (with a corresponding adjustment to the share-based payment reserve) except where forfeiture is only due to not achieving vesting conditions that relate to the market price of the Company’s shares. The equity amount is recognized in the share-based payment reserve until either the option is exercised (when it is transferred to the share premium account) or the option expires (when it is released directly to retained earnings). |
Borrowing costs | 2.18 Borrowing costs Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of qualifying asset which necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of that asset until such time as the assets are substantially ready for their intended use or sale. Other borrowing costs are expensed when incurred. |
Accounting for income taxes | 2.19 Accounting for income taxes Income tax comprises current tax and deferred tax. Current tax and movements in deferred tax assets and liabilities are recognized in profit or loss except to the extent that they relate to items recognized in other comprehensive income or directly in equity, in which case the relevant amounts of tax are recognized in other comprehensive income or directly in equity, respectively. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Deferred tax is calculated using the liability method on temporary differences at the reporting date between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, tax losses available to be carried forward as well as other unused tax credits, to the extent that it is probable that taxable profit, including existing taxable temporary differences, will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilized. Deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither taxable nor accounting profit or loss. Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries, associates and joint ventures, except where the Company is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax is calculated, without discounting, at the tax rates that are expected to apply in the period the liability is settled or the asset realized, based on tax rate (and tax laws) that have been enacted or substantively enacted at the reporting date. The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilized. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available. Additional income taxes that arise from the distribution of dividends are recognized when the liability to pay the related dividends is recognized. Current tax balances and deferred tax balances, and movements therein, are presented separately from each other and are not offset. Current tax assets are offset against current tax liabilities, and deferred tax assets are offset against deferred tax liabilities, if the Company has the legally enforceable right to set off the recognized amounts and the following additional conditions are met: (a) in the case of current tax assets and liabilities, the Company intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously; or (b) in the case of deferred tax assets and liabilities, if they relate to income taxes levied by the same taxation authority on either: (i) the same taxable entity; or (ii) different taxable entities, which, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered, intend either to settle current tax liabilities and realize the current tax assets on a net basis, or to settle the liabilities and realize the assets simultaneously. |
Research and development activities | 2.20 Research and development activities Costs associated with research activities are expensed in profit or loss as they incur. Costs that are directly attributable to development activities are recognized as intangible assets if, and only if, all of the following have been demonstrated: (i) the technical feasibility of completing the intangible asset so that the asset will be available for use or sale; (ii) the intention to complete the intangible asset and use or sell it; (iii) the ability to use or sell the intangible asset; (iv) how the intangible asset will generate probable future economic benefits; (v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and (vi) the ability to measure reliably the expenditure attributable to the intangible asset during its development. The amount initially recognized for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated intangible asset can be recognized, development expenditure is recognized in profit or loss in the period in which it is incurred. Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. Gains and losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized. |
Segment reporting | 2.21 Segment reporting The Company identifies operating segments and prepares segment information based on the regular internal financial information reported to the Chief Executive Officer and executive directors, who are the Company’s chief operating decision maker, for their decisions about the allocation of resources to the Company’s business components and for their review of the performance of those components. Business segment The Company operates principally in the manufacturing and sale of medium to high-end ceramic tiles. The Chief Executive Officer and executive directors regularly review the Company’s business as one business segment. Geographical segment The business of the Company is engaged entirely in the PRC. The Chief Executive Officer and executive directors regularly review the Company’s business as one geographical segment. |
Related parties | 2.22 Related parties (a) A person, or a close member of that person’s family, is related to the Company if that person: (i) has control or joint control over the Company; (ii) has significant influence over the Company; or (iii) is a member of the key management personnel of the Company or the Company’s parent. (b) An entity is related to the Company if any of the following conditions applies: (iv) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (v) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (vi) Both entities are joint ventures of the same third party. (vii) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (viii) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related to the Company. (ix) The entity is controlled or jointly controlled by a person identified in (a). (x) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity. |
GENERAL INFORMATION (Tables)
GENERAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GENERAL INFORMATION | |
Schedule of china ceramics and its subsidiaries corporate structure | China Ceramics and its subsidiaries’ (the “Company”) corporate structure as of December 31, 2019 is as follows: Nominal value of Place and date of issued ordinary Percentage of incorporation or share equity establishment/ /registered attributable to the Name operations capital Company Principal activities Direct Indirect Success Winner Limited British Virgin Islands, May 29, 2009 US$ 1 100 — Investment holding Stand Best Creation Limited Hong Kong, January 17, 2008 HKD 10,000 — 100 Investment holding Jinjiang Hengda Ceramics Co., Ltd. (note 1) PRC, September 30, 1993 RMB 288,880,000 — 100 Manufacture and sale of ceramic tiles Jiangxi Hengdali Ceramic Materials Co., Ltd. (note 1) PRC, May 4, 2008 RMB 55,880,000 — 100 Manufacture and sale of ceramic tiles Fujian Province Hengdali Building Materials Co., Ltd (note 2) PRC, September 17,2013 RMB 1,000,000 — 100 Sale of building and decoration materials Vast Elite Limited (note 1) Hong Kong, September 22, 2017 HKD 1 — 100 Trading of building material Chengdu Future (note 3) PRC, November 20, 2019 RMB — Business management and consulting services Antelope Enterprise Holdings Limited Hong Kong, December 3, 2019 HKD 10,000 — 100 Investment holding Note: 1. The registered capital of Hengda, Hengdali, Fujian Hengdali, Vast Elite and Antelope Holdings had been fully paid up. 2. Fujian Hengdali was disposed in August 2017. 3. Chengdu Future is allowed to pay the registered capital in full before November 12, 2049. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of depreciation using straight-line method | Depreciation is provided to write off the cost less their residual values over their estimated useful lives as follows, using the straight-line method: Plant and machinery 10 years Motor vehicles 10 years Office equipment 5 years |
CHANGES IN ACCOUNTING POLICIE_2
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES | |
Summary of liabilities measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate | The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on January 1, 2019 was 5.75% (Note 22). RMB’000 Operating lease commitments disclosed as at December 31, 2018 19,695 Discounted using weighted average incremental borrowing rate of 5.75% 15,496 Lease liabilities recognized as at January 1, 2019 19,380 |
Summary of impact on transition of IFRS 16 | The impact on transition of IFRS 16 is summarized as below: January 1, 2019 RMB’000 Right-of-use assets 17,266 Lease liability (19,380) Retained earnings 2,114 |
REVENUE AND OTHER INCOME (Table
REVENUE AND OTHER INCOME (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE AND OTHER INCOME | |
Schedule of analysis about company's revenue and other income | Revenue comprises the fair value of the consideration received or receivable for the sale of goods. An analysis of the Company’s revenue and other income is as follows: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Revenue Sale of goods 327,581 498,189 821,792 Other income Interest income 73 36 32 Foreign exchange gain 74 450 — Consulting income 109 — — Rent deposit refund 88 — — Other income 96 — — Gain on disposal of fixed assets — — 70 Rental income 14,196 14,151 14,151 14,636 14,637 14,253 |
FINANCE COSTS (Tables)
FINANCE COSTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FINANCE COSTS | |
Schedule of interest expense on the Company's bank borrowings | Finance costs comprise interest expense on the Company’s bank borrowings: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Interest on lease liability 315 — — Interest on bank borrowings — — |
REALIZED AND UNREALIZED FAIR _2
REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of realized and unrealized fair value (loss)/gain on derivative financial instruments | For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Realized and unrealized fair value (loss)/gain on derivative financial instruments — — — |
LOSS BEFORE TAXATION (Tables)
LOSS BEFORE TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOSS BEFORE TAXATION | |
Schedule of loss before taxation | The Company’s loss before taxation is arrived at after charging: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Cost of inventories recognized as expense (1) 246,255 499,355 771,438 Depreciation expenses 12 11,500 15,371 Amortization of land use rights — 108 143 Right-of-use asset depreciation charge 12,187 — — Auditors’ remuneration – Audit fees 1,689 1,628 320 – Audit-related fees — — — 1,689 1,628 320 Directors’ remuneration – salaries and related cost 1,747 1,418 1,200 – retirement scheme contribution 16 16 9 – share-based payments — — — Key management personnel (other than directors) – salaries and related cost 671 753 1,447 – retirement scheme contribution 20 24 23 – share-based payments 622 619 304 Research and development personnel – salaries and related cost 313 789 936 – retirement scheme contribution 45 78 102 Other personnel – salaries and related cost 26,001 33,023 55,526 – retirement scheme contribution 3,867 5,526 5,526 Total employee benefit expenses 33,302 42,246 68,025 (1) right-of-use asset depreciation/operating lease charges of RMB 12,503,000, RMB 13,902,000 and RMB 13,902,000, and (reversal of ) / (reversal) write-down of inventories of RMB (56,766,000), RMB 55,973,000 and RMB (2,733,000) for the years ended December 31, 2019, 2018, and 2017, respectively, which amounts are also included in the respective total amounts disclosed separately for each of these types of expenses |
INCOME TAX EXPENSE_(CREDIT) (Ta
INCOME TAX EXPENSE/(CREDIT) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAX EXPENSE/(CREDIT) | |
Schedule of information about income tax expense/(credit) | For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Current Tax: PRC Income Tax 29 — 5,185 Reversal of income tax refundable 27 — — — — 5,185 Deferred tax expense — 209 4,556 56 209 9,741 |
Schedule of reconciliation between income tax expense (credit) and (loss) profit before taxation at applicable tax rates | Reconciliation between income tax expense (credit) and (loss) profit before taxation at applicable tax rates is as follows: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Loss before taxation (9,445) (418,465) (78,285) Tax calculated at a tax rate of 25% (2,361) (104,616) (19,571) Tax effect on non-deductible expenses — — — Tax effect on different tax rates of group entities operating in other jurisdictions 842 588 218 Impairment losses on property, plant and equipment, and investment property that are not tax deductible — 20,191 8,817 Impairment losses on land use right that are not tax deductible — 1,064 353 Inventory provision (reversal) that are not tax deductible (taxable) (14,192) 13,993 (683) Bad debts expense that are not tax deductible 17,165 79,057 6,232 Depreciation and amortization adjustments that are not tax deductible (18,050) (15,890) (15,617) Other 29 — — Income tax refund that are not expected to receive — — 24,270 Net operating losses not recognized to deferred tax assets 16,623 5,822 5,722 Tax per financial statements 56 209 9,741 |
Schedule of deferred tax (assets)/liabilities | Deferred tax (assets)/liabilities recognized in the consolidated statements of financial position and the movements during the years are as follows: Dividend withholding Inventory Impairment Bad debt Net operating Depreciation and Deferred tax arising from: tax provision loss allowance loss amortization Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 As of January 1, 2017 — (4,765) — — — — (4,765) Charges/(credits) for the year — 4,765 — — — (209) 4,556 As of December 31, 2017 — — — — — (209) (209) Charges/(credits) for the year — — — — — 209 209 As of December 31, 2018 — — — — — — — Charges/(credits) for the year As of December 31, 2019 — — — — — — — |
Schedule of deferred tax balances | For the purpose of presentation in the consolidated statements of financial position, certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances in the consolidated statements of financial position for financial presentation purposes: As of December 31, 2019 2018 RMB’000 RMB’000 Deferred tax assets — — Deferred tax liabilities — — — — |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LOSS PER SHARE | |
Schedule of loss per share | For the years ended December 31, 2019 2018 2017 Loss attributable to holders of ordinary shares (RMB’000): (9,501) (418,674) (88,026) Weighted average number of ordinary shares outstanding used in computing basic and diluted (loss)/earnings per share 6,075,667 4,493,036 3,339,487 Loss per share - basic (RMB) (1.56) (93.18) (26.36) Loss per share - diluted (RMB) (1.56) (93.18) (26.36) |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL | |
Schedule of goodwill | As of December 31, 2019 2018 RMB’000 RMB’000 Carrying amount 3,735 3,735 Accumulated impairment losses (3,735) (3,735) — — |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY, PLANT AND EQUIPMENT | |
Schedule of information about property, plant and equipment | Plant and Motor Office Buildings machinery vehicles equipment Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Cost At January 1, 2018 349,630 746,042 4,225 1,886 1,101,783 Additions — — — — — Disposals — — — — — At December 31, 2018 349,630 746,042 4,225 1,886 1,101,783 Additions — — — — — Disposals — — — — — At December 31, 2019 349,630 746,042 4,225 1,886 1,101,783 Accumulated depreciation At January 1, 2018 48,034 339,328 3,720 1,518 392,600 Depreciation charge 1,263 10,054 28 18 11,363 At December 31, 2018 49,297 349,382 3,748 1,536 403,963 Depreciation charge — — — 11 11 At December 31, 2019 49,297 349,382 3,748 1,547 403,974 Impairment At January1, 2018 260,068 361,062 446 291 621,867 Impairment losses recognized in profit or loss 40,265 35,598 31 13 75,907 At December 31, 2018 300,333 396,660 477 304 697,774 Impairment losses recognized in profit or loss — — — — — At December 31, 2019 300,333 396,660 477 304 697,774 Carrying amount At December 31, 2018 — — — 46 46 At December 31, 2019 — — — 35 35 |
INVESTMENT PROPERTY (Tables)
INVESTMENT PROPERTY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVESTMENT PROPERTY | |
Schedule of information about investment property | 2019 2018 RMB’000 RMB’000 Cost At December 31, 2019 and 2018 37,253 37,253 Accumulated depreciation As of beginning of the year (1,886) (1,750) Depreciation for the year — (136) As of end of the year (1,886) (1,886) Impairment for the year As of beginning of the year (35,367) (30,509) Impairment losses recognized in profit or loss transferred from property, plant and equipment — (4,858) As of end of the year (35,367) (35,367) Carrying amount At December 31, 2019 and 2018 — — |
LAND USE RIGHTS (Tables)
LAND USE RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LAND USE RIGHTS | |
Schedule of information about land use rights | The Company’s land use rights are under medium-term leases in the PRC, and are analyzed for reporting purposes as follows: 2019 2018 RMB’000 RMB’000 Cost At the beginning of the year 32,619 32,619 Impact on initial application of HKFRS 16 (Note 2.6) (32,619) — At end of the year — 32,619 Accumulated amortization At beginning of the year (4,649) (4,541) Amortization — (108) Impact on initial application of HKFRS 16 (Note 2.6) 4,649 — At end of the year — (4,649) Impairment At beginning of the year (27,970) (23,714) Impairment for the year — (4,256) Impact on initial application of HKFRS 16 (Note 2.6) 27,970 — At end of the year — (27,970) Carrying amount At December 31, 2019 and 2018 — — |
LONG-TERM PREPAID EXPENSES (Tab
LONG-TERM PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LONG-TERM PREPAID EXPENSES | |
Schedule of advertising fees paid in advance | As of December 31, 2019 2018 RMB’000 RMB’000 Prepaid advertising fees — — |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
Schedule of information about inventories | As of December 31, 2019 2018 RMB’000 RMB’000 Raw materials 14,776 15,738 Work in progress 1,103 1,526 Finished goods 149,417 110,082 165,296 127,346 |
Schedule of analysis of the amount of inventories recognized as an expense and included in profit or loss | The analysis of the amount of inventories recognized as an expense and included in profit or loss is as follows: For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Carrying amount of inventories sold 303,021 443,382 774,171 Write down (reversal) of inventories (included in cost of sales) (56,766) 55,973 (2,733) 246,255 499,355 771,438 |
TRADE RECEIVABLES (Tables)
TRADE RECEIVABLES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
TRADE RECEIVABLES | |
Schedule of information about trade receivables | As of December 31, 2019 2018 RMB’000 RMB’000 Trade receivables 672,533 650,963 Less: provision for bad debt allowance (495,510) (426,849) 177,023 224,114 |
Schedule of aging analysis of the Company's trade receivables, based on the invoice date | All of the trade receivables are expected to be recovered within one year. An aging analysis of the Company’s trade receivables, based on the invoice date, is as follows: As of December 31, 2019 2018 RMB’000 RMB’000 Within 90 days 35,846 57,785 Between 3 and 6 months 72,241 69,037 More than 6 months 68,936 97,292 177,023 224,114 |
Schedule of aging analysis of trade receivables that were neither past due nor impaired or past due but not impaired | An aging analysis of trade receivables that were neither past due nor impaired or past due but not impaired, is as follows: Past due but not impaired Neither past due nor Less than Over 120 impaired 30 days 31 to 120 days days Sub-total Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 December 31, 2018 126,823 97,291 — — — 224,114 December 31, 2019 141,177 35,846 — — — 177,023 |
OTHER RECEIVABLES AND PREPAYM_2
OTHER RECEIVABLES AND PREPAYMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
OTHER RECEIVABLES AND PREPAYMENTS | |
Schedule of information about other receivables and prepayments | As of December 31, 2019 2018 RMB’000 RMB’000 Prepayments for advertising and legal fee 2,036 4,673 2,036 4,673 |
CASH AND BANK BALANCES (Tables)
CASH AND BANK BALANCES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CASH AND BANK BALANCES | |
Schedule of cash and bank balances | As of December 31, 2019 2018 RMB’000 RMB’000 Cash on hand 18 35 Cash at banks 8,194 8,981 Cash and bank balances 8,212 9,016 |
Schedule of cash and bank balances that are denominated in various currencies | Cash and bank balances are denominated in the following currencies: As of December 31, 2019 2018 RMB’000 RMB’000 Renminbi 784 203 Hong Kong dollars 6 6 US dollars 7,422 8,807 8,212 9,016 |
TRADE PAYABLES (Tables)
TRADE PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
TRADE PAYABLES | |
Schedule of information about trade payables | As of December 31, 2019 2018 RMB’000 RMB’000 Trade payables 22,577 24,329 |
ACCRUED LIABILITIES AND OTHER_2
ACCRUED LIABILITIES AND OTHER PAYABLES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
ACCRUED LIABILITIES AND OTHER PAYABLES | |
Schedule of information about accrued liabilities and other payables | As of December 31, 2019 2018 RMB’000 RMB’000 Deposits received from distributors 16,200 16,200 Accrued salary 1,208 2,331 Accrued rent, electricity and water 1,563 2,500 Accrued other taxes 1,027 1,541 Others 3,344 3,322 23,342 25,894 |
Schedule of information about accrued liabilities and other payables denominated in various currencies | Accrued liabilities and other payables are denominated in the following currencies: As of December 31, 2019 2018 ’000 ’000 In Renminbi 23,342 25,894 In US dollars 35 35 |
RIGHT-OF-USE ASSETS AND LEASE_2
RIGHT-OF-USE ASSETS AND LEASES LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
RIGHT-OF-USE ASSETS AND LEASES LIABILITIES | |
Summary of consolidated income statement showing the amounts relating to leases | Year ended December 31, 2019 Depreciation charge of right-of-use assets 12,187 Interest expense 315 |
INTEREST- BEARING BANK BORROW_2
INTEREST- BEARING BANK BORROWINGS (SECURED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INTEREST- BEARING BANK BORROWINGS (SECURED) | |
Schedule of information about borrowings | As of December 31, 2019 2018 RMB’000 RMB’000 Short-term bank borrowings - repayable within one year – shown under current liabilities — — Long-term bank borrowings - repayable more than one year but not more than 5 years - shown under non-current liabilities — — — — |
Schedule of bank borrowings denominated in currencies | Bank borrowings are denominated in the following currencies: As of December 31, 2019 2018 RMB’000 RMB’000 Renminbi — — US dollars — — — — |
Schedule of information about the borrowings and interest rate | The exposure of the Company’s loans is as follows: As of December 31, 2019 2018 Effective Effective interest rates % RMB’000 interest rates % RMB’000 Fixed rate borrowings: — — Variable rate borrowings: — % — — % — — — — — |
Schedule of undrawn bank borrowings facilities | As of the end of the reporting periods, the Company has the following undrawn bank borrowing facilities: As of December 31, 2019 2018 RMB’000 RMB’000 Variable-rate - expiring within one year — — |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SHARE CAPITAL | |
Schedule of information about classes of share capital | As of December 31, 2019 2018 Number US$ Number US$ of shares ‘000 of shares ‘000 Authorized: Ordinary shares of US$0.008 each At January 1 and December 31 51,000,000 400 51,000,000 400 As of December 31, 2019 2018 Number RMB Number RMB of shares ‘000 of shares ‘000 Issued: 7,306,985 397 5,678,703 306 Outstanding and fully paid: Ordinary shares of US$0.008 each At January 1 5,678,703 306 3,851,485 206 Issuance of new shares 1,200,000 67 1,770,299 97 Warrants exercised into shares 333,420 19 — — Equity compensation 94,862 5 56,919 3 At December 31 7,306,985 397 (2) 5,678,703 306 (1) (1) Equivalent to US$45,000 (2) Equivalent to US$58,000 |
Schedule of fair value of other than equity instrument explanatory | Grant date December 4, 2018 Share price at date of grant US$ 1.18 Exercise price at date of grant (investors and placement agent, respectively) US$ 1.27 & US$ 1.5875 Volatility 168 % Warrant life 5 years Dividend yield 0 % Risk-free interest rate 2.63 % Fair value at grant date US$ 1.45 Grant date December 18, 2019 Share price at date of grant US$ 0.68 Exercise price at date of grant (investors and placement agent, respectively) US$ 0.82 & US$ 0.9375 Volatility 141 % Warrant life 5 years Dividend yield 0 % Risk-free interest rate 1.74 % Average fair value at grant date US$ |
Schedule of summary of the warrant activity | Weighted Average Remaining Average Contractual Number of Exercise Term in Warrants Price Years Outstanding at January 1, 2018 192,857 $ 6.24 Exercisable at January 1, 2018 192,857 6.24 Granted 550,000 1.30 Exercised — — — Forfeited — — — Expired — — — Outstanding at December 31, 2018 742,857 2.58 Exercisable at December 31, 2018 742,857 2.58 Granted 1,260,000 0.83 Exercised (333,420) 1.30 — Forfeited — — — Expired — — — Outstanding at December 31, 2019 1,669,437 $ 1.52 Exercisable at December 31, 2019 1,669,437 $ 1.52 |
SIGNIFICANT RELATED PARTY TRA_2
SIGNIFICANT RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT RELATED PARTY TRANSACTIONS | |
Schedule of significant related party transactions | For the years ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Service fees paid to Stuart Management Co. — 40 81 2019 2018 RMB’000 RMB’000 Amounts owed to related parties 36,217 36,203 Service fees accrued to Stuart Management Co. — — 36,217 36,203 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS | |
Schedule of total future minimum lease payments | The leases have varying terms and the total future minimum lease payments of the Company under non-cancellable operating leases are payable as follows: As of December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Within one year 5,792 13,902 13,902 After one year and within five years — 5,792 19,694 5,792 19,694 33,596 |
Schedule of capital expenditures contracted for at the balance sheet date but not recognized | Capital expenditures contracted for at the balance sheet date but not recognized in the financial statements are as follows: As of December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Contracted for capital commitment in respect of capital contribution to its wholly foreign owned subsidiary in the PRC: Chengdu Future 30,000,000 — — Contracted but not provided for in the financial statements – acquisition of property, plant and equipment — — — |
Schedule of other commitments | The Company had the following other commitments: Year ended December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Advertising expenditure contracted but not provided for in the financial statements — — 1,670 |
FINANCIAL RISK MANAGEMENT (Tabl
FINANCIAL RISK MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FINANCIAL RISK MANAGEMENT | |
Schedule of company's remaining contractual maturities for its financial liabilities | As of December 31, 2019 More than 1 Total contractual year but less undiscounted Carrying Within 1 year than 3 years cash flow amount RMB’000 RMB’000 RMB’000 RMB’000 Trade payables 22,577 — 22,577 22,577 Amounts owed to related parties 36,217 36,217 36,217 Interest-bearing bank borrowings — — — — Total 58,794 — 58,794 58,794 As of December 31, 2018 More than 1 Total contractual year but less undiscounted Carrying Within 1 year than 3 years cash flow amount RMB’000 RMB’000 RMB’000 RMB’000 Trade payables 24,329 — 24,329 24,329 Amounts owed to related parties 36,203 36,203 36,023 Interest-bearing bank borrowings — — — — Total 60,532 — 60,532 60,532 |
Schedule of loss before taxation | As of December 31, 2019 2018 2017 RMB’000 RMB’000 RMB’000 Loss before taxation 414 353 86 |
CAPITAL MANAGEMENT (Tables)
CAPITAL MANAGEMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
CAPITAL MANAGEMENT | |
Schedule of capital structure | The Company monitors capital on the basis of the debt to capital ratio, which is calculated as net debts divided by equity attributable to shareholders of the Company. As of December 31, 2019 2018 RMB’000 RMB’000 Interest-bearing bank borrowings — — Amounts owed to related parties 36,217 36,203 Total debts 36,217 36,203 Less: Cash and cash equivalents (excluding restricted bank balances) (8,212) (9,016) Net debts 28,005 27,187 Equity attributable to shareholders of the Company 272,496 275,712 Gearing ratio 10.3 % 9.9 % |
GENERAL INFORMATION (Details)
GENERAL INFORMATION (Details) | 12 Months Ended | ||||||||
Dec. 31, 2019HKD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | [2] | Dec. 31, 2017CNY (¥) | Sep. 22, 2017HKD ($) | ||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Nominal value of issued ordinary share/registered capital | $ 58,000,000 | ¥ 397,000 | [1] | $ 45,000,000 | ¥ 306,000 | ¥ 206,000 | |||
Success Winner Limited [Member] | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Success Winner Limited | ||||||||
Place and date of incorporation or establishment/operations | British Virgin Islands, May 29, 2009 | ||||||||
Nominal value of issued ordinary share/registered capital | $ | $ 1 | ||||||||
Percentage of equity attributable to the Company Direct | 100.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 0.00% | ||||||||
Principal activities | Investment holding | ||||||||
Stand Best Creation Limited [Member] | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Stand Best Creation Limited | ||||||||
Place and date of incorporation or establishment/operations | Hong Kong, January 17, 2008 | ||||||||
Nominal value of issued ordinary share/registered capital | $ | $ 10,000 | ||||||||
Percentage of equity attributable to the Company Direct | 0.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 100.00% | ||||||||
Principal activities | Investment holding | ||||||||
Jinjiang Hengda Ceramics Co [Member] | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Jinjiang Hengda Ceramics Co., Ltd. (note 1) | ||||||||
Place and date of incorporation or establishment/operations | PRC, September 30, 1993 | ||||||||
Nominal value of issued ordinary share/registered capital | 288,880,000 | ||||||||
Percentage of equity attributable to the Company Direct | 0.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 100.00% | ||||||||
Principal activities | Manufacture and sale of ceramic tiles | ||||||||
Jiangxi Hengdali Ceramic Materials Co [Member] | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Jiangxi Hengdali Ceramic Materials Co., Ltd. (note 1) | ||||||||
Place and date of incorporation or establishment/operations | PRC, May 4, 2008 | ||||||||
Nominal value of issued ordinary share/registered capital | 55,880,000 | ||||||||
Percentage of equity attributable to the Company Direct | 0.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 100.00% | ||||||||
Principal activities | Manufacture and sale of ceramic tiles | ||||||||
Fujian Province Hengdali Building Materials Co [Member] | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Fujian Province Hengdali Building Materials Co., Ltd (note 2) | ||||||||
Place and date of incorporation or establishment/operations | PRC, September 17,2013 | ||||||||
Nominal value of issued ordinary share/registered capital | 1,000,000 | ||||||||
Percentage of equity attributable to the Company Direct | 0.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 100.00% | ||||||||
Principal activities | Sale of building and decoration materials | ||||||||
Vast Elite Limited [Member] | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Vast Elite Limited (note 1) | ||||||||
Place and date of incorporation or establishment/operations | Hong Kong, September 22, 2017 | ||||||||
Nominal value of issued ordinary share/registered capital | 1 | $ 1 | |||||||
Percentage of equity attributable to the Company Direct | 0.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 100.00% | ||||||||
Principal activities | Trading of building material | ||||||||
Chengdu Future | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Chengdu Future (note 3) | ||||||||
Place and date of incorporation or establishment/operations | PRC, November 20, 2019 | ||||||||
Nominal value of issued ordinary share/registered capital | 30,000,000 | ||||||||
Percentage of equity attributable to the Company Direct | 0.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 100.00% | ||||||||
Principal activities | Business management and consulting services | ||||||||
Antelope Holdings | |||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||
Name | Antelope Enterprise Holdings Limited | ||||||||
Place and date of incorporation or establishment/operations | Hong Kong, December 3, 2019 | ||||||||
Nominal value of issued ordinary share/registered capital | ¥ 10,000 | ||||||||
Percentage of equity attributable to the Company Direct | 0.00% | ||||||||
Percentage of equity attributable to the Company Indirect | 100.00% | ||||||||
Principal activities | Investment holding | ||||||||
[1] | (2) Equivalent to US$58,000 | ||||||||
[2] | (1) Equivalent to US$45,000 |
GENERAL INFORMATION - Additiona
GENERAL INFORMATION - Additional Information (Details) | Sep. 17, 2013CNY (¥) | Jan. 08, 2010CNY (¥) | Jun. 30, 2009HKD ($)$ / sharesshares | Dec. 31, 2019USD ($)shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | Dec. 03, 2019 | Nov. 20, 2019 | Dec. 31, 2018USD ($)shares | Dec. 31, 2018CNY (¥)shares | Sep. 22, 2017HKD ($) | Jun. 28, 2016shares | Jun. 27, 2016shares | Sep. 01, 2010shares | Nov. 20, 2009$ / sharesshares | Jun. 30, 2009CNY (¥) | May 29, 2009USD ($)$ / shares | Apr. 01, 2008CNY (¥) | Nov. 21, 2007shares | ||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Number of shares outstanding | shares | 7,306,985 | 3,851,485 | 7,306,985 | 5,678,703 | 5,678,703 | 2,700,000 | 21,900,000 | 14,553,949 | 3,200,000 | ||||||||||||
Issued capital | $ 58,000,000 | ¥ 206,000 | ¥ 397,000 | [1] | $ 45,000,000 | ¥ 306,000 | [2] | ||||||||||||||
Vast Elite Limited [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Percentage of voting equity interests acquired | 100.00% | ||||||||||||||||||||
Issued capital | 1 | $ 1 | |||||||||||||||||||
Chengdu Future | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Issued capital | 30,000,000 | ||||||||||||||||||||
Antelope Holdings | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Issued capital | 10,000 | ||||||||||||||||||||
Fujian Province Jinjiang City Anhai Junbing Hengda Construction Material Factory [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Proportion of ownership interests held by non-controlling interests | 15.00% | ||||||||||||||||||||
Chi Wah Trading Import and Export Company [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Proportion of ownership interest in subsidiary | 85.00% | ||||||||||||||||||||
Mr. Wong Kung Tok [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Amounts payable, related party transactions | $ 67,900,000 | ¥ 40,200,000 | ¥ 58,900,000 | ||||||||||||||||||
Stock issued during period, shares to related parties | shares | 9,999 | ||||||||||||||||||||
Par value per share | $ / shares | $ 1 | ||||||||||||||||||||
Jinjiang Hengda Ceramics Co., Ltd [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Percentage of voting equity interests acquired | 100.00% | ||||||||||||||||||||
Proceeds from disposal of non-current assets or disposal groups classified as held for sale and discontinued operations | ¥ 0 | ||||||||||||||||||||
Chengdu Future | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Percentage of voting equity interests acquired | 100.00% | ||||||||||||||||||||
Antelope Holdings | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Percentage of voting equity interests acquired | 100.00% | ||||||||||||||||||||
Success Winner Limited [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Business combination, consideration, exchange price of share | $ / shares | $ 10 | ||||||||||||||||||||
Business combination, consideration, number of outstanding shares acquired | shares | 5,743,320 | ||||||||||||||||||||
Number of shares outstanding | shares | 8,950,171 | ||||||||||||||||||||
Issued capital | $ | $ 1 | ||||||||||||||||||||
Success Winner Limited [Member] | Mr. Wong Kung Tok [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Par value per share | $ / shares | $ 1 | ||||||||||||||||||||
Anhai Hengda [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Percentage of voting equity interests acquired | 100.00% | ||||||||||||||||||||
Anhai Hengda and Chi Wah [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Consideration transferred, acquisition-date fair value | ¥ 58,980,000 | ||||||||||||||||||||
Jiangxi Hengdali Ceramic Materials Co., Ltd [Member] | |||||||||||||||||||||
Disclosure of GENERAL INFORMATION [Line Items] | |||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Loans | ¥ 60,000,000 | ||||||||||||||||||||
Consideration paid (received) | ¥ 185,500,000 | ||||||||||||||||||||
Losses on disposals of investments | ¥ 736,000 | ||||||||||||||||||||
[1] | (2) Equivalent to US$58,000 | ||||||||||||||||||||
[2] | (1) Equivalent to US$45,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Amortization period of Land Use Rights | 50 years |
Plant and machinery | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life measured as period of time, property, plant and equipment | 10 years |
Motor vehicles | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life measured as period of time, property, plant and equipment | 10 years |
Office equipment | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life measured as period of time, property, plant and equipment | 5 years |
Buildings [Member] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Useful life measured as period of time, property, plant and equipment | 40 years |
CHANGES IN ACCOUNTING POLICIE_3
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES | ||||
Weighted average lessee's incremental borrowing rate applied to the lease liabilities | 5.75% | |||
Operating lease commitments disclosed as at December 31, 2018 | ¥ 19,695 | |||
Discounted using weighted average incremental borrowing rate of 5.75% | ¥ 15,496 | |||
Lease liabilities recognized as at January 1, 2019 | 19,380 | |||
Right-of-use assets | ¥ 0 | 17,266 | 32,619 | ¥ 32,619 |
Lease liability | (5,793) | (19,380) | 0 | |
Retained earnings | ¥ 272,496 | ¥ 2,114 | ¥ 275,712 |
CRITICAL ACCOUNTING ESTIMATES_2
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (Details) - CNY (¥) | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2019 | |
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | ||||||
Property, plant and equipment | ¥ 35,000 | ¥ 46,000 | ||||
Impairment loss recognised in profit or loss, property, plant and equipment | 0 | 75,907,000 | ¥ 33,653,000 | |||
Investment property | 0 | 0 | ||||
Impairment loss recognised in profit or loss, investment property | 0 | 4,858,000 | 1,617,000 | |||
Right-of-use assets | 0 | 32,619,000 | 32,619,000 | ¥ 17,266,000 | ||
Impairment loss | 0 | 85,021,000 | 36,683,000 | |||
Impairment loss of land use rights | 0 | 4,256,000 | 1,413,000 | |||
Impairment loss recognised in profit or loss, goodwill | 0 | 0 | ¥ 0 | ¥ 0 | ¥ 3,735,000 | |
Current tax liabilities | 842,000 | 4,497,000 | ||||
Trade and other current receivables | 177,023,000 | 224,114,000 | ||||
Current inventories | 165,296,000 | 127,346,000 | ||||
Land use rights member [Member] | ||||||
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS | ||||||
Right-of-use assets | 0 | 0 | ||||
Impairment loss of land use rights | ¥ 0 | ¥ 4,256,000 |
REVENUE AND OTHER INCOME (Detai
REVENUE AND OTHER INCOME (Details) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||
Sale of goods | ¥ 327,581,000 | ¥ 498,189,000 | ¥ 821,792,000 |
Other income | |||
Interest income | 73,000 | 36,000 | 32,000 |
Foreign exchange gain | 74,000 | 450,000 | 0 |
Consulting income | 109,000 | 0 | 0 |
Rent deposit refund | 88,000 | 0 | 0 |
Other income | 96,000 | 0 | 0 |
Gain on disposal of fixed assets | 0 | 0 | 70,000 |
Rental income | 14,196,000 | 14,151,000 | 14,151,000 |
Total Other Income | ¥ 14,636,000 | ¥ 14,637,000 | ¥ 14,253,000 |
FINANCE COSTS (Details)
FINANCE COSTS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
FINANCE COSTS | |||
Interest on lease liability | ¥ 315 | ¥ 0 | ¥ 0 |
Interest on bank borrowings | ¥ 0 | ¥ 0 | ¥ 213 |
REALIZED AND UNREALIZED FAIR _3
REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
REALIZED AND UNREALIZED FAIR VALUE (LOSS)/GAIN ON DERIVATIVE FINANCIAL INSTRUMENTS | |||
Realized and unrealized fair value (loss)/gain on derivative financial instruments | ¥ 0 | ¥ 0 | ¥ 0 |
LOSS BEFORE TAXATION (Details)
LOSS BEFORE TAXATION (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
LOSS BEFORE TAXATION | |||
Cost of inventories recognized as expense~(1)~ | ¥ 246,255 | ¥ 499,355 | ¥ 771,438 |
Depreciation expense | 12 | 11,500 | 15,371 |
Amortization of land use rights | 0 | 108 | 143 |
Right-of-use asset depreciation charge | 12,187 | 0 | 0 |
Auditors' remuneration | |||
Audit fees | 1,689 | 1,628 | 320 |
Audit-related fees | 0 | 0 | 0 |
Auditor's remuneration | 1,689 | 1,628 | 320 |
Total employee benefit expenses | 33,302 | 42,246 | 68,025 |
Directors | |||
Auditors' remuneration | |||
salaries and related cost | 1,747 | 1,418 | 1,200 |
retirement scheme contribution | 16 | 16 | 9 |
share-based payments | 0 | 0 | 0 |
Key management personnel | |||
Auditors' remuneration | |||
salaries and related cost | 671 | 753 | 1,447 |
retirement scheme contribution | 20 | 24 | 23 |
share-based payments | 622 | 619 | 304 |
Research and development personnel | |||
Auditors' remuneration | |||
salaries and related cost | 313 | 789 | 936 |
retirement scheme contribution | 45 | 78 | 102 |
Other personnel | |||
Auditors' remuneration | |||
salaries and related cost | 26,001 | 33,023 | 55,526 |
retirement scheme contribution | ¥ 3,867 | ¥ 5,526 | ¥ 5,526 |
LOSS BEFORE TAXATION - Addition
LOSS BEFORE TAXATION - Additional Information - (Details) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of LOSS BEFORE TAXATION [Line Items] | |||
Employee benefits expense | ¥ 33,302,000 | ¥ 42,246,000 | ¥ 68,025,000 |
Adjustment For Inventory Reversal Of Written Down | 56,766,000 | (55,973,000) | 2,733,000 |
Cost Of inventories [Member] | |||
Disclosure of LOSS BEFORE TAXATION [Line Items] | |||
Employee benefits expense | 19,867,000 | 27,087,000 | 48,857,000 |
Post-employment benefit expense, defined contribution plans | 2,734,411 | 4,135,000 | 6,984,000 |
Operating Lease Payment | 12,503,000 | 13,902,000 | 13,902,000 |
Reversal of inventory write-down | 56,766,000 | ||
Adjustment For Inventory Reversal Of Written Down | 55,973,000 | (2,733,000) | |
Depreciation and amortisation expense | ¥ 0 | ¥ 8,457,000 | ¥ 11,203,000 |
INCOME TAX EXPENSE_(CREDIT) (De
INCOME TAX EXPENSE/(CREDIT) (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax expense (income) and adjustments for current tax of prior periods [abstract] | |||
PRC Income Tax | ¥ 29 | ¥ 0 | ¥ 5,185 |
Reversal of income tax refundable | 27 | 0 | 0 |
Current tax expense (income) and adjustments for current tax of prior periods | 0 | 0 | 5,185 |
Deferred tax expense | 0 | 209 | 4,556 |
Tax expense (income), continuing operations | ¥ 56 | ¥ 209 | ¥ 9,741 |
INCOME TAX EXPENSE_(CREDIT) - R
INCOME TAX EXPENSE/(CREDIT) - Reconciliation between income tax expense (credit) and (loss) profit before taxation at applicable tax rates (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INCOME TAX EXPENSE CREDIT [Abstract] | |||
Loss before taxation | ¥ (9,445) | ¥ (418,465) | ¥ (78,285) |
Tax calculated at a tax rate of 25% | (2,361) | (104,616) | (19,571) |
Tax effect on non-deductible expenses | 0 | 0 | 0 |
Tax effect on different tax rates of group entities operating in other jurisdictions | 842 | 588 | 218 |
Impairment losses on property, plant and equipment, and investment property that are not tax deductible | 0 | 20,191 | 8,817 |
Impairment losses on land use right that are not tax deductible | 0 | 1,064 | 353 |
Inventory provision (reversal) that are not tax deductible (taxable) | (14,192) | 13,993 | (683) |
Bad debt allowance that are not tax deductible | 17,165 | 79,057 | 6,232 |
Depreciation and amortization adjustments that are not tax deductible | (18,050) | (15,890) | (15,617) |
Other | 29 | 0 | 0 |
Income tax refund that are not expected to receive | 0 | 0 | 24,270 |
Net operating losses not recognized to deferred tax assets | 16,623 | 5,822 | 5,722 |
Tax per financial statements | ¥ 56 | ¥ 209 | ¥ 9,741 |
INCOME TAX EXPENSE_(CREDIT) - D
INCOME TAX EXPENSE/(CREDIT) - Deferred tax (assets)/liabilities recognized in the consolidated statements of financial position and the movements during the years (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | |||
Balance | ¥ 0 | ¥ (209) | ¥ (4,765) |
Charges/(credits) for the year | 0 | 209 | 4,556 |
Balance | 0 | 0 | (209) |
Dividend Withholding Tax [Member] | |||
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | |||
Balance | 0 | 0 | 0 |
Charges/(credits) for the year | 0 | 0 | 0 |
Balance | 0 | 0 | 0 |
Inventory Provision [Member] | |||
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | |||
Balance | 0 | 0 | (4,765) |
Charges/(credits) for the year | 0 | 0 | 4,765 |
Balance | 0 | 0 | 0 |
Impairment Loss [Member] | |||
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | |||
Balance | 0 | 0 | 0 |
Charges/(credits) for the year | 0 | 0 | 0 |
Balance | 0 | 0 | 0 |
Bad Debt Allowance [Member] | |||
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | |||
Balance | 0 | 0 | 0 |
Charges/(credits) for the year | 0 | 0 | 0 |
Balance | 0 | 0 | 0 |
Net Operating Allowance [Member] | |||
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | |||
Balance | 0 | 0 | 0 |
Charges/(credits) for the year | 0 | 0 | 0 |
Balance | 0 | 0 | 0 |
Depreciation And Amortization [Member] | |||
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | |||
Balance | 0 | (209) | 0 |
Charges/(credits) for the year | 0 | 209 | (209) |
Balance | ¥ 0 | ¥ 0 | ¥ (209) |
INCOME TAX EXPENSE_(CREDIT) - A
INCOME TAX EXPENSE/(CREDIT) - Analysis of the deferred tax balances in the consolidated statements (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
INCOME TAX EXPENSE/(CREDIT) | ||||
Deferred tax assets | ¥ 0 | ¥ 0 | ||
Deferred tax liabilities | 0 | 0 | ||
Deferred tax liability (asset) | ¥ 0 | ¥ 0 | ¥ (209) | ¥ (4,765) |
INCOME TAX EXPENSE_(CREDIT) -_2
INCOME TAX EXPENSE/(CREDIT) - Additional Information (Details) - CNY (¥) | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 14, 2015 | Jan. 14, 2014 | Jan. 01, 2008 | |
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | ||||||
Applicable tax rate | 25.00% | 25.00% | 25.00% | |||
Dividend withholding tax rate | 5.00% | 5.00% | 10.00% | |||
Undistributed earnings | ¥ 267,193,000 | ¥ 329,503,000 | ¥ 380,109,000 | |||
Deferred tax liabilities recognized to the extent distributable profits earned | ¥ 0 | ¥ 0 | ¥ 0 | |||
Deferred tax liabilities further recognition | 13,360,000 | 16,475,000 | 19,005,000 | |||
HONG KONG | ||||||
Disclosure of INCOME TAX EXPENSE CREDIT [Line Items] | ||||||
Applicable tax rate | 16.50% | 16.50% | 16.50% | |||
Dividend withholding tax rate | 5.00% |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - ¥ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
LOSS PER SHARE | |||
Loss attributable to holders of ordinary shares | (9,501,000) | (418,674,000) | (88,026,000) |
Weighted average number of ordinary shares outstanding used in computing basic and diluted (loss)/earnings per share | 6,075,667 | 4,493,036 | 3,339,487 |
Loss per share - basic (RMB) | ¥ (1.56) | ¥ (93.18) | ¥ (26.36) |
Loss per share - diluted (RMB) | ¥ (1.56) | ¥ (93.18) | ¥ (26.36) |
LOSS PER SHARE (Details Textual
LOSS PER SHARE (Details Textual) - CNY (¥) | Jun. 28, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
LOSS PER SHARE | ||||
Description of instruments with potential future dilutive effect not included in calculation of diluted earnings per share | Warrants to purchase common stock are not included in the diluted loss per share calculations when their effect is antidilutive. For the year ended December 31, 2019, about 1,669,437 of potential common stock related to outstanding warrants and stock options were excluded from the calculation of diluted net loss per share as such shares are antidilutive when there is a loss. There were 728,571 and 178,571 shares for the years ended December 31, 2018 and 2017. | |||
Equity, Reverse Stock Split | 0.125 | |||
Number of other equity instruments outstanding in share-based payment arrangement | 1,669,437 | 742,857 | 192,857 |
GOODWILL (Details)
GOODWILL (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
GOODWILL | ||
Carrying amount | ¥ 3,735 | ¥ 3,735 |
Accumulated impairment losses | (3,735) | (3,735) |
Goodwill | ¥ 0 | ¥ 0 |
GOODWILL - Additional Informati
GOODWILL - Additional Information (Details) - CNY (¥) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
GOODWILL | |||||
Impairment loss recognised in profit or loss, goodwill | ¥ 0 | ¥ 0 | ¥ 0 | ¥ 0 | ¥ 3,735,000 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Impairment losses recognized in profit or loss | ¥ 0 | ¥ 75,907,000 | ¥ 33,653,000 |
Carrying amount | |||
Property, plant and equipment | 35,000 | 46,000 | |
Cost [Member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 1,101,783,000 | 1,101,783,000 | |
Additions | 0 | 0 | |
Disposals | 0 | 0 | |
Balance | 1,101,783,000 | 1,101,783,000 | 1,101,783,000 |
Accumulated depreciation | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 403,963,000 | 392,600,000 | |
Depreciation charge | 11,000 | 11,363,000 | |
Balance | 403,974,000 | 403,963,000 | 392,600,000 |
Impairment for the year | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 697,774,000 | 621,867,000 | |
Impairment losses recognized in profit or loss | 0 | 75,907,000 | |
Balance | 697,774,000 | 697,774,000 | 621,867,000 |
Buildings [Member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Impairment losses recognized in profit or loss | 1,687,000 | 1,687,000 | |
Carrying amount | |||
Property, plant and equipment | 0 | 0 | |
Buildings [Member] | Cost [Member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 349,630,000 | 349,630,000 | |
Additions | 0 | 0 | |
Disposals | 0 | 0 | |
Balance | 349,630,000 | 349,630,000 | 349,630,000 |
Buildings [Member] | Accumulated depreciation | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 49,297,000 | 48,034,000 | |
Depreciation charge | 0 | 1,263,000 | |
Balance | 49,297,000 | 49,297,000 | 48,034,000 |
Buildings [Member] | Impairment for the year | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 300,333,000 | 260,068,000 | |
Impairment losses recognized in profit or loss | 0 | 40,265,000 | |
Balance | 300,333,000 | 300,333,000 | 260,068,000 |
Plant And Machinery [Member] | |||
Carrying amount | |||
Property, plant and equipment | 0 | 0 | |
Plant And Machinery [Member] | Cost [Member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 746,042,000 | 746,042,000 | |
Additions | 0 | 0 | |
Disposals | 0 | 0 | |
Balance | 746,042,000 | 746,042,000 | 746,042,000 |
Plant And Machinery [Member] | Accumulated depreciation | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 349,382,000 | 339,328,000 | |
Depreciation charge | 0 | 10,054,000 | |
Balance | 349,382,000 | 349,382,000 | 339,328,000 |
Plant And Machinery [Member] | Impairment for the year | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 396,660,000 | 361,062,000 | |
Impairment losses recognized in profit or loss | 0 | 35,598,000 | |
Balance | 396,660,000 | 396,660,000 | 361,062,000 |
Motor vehicles | |||
Carrying amount | |||
Property, plant and equipment | 0 | 0 | |
Motor vehicles | Cost [Member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 4,225,000 | 4,225,000 | |
Additions | 0 | 0 | |
Disposals | 0 | 0 | |
Balance | 4,225,000 | 4,225,000 | 4,225,000 |
Motor vehicles | Accumulated depreciation | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 3,748,000 | 3,720,000 | |
Depreciation charge | 0 | 28,000 | |
Balance | 3,748,000 | 3,748,000 | 3,720,000 |
Motor vehicles | Impairment for the year | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 477,000 | 446,000 | |
Impairment losses recognized in profit or loss | 0 | 31,000 | |
Balance | 477,000 | 477,000 | 446,000 |
Office equipment | |||
Carrying amount | |||
Property, plant and equipment | 35,000 | 46,000 | |
Office equipment | Cost [Member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 1,886,000 | 1,886,000 | |
Additions | 0 | 0 | |
Disposals | 0 | 0 | |
Balance | 1,886,000 | 1,886,000 | 1,886,000 |
Office equipment | Accumulated depreciation | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 1,536,000 | 1,518,000 | |
Depreciation charge | 11,000 | 18,000 | |
Balance | 1,547,000 | 1,536,000 | 1,518,000 |
Office equipment | Impairment for the year | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Balance | 304,000 | 291,000 | |
Impairment losses recognized in profit or loss | 0 | 13,000 | |
Balance | ¥ 304,000 | ¥ 304,000 | ¥ 291,000 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT (Details Textual) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Gains on disposals of property, plant and equipment | ¥ 0 | ¥ 0 | ¥ (70,000) |
Losses on disposals of property, plant and equipment | 70,000 | 0 | |
Impairment loss recognised in profit or loss, property, plant and equipment | ¥ 0 | 75,907,000 | ¥ 33,653,000 |
Buildings [Member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Useful life measured as period of time, property, plant and equipment | 40 years | ||
Property Plant And Equipment, At Cost | ¥ 2,913,000 | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment's | 1,226,000 | 1,226,000 | |
Impairment loss recognised in profit or loss, property, plant and equipment | ¥ 1,687,000 | ¥ 1,687,000 |
INVESTMENT PROPERTY (Details)
INVESTMENT PROPERTY (Details) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about investment property [line items] | |||
Investment property fair value used as deemed cost | ¥ 37,253,000 | ¥ 37,253,000 | |
As of beginning of the year | 0 | ||
Impairment losses recognized in profit or loss transferred from property, plant and equipment | 0 | 4,858,000 | ¥ 1,617,000 |
As of end of the year | 0 | 0 | |
Fair value of investment property | 35,400,000 | ||
Additions from acquisitions, investment property | 0 | 0 | |
Accumulated depreciation | |||
Disclosure of detailed information about investment property [line items] | |||
As of beginning of the year | (1,886,000) | (1,750,000) | |
Depreciation for the year | 0 | (136,000) | |
As of end of the year | (1,886,000) | (1,886,000) | (1,750,000) |
Impairment for the year | |||
Disclosure of detailed information about investment property [line items] | |||
As of beginning of the year | (35,367,000) | (30,509,000) | |
Impairment losses recognized in profit or loss transferred from property, plant and equipment | 0 | 4,858,000 | |
As of end of the year | ¥ (35,367,000) | ¥ (35,367,000) | ¥ (30,509,000) |
INVESTMENT PROPERTY - Additiona
INVESTMENT PROPERTY - Additional Information (Details) - CNY (¥) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
INVESTMENT PROPERTY | ||
Investment property fair value used as deemed cost | ¥ 37,253,000 | ¥ 37,253,000 |
Increase decrease in impairment losses recognized in profit or loss transferred from property, plant and equipment | ¥ 0 | ¥ 4,858,000 |
LAND USE RIGHTS (Details)
LAND USE RIGHTS (Details) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of LAND USE RIGHTS [Line Items] | |||
Balance | ¥ 32,619,000 | ¥ 32,619,000 | |
Amortization | (12,187,000) | 0 | ¥ 0 |
Impact on initial application of HKFRS 16 (Note 2.6) | (32,619,000) | 0 | |
Impairment for the year | 0 | (4,256,000) | (1,413,000) |
Balance | 0 | 32,619,000 | 32,619,000 |
Carrying Amount | 0 | 0 | |
Accumulated depreciation | |||
Disclosure Of LAND USE RIGHTS [Line Items] | |||
Balance | (4,649,000) | (4,541,000) | |
Amortization | 0 | (108,000) | |
Impact on initial application of HKFRS 16 (Note 2.6) | (4,649,000) | 0 | |
Balance | 0 | (4,649,000) | (4,541,000) |
Impairment for the year | |||
Disclosure Of LAND USE RIGHTS [Line Items] | |||
Balance | (27,970,000) | (23,714,000) | |
Impact on initial application of HKFRS 16 (Note 2.6) | 27,970,000 | 0 | |
Impairment for the year | 0 | (4,256,000) | |
Balance | ¥ 0 | ¥ (27,970,000) | ¥ (23,714,000) |
LAND USE RIGHTS - Additional In
LAND USE RIGHTS - Additional Information (Details) - CNY (¥) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of LAND USE RIGHTS [Line Items] | |||
Impairment loss recognised in profit or loss, intangible assets other than goodwill | ¥ 0 | ¥ 4,256,000 | ¥ 1,413,000 |
Land use rights member [Member] | |||
Disclosure Of LAND USE RIGHTS [Line Items] | |||
Impairment loss recognised in profit or loss, intangible assets other than goodwill | ¥ 0 | ¥ 4,256,000 |
LONG-TERM PREPAID EXPENSES (Det
LONG-TERM PREPAID EXPENSES (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
LONG-TERM PREPAID EXPENSES | ||
Non-current prepayments | ¥ 0 | ¥ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
INVENTORIES | ||
Raw materials | ¥ 14,776 | ¥ 15,738 |
Work in progress | 1,103 | 1,526 |
Finished goods | 149,417 | 110,082 |
Current inventories | ¥ 165,296 | ¥ 127,346 |
INVENTORIES - Amount of invento
INVENTORIES - Amount of inventories recognized as an expense and included in profit or loss (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
INVENTORIES | |||
Carrying amount of inventories sold | ¥ 303,021 | ¥ 443,382 | ¥ 774,171 |
Write down of inventories (reversal of inventory provision) | (56,766) | 55,973 | (2,733) |
Cost of sales | ¥ 246,255 | ¥ 499,355 | ¥ 771,438 |
TRADE RECEIVABLES (Details)
TRADE RECEIVABLES (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
TRADE RECEIVABLES | |||
Trade receivables | ¥ 672,533 | ¥ 650,963 | |
Less: provision for bad debt allowance | ¥ (71,565) | ||
Current trade receivables | ¥ 177,023 | ¥ 224,114 |
TRADE RECEIVABLES - An aging an
TRADE RECEIVABLES - An aging analysis of the Company's trade receivables (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | ¥ 177,023 | ¥ 224,114 |
Within 90 days | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | 35,846 | 57,785 |
Between 3 and 6 months | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | 72,241 | 69,037 |
More than 6 months | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | ¥ 68,936 | ¥ 97,292 |
TRADE RECEIVABLES - An aging _2
TRADE RECEIVABLES - An aging analysis of trade receivables that were neither past due nor impaired or past due but not impaired (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | ¥ 177,023 | ¥ 224,114 |
Financial assets past due but not impaired [member] | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | 0 | 0 |
Financial assets past due but not impaired [member] | Not later than one month | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | 35,846 | 97,291 |
Financial assets past due but not impaired [member] | Later than one month and not later than four months [Member] | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | 0 | 0 |
Financial assets past due but not impaired [member] | Later than four months [member] | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | 0 | 0 |
Financial assets neither past due nor impaired [member] | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Current trade receivables | ¥ 141,177 | ¥ 126,823 |
TRADE RECEIVABLES - Additional
TRADE RECEIVABLES - Additional Information (Details) - CNY (¥) | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Allowance of doubtful accounts on trade receivables | ¥ 495,510,000 | ¥ 426,849,000 |
Expected credit loss rate | 13.00% | 30.00% |
Five Largest Customers [Member] | ||
Disclosure Of TRADE RECEIVABLES [Line Items] | ||
Expected credit loss rate | 42.00% | 97.00% |
OTHER RECEIVABLES AND PREPAYM_3
OTHER RECEIVABLES AND PREPAYMENTS (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
OTHER RECEIVABLES AND PREPAYMENTS | ||
Prepayments for advertising and legal fee | ¥ 2,036 | ¥ 4,673 |
Current prepayments and other current assets | ¥ 2,036 | ¥ 4,673 |
CASH AND BANK BALANCES (Details
CASH AND BANK BALANCES (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CASH AND BANK BALANCES | ||
Cash on hand | ¥ 18 | ¥ 35 |
Cash at banks | 8,194 | 8,981 |
Cash and bank balances | ¥ 8,212 | ¥ 9,016 |
CASH AND BANK BALANCES - Cash a
CASH AND BANK BALANCES - Cash and bank balances are denominated in currencies (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure Of CASH AND BANK BALANCES [Line Items] | ||||
Cash and cash equivalents | ¥ 8,212 | ¥ 9,016 | ¥ 2,328 | ¥ 110 |
Renminbi | ||||
Disclosure Of CASH AND BANK BALANCES [Line Items] | ||||
Cash and cash equivalents | 784 | 203 | ||
Hong Kong dollars | ||||
Disclosure Of CASH AND BANK BALANCES [Line Items] | ||||
Cash and cash equivalents | 6 | 6 | ||
US dollars | ||||
Disclosure Of CASH AND BANK BALANCES [Line Items] | ||||
Cash and cash equivalents | ¥ 7,422 | ¥ 8,807 |
CASH AND BANK BALANCES - Additi
CASH AND BANK BALANCES - Additional Information (Details) - CNY (¥) | Dec. 31, 2019 | Dec. 31, 2018 |
CASH AND BANK BALANCES | ||
Restricted Cash and Cash Equivalents | ¥ 2,785,000 | ¥ 1,719,000 |
Cash collateral for bank borrowings | 0 | 0 |
Cash collateral for derivative financial liability | ¥ 0 | ¥ 0 |
TRADE PAYABLES (Details)
TRADE PAYABLES (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
TRADE PAYABLES | ||
Trade payables | ¥ 22,577 | ¥ 24,329 |
ACCRUED LIABILITIES AND OTHER_3
ACCRUED LIABILITIES AND OTHER PAYABLES (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
ACCRUED LIABILITIES AND OTHER PAYABLES | ||
Deposits received from distributors | ¥ 16,200 | ¥ 16,200 |
Accrued salary | 1,208 | 2,331 |
Accrued rent, electricity and water | 1,563 | 2,500 |
Accrued other taxes | 1,027 | 1,541 |
Others | 3,344 | 3,322 |
Current accrued expenses and other current liabilities | ¥ 23,342 | ¥ 25,894 |
ACCRUED LIABILITIES AND OTHER_4
ACCRUED LIABILITIES AND OTHER PAYABLES - Accrued liabilities and other payables are denominated in currencies (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of ACCRUED LIABILITIES AND OTHER PAYABLES [Line Items] | ||
Current accrued expenses and other current liabilities | ¥ 23,342 | ¥ 25,894 |
Renminbi | ||
Disclosure Of ACCRUED LIABILITIES AND OTHER PAYABLES [Line Items] | ||
Current accrued expenses and other current liabilities | 23,342 | 25,894 |
US dollars | ||
Disclosure Of ACCRUED LIABILITIES AND OTHER PAYABLES [Line Items] | ||
Current accrued expenses and other current liabilities | ¥ 35 | ¥ 35 |
ACCRUED LIABILITIES AND OTHER_5
ACCRUED LIABILITIES AND OTHER PAYABLES - Additional Information (Details) - CNY (¥) | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of ACCRUED LIABILITIES AND OTHER PAYABLES [Line Items] | ||
Deposits received from distributors | ¥ 16,200,000 | ¥ 16,200,000 |
Bottom of range [member] | ||
Disclosure Of ACCRUED LIABILITIES AND OTHER PAYABLES [Line Items] | ||
Deposits received from distributors | 400,000 | |
Top of range [member] | ||
Disclosure Of ACCRUED LIABILITIES AND OTHER PAYABLES [Line Items] | ||
Deposits received from distributors | ¥ 1,000,000 |
RIGHT-OF-USE ASSETS AND LEASE_3
RIGHT-OF-USE ASSETS AND LEASES LIABILITIES (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
Right of Use [Line Items] | ||||
Carrying amounts of right-of-use assets | ¥ 0 | ¥ 32,619 | ¥ 32,619 | ¥ 17,266 |
Depreciation charge of right-of-use assets | 12,187 | 0 | 0 | |
Interest expense | 315 | 0 | 0 | |
Total cash outflow in financing activities for leases | 13,902 | ¥ 0 | ¥ 0 | |
Right-of-use assets [member] | ||||
Right of Use [Line Items] | ||||
Carrying amounts of right-of-use assets | 5,078 | ¥ 17,266 | ||
Depreciation charge of right-of-use assets | 12,187 | |||
Interest expense | ¥ 315 |
INTEREST- BEARING BANK BORROW_3
INTEREST- BEARING BANK BORROWINGS (SECURED) (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
INTEREST- BEARING BANK BORROWINGS (SECURED) | ||
Short-term bank borrowings - repayable within one year - shown under current liabilities | ¥ 0 | ¥ 0 |
Long-term bank borrowings - repayable more than one year but not more than 5 years - shown under non-current liabilities | 0 | 0 |
Total debt | ¥ 36,217 | ¥ 36,203 |
INTEREST- BEARING BANK BORROW_4
INTEREST- BEARING BANK BORROWINGS (SECURED) - Bank borrowings are denominated in currencies (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of INTEREST- BEARING BANK BORROWINGS SECURED [Line Items] | ||
Borrowings | ¥ 36,217 | ¥ 36,203 |
Renminbi | ||
Disclosure Of INTEREST- BEARING BANK BORROWINGS SECURED [Line Items] | ||
Borrowings | 0 | 0 |
US dollars | ||
Disclosure Of INTEREST- BEARING BANK BORROWINGS SECURED [Line Items] | ||
Borrowings | ¥ 0 | ¥ 0 |
INTEREST- BEARING BANK BORROW_5
INTEREST- BEARING BANK BORROWINGS (SECURED) - The exposure of the Company's loans (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of INTEREST- BEARING BANK BORROWINGS SECURED [Line Items] | ||
Borrowings | ¥ 36,217 | ¥ 36,203 |
Fixed rate borrowings | ||
Disclosure Of INTEREST- BEARING BANK BORROWINGS SECURED [Line Items] | ||
Borrowings | ¥ 0 | ¥ 0 |
Variable rate borrowings | ||
Disclosure Of INTEREST- BEARING BANK BORROWINGS SECURED [Line Items] | ||
Borrowings, interest rate | 0.00% | 0.00% |
Borrowings | ¥ 0 | ¥ 0 |
INTEREST- BEARING BANK BORROW_6
INTEREST- BEARING BANK BORROWINGS (SECURED) - Undrawn bank borrowing facilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
INTEREST- BEARING BANK BORROWINGS (SECURED) | ||
Variable-rate - expiring within one year | ¥ 0 | ¥ 0 |
SHARE CAPITAL- Classes of Share
SHARE CAPITAL- Classes of Share Capital (Details) ¥ in Thousands, $ in Thousands | 2 Months Ended | 12 Months Ended | |||||||
Feb. 28, 2019USD ($)shares | Feb. 28, 2019CNY (¥)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2018CNY (¥)shares | ||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||
Number of shares authorised | 51,000,000 | 51,000,000 | |||||||
Issued capital | $ 45,000 | ¥ 306 | [1] | $ 45,000 | ¥ 306 | [1] | ¥ 206 | ||
Issuance of new shares | ¥ | 67 | 97 | |||||||
Warrants exercised into shares | ¥ | 1,716 | ||||||||
Equity compensation | ¥ | 5 | 3 | |||||||
Issued capital | 58,000 | ¥ 397 | [2] | $ 45,000 | ¥ 306 | [1] | |||
Value of Shares authorised | $ | $ 400 | $ 400 | |||||||
Balance | 5,678,703 | 5,678,703 | 5,678,703 | 5,678,703 | 3,851,485 | 3,851,485 | |||
Issuance of new shares (in shares) | 1,200,000 | 1,770,299 | |||||||
Warrants exercised into shares (in shares) | 333,420 | 333,420 | |||||||
Equity compensation (in shares) | 94,862 | 94,862 | 56,919 | 56,919 | |||||
Ending Balance (in shares) | 7,306,985 | 7,306,985 | 5,678,703 | 5,678,703 | |||||
Share capital [member] | |||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||
Warrants exercised into shares | ¥ | ¥ 19 | ¥ 0 | |||||||
Warrants exercised into shares (in shares) | 333,420 | 333,420 | 0 | 0 | |||||
[1] | (1) Equivalent to US$45,000 | ||||||||
[2] | (2) Equivalent to US$58,000 |
SHARE CAPITAL- Principal assump
SHARE CAPITAL- Principal assumptions used in the valuation (Details) | Dec. 18, 2019CNY (¥)$ / shares | Dec. 16, 2019$ / shares | Dec. 04, 2018USD ($)$ / shares | Nov. 21, 2007$ / shares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥)$ / shares |
Disclosure Of SHARE CAPITAL [Line Items] | ||||||
Grant date | December 18, 2019 | December 4, 2018 | ||||
Share price at date of grant | 0.68 | 1.18 | 1,260,000 | 550,000 | ||
Exercise price | $ 0.9375 | $ 7.50 | ||||
Volatility | 141.00% | 168.00% | ||||
Warrant life | 5 years | 5 years | 5 years | |||
Dividend yield | 0.00% | 0.00% | ||||
Risk-free interest rate | 1.74% | 2.63% | ||||
Fair value at grant date | ¥ 0.598 | $ 1.45 | ||||
Bottom of range [member] | ||||||
Disclosure Of SHARE CAPITAL [Line Items] | ||||||
Exercise price | ¥ 0.82 | $ 1.27 | ||||
Top of range [member] | ||||||
Disclosure Of SHARE CAPITAL [Line Items] | ||||||
Exercise price | ¥ 0.9375 | $ 1.5875 | $ 1.5875 |
SHARE CAPITAL- Summary of warra
SHARE CAPITAL- Summary of warrant activity (Details) | Dec. 18, 2019$ / shares | Dec. 04, 2018USD ($) | Dec. 31, 2019CNY (¥)$ / shares | Dec. 31, 2018CNY (¥)$ / shares | Dec. 31, 2017CNY (¥)$ / shares |
SHARE CAPITAL | |||||
Outstanding at the beginning | ¥ | 742,857 | 192,857 | |||
Exercisable at the beginning | ¥ | 742,857 | 192,857 | |||
Granted | 0.68 | 1.18 | 1,260,000 | 550,000 | |
Exercised | ¥ | 333,420 | 0 | |||
Forfeited | ¥ | 0 | 0 | |||
Expired | ¥ | 0 | 0 | |||
Outstanding at the end | ¥ | 1,669,437 | 742,857 | 192,857 | ||
Exercisable at the end | ¥ | 1,669,437 | 742,857 | 192,857 | ||
Weighted average exercise price of other equity instruments outstanding at beginning of period | $ 2.58 | $ 6.24 | |||
Weighted average exercise price of other equity instruments exercisable at beginning of period | 2.58 | 6.24 | |||
Weighted average exercise price, Granted | 0.83 | 1.30 | |||
Weighted average exercise price, Exercised | 1.30 | 0 | |||
Weighted average exercise price, Forfeited | 0 | 0 | |||
Weighted average exercise price, Expired | 0 | 0 | |||
Weighted average exercise price of other equity instruments outstanding at end of period | 1.52 | 2.58 | $ 6.24 | ||
Weighted average exercise price of other equity instruments exercisable at end of period | $ 1.52 | $ 2.58 | $ 6.24 | ||
Weighted average remaining contractual term, exercisable at the end (in years) | 4 years 4 months 17 days | 4 years 2 months 9 days | 3 years 1 month 2 days | ||
Weighted average remaining contractual term, Granted | 5 years | 5 years | |||
Weighted average remaining contractual term, outstanding at the end (in years) | 4 years 4 months 17 days | 4 years 2 months 9 days | 3 years 1 month 2 days |
SHARE CAPITAL- Additional infor
SHARE CAPITAL- Additional information (Details) | Dec. 18, 2019$ / shares | Dec. 16, 2019USD ($)$ / sharesshares | Dec. 16, 2019CNY (¥)shares | Apr. 19, 2019USD ($)shares | Apr. 19, 2019CNY (¥)shares | Dec. 04, 2018$ / shares | Nov. 29, 2018USD ($)shares | Nov. 29, 2018CNY (¥)shares | Jul. 18, 2017USD ($)$ / sharesshares | Apr. 04, 2017shares | Apr. 03, 2017USD ($)$ / shares | Jun. 28, 2016$ / sharesshares | Feb. 04, 2016USD ($)$ / sharesshares | Apr. 03, 2012shares | Apr. 07, 2011shares | Nov. 24, 2010CNY (¥)shares | Sep. 01, 2010shares | May 25, 2010USD ($)$ / sharesshares | May 25, 2010CNY (¥)shares | May 24, 2010shares | Nov. 20, 2009CNY (¥)shares | Nov. 21, 2007USD ($)$ / sharesshares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2019$ / shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2016CNY (¥) | Jun. 27, 2016shares | Apr. 30, 2012shares | Nov. 24, 2010$ / shares | Nov. 20, 2009$ / sharesshares | Jun. 30, 2009$ / shares | May 29, 2009$ / shares |
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of shares issued | 1,200,000 | 1,200,000 | 1,428,571 | 11,779,649 | 1,000,000 | ||||||||||||||||||||||||||||||||
Equity, Reverse Stock Split | 0.125 | ||||||||||||||||||||||||||||||||||||
Exercise price, share options granted | $ / shares | $ 0.9375 | $ 7.50 | |||||||||||||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 0.75 | $ 0.63 | $ 10 | $ 1.27 | |||||||||||||||||||||||||||||||||
Number of shares outstanding | 2,700,000 | 14,553,949 | 3,200,000 | 3,851,485 | 3,851,485 | 7,306,985 | 5,678,703 | 21,900,000 | |||||||||||||||||||||||||||||
Contingent shares | 3,000,000 | ||||||||||||||||||||||||||||||||||||
Aggregate shares purchased | 11,193,149 | ||||||||||||||||||||||||||||||||||||
Purchase Price of shares | ¥ | ¥ 752,200,000 | ||||||||||||||||||||||||||||||||||||
Number of shares forfeited | 1,600,000 | ||||||||||||||||||||||||||||||||||||
Warrant, Number of Securities Called by Warrants or Rights | 1,200,000 | 114,286 | 2,944,904 | 50,000 | |||||||||||||||||||||||||||||||||
Gross Proceeds from pricing of public offering | ¥ 900,000 | $ 1,270,000 | ¥ 8,732,000 | $ 900,000 | |||||||||||||||||||||||||||||||||
Proceeds from pricing of public offering | 1,070,000 | 7,332,000 | $ 785,000 | ||||||||||||||||||||||||||||||||||
Percentage of gross proceeds of offering | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | ||||||||||||||||||||||||||||||||
Payment of placement fee | $ | $ 72,000 | $ 71,999 | |||||||||||||||||||||||||||||||||||
Payment of non-accountable expense allowance | $ | $ 45,000 | $ 25,000 | |||||||||||||||||||||||||||||||||||
Percentage of aggregate number of shares sold in offering | 5.00% | 5.00% | 8.00% | ||||||||||||||||||||||||||||||||||
Minimum bid price | $ / shares | $ 1 | ||||||||||||||||||||||||||||||||||||
Closing bid price | $ / shares | $ 1 | ||||||||||||||||||||||||||||||||||||
Fair value of shares issued | ¥ | ¥ 627,000 | ¥ 619,000 | |||||||||||||||||||||||||||||||||||
Proceeds from issue of ordinary shares | $ 128,000,000,000 | ¥ 5,033,000 | ¥ 15,262,000 | ¥ 9,537,000 | |||||||||||||||||||||||||||||||||
Equity | ¥ | ¥ 694,736,000 | ¥ 694,736,000 | ¥ 272,893,000 | ¥ 276,018,000 | ¥ 772,449,000 | ||||||||||||||||||||||||||||||||
Aggregate the number of share sale | 770,299 | 770,299 | 27,394 | ||||||||||||||||||||||||||||||||||
Purchase price of per share | ¥ | ¥ 1.56 | ||||||||||||||||||||||||||||||||||||
Proceeds from offering | $ 748,000 | $ 1,200,000 | 7,952,000 | ||||||||||||||||||||||||||||||||||
Commission and legal expenses | $ 203,600 | ¥ 1,400,000 | |||||||||||||||||||||||||||||||||||
Number of shares issued | 1,200,000 | 1,770,299 | |||||||||||||||||||||||||||||||||||
Aggregate of warrants | 500,000 | 500,000 | 94,862 | 56,919 | 56,919 | ||||||||||||||||||||||||||||||||
Warrants exercise price per share | $ / shares | $ 0.82 | 1.27 | |||||||||||||||||||||||||||||||||||
Legal and other expenses | $ | $ 45,000 | ||||||||||||||||||||||||||||||||||||
Fair value of other than equity instrument warrant granted | ¥ | ¥ 5,250,000 | ¥ 4,955,000 | |||||||||||||||||||||||||||||||||||
Shares issued | 1,200,000 | 1,200,000 | 1,428,571 | 11,779,649 | 1,000,000 | ||||||||||||||||||||||||||||||||
Purchase price | $ / shares | $ 0.75 | $ 0.63 | $ 10 | 1.27 | |||||||||||||||||||||||||||||||||
Warrants sold | 1,200,000 | 114,286 | 2,944,904 | 50,000 | |||||||||||||||||||||||||||||||||
Gross proceeds for sale of common shares and warrants | ¥ 900,000 | $ 1,270,000 | ¥ 8,732,000 | $ 900,000 | |||||||||||||||||||||||||||||||||
Warrants term | 5 years | 5 years | 5 years | 5 years | |||||||||||||||||||||||||||||||||
Warrants exercisable term | 6 months | 6 months | |||||||||||||||||||||||||||||||||||
Net proceeds for sale of common shares and warrants after deducting certain fees due to the placement agent and the Company's estimated transaction expenses | $ 748,000 | $ 1,200,000 | ¥ 7,952,000 | ||||||||||||||||||||||||||||||||||
Payment of placement fee | $ | 72,000 | 71,999 | |||||||||||||||||||||||||||||||||||
Maximum other expenses of the Placement Agent | $ | $ 45,000 | $ 25,000 | |||||||||||||||||||||||||||||||||||
Fair value of the warrants granted to investors and placement agent | ¥ | ¥ 5,250,000 | ¥ 4,955,000 | |||||||||||||||||||||||||||||||||||
Authorised capital [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Par value per share | $ / shares | $ 0.001 | $ 0.008 | |||||||||||||||||||||||||||||||||||
Convertible note [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Notional amount | $ | $ 631,579 | ||||||||||||||||||||||||||||||||||||
Percentage of discount on convertible note | 5.00% | ||||||||||||||||||||||||||||||||||||
Debt instrument, original amount | $ | $ 600,000 | ||||||||||||||||||||||||||||||||||||
Percentage of weighted average price | 85.00% | ||||||||||||||||||||||||||||||||||||
Floor price of share | $ / shares | $ 1 | ||||||||||||||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 369,626 | ||||||||||||||||||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Exercise price, share options granted | $ / shares | $ 1 | $ 1 | |||||||||||||||||||||||||||||||||||
Proceeds from exercise of options | $ | $ 2,750,000 | ||||||||||||||||||||||||||||||||||||
Aggregate shares purchased | 996,051 | 996,051 | |||||||||||||||||||||||||||||||||||
Purchase Price of shares | $ 996,051 | ¥ 6,803,000 | |||||||||||||||||||||||||||||||||||
Number of warrants issued | 2,750,000 | ||||||||||||||||||||||||||||||||||||
Class A Warrant [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Exercise price, share options granted | $ / shares | $ 0.63 | ||||||||||||||||||||||||||||||||||||
Warrant, Number of Securities Called by Warrants or Rights | 1,428,571 | ||||||||||||||||||||||||||||||||||||
Warrants sold | 1,428,571 | ||||||||||||||||||||||||||||||||||||
Class B Warrant [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Exercise price, share options granted | $ / shares | $ 0.78 | ||||||||||||||||||||||||||||||||||||
Warrant, Number of Securities Called by Warrants or Rights | 1,428,571 | ||||||||||||||||||||||||||||||||||||
Warrants sold | 1,428,571 | ||||||||||||||||||||||||||||||||||||
IPO [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of shares issued | 12,800,000 | ||||||||||||||||||||||||||||||||||||
Shares issued | 12,800,000 | ||||||||||||||||||||||||||||||||||||
Over-Allotment Option [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of shares issued | 800,000 | ||||||||||||||||||||||||||||||||||||
Par value per share | $ / shares | $ 0.001 | ||||||||||||||||||||||||||||||||||||
Shares issued | 800,000 | ||||||||||||||||||||||||||||||||||||
underwritten public offering [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of shares issued | 3,350,000 | ||||||||||||||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 7.75 | ||||||||||||||||||||||||||||||||||||
Gross proceeds from issuing shares | ¥ | ¥ 172,700,000 | ||||||||||||||||||||||||||||||||||||
Proceeds from issuing shares | ¥ | ¥ 159,600,000 | ||||||||||||||||||||||||||||||||||||
Shares issued | 3,350,000 | ||||||||||||||||||||||||||||||||||||
Purchase price | $ / shares | $ 7.75 | ||||||||||||||||||||||||||||||||||||
Private Placement [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of shares issued | 633,526 | 27,394 | |||||||||||||||||||||||||||||||||||
Share issued price per share | $ / shares | $ 1.36 | ||||||||||||||||||||||||||||||||||||
Proceeds from issuing shares | $ | $ 861,595 | ||||||||||||||||||||||||||||||||||||
Fair value of shares issued | ¥ | ¥ 294,000 | ||||||||||||||||||||||||||||||||||||
Shares issued | 633,526 | 27,394 | |||||||||||||||||||||||||||||||||||
Purchase price | $ / shares | $ 1.36 | ||||||||||||||||||||||||||||||||||||
Bottom of range [member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Exercise price, share options granted | $ / shares | $ 0.82 | $ 1.27 | |||||||||||||||||||||||||||||||||||
Bottom of range [member] | Convertible note [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument conversion price per share | $ / shares | 1.1828 | ||||||||||||||||||||||||||||||||||||
Top of range [member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Exercise price, share options granted | $ / shares | $ 0.9375 | $ 1.5875 | $ 1.5875 | ||||||||||||||||||||||||||||||||||
Top of range [member] | Convertible note [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument conversion price per share | $ / shares | $ 1.9355 | ||||||||||||||||||||||||||||||||||||
Mr. Wong Kung Tok [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of shares issued | 2,176,836 | 1,794,800 | 1,214,127 | ||||||||||||||||||||||||||||||||||
Par value per share | $ / shares | $ 1 | ||||||||||||||||||||||||||||||||||||
Shares issued | 2,176,836 | 1,794,800 | 1,214,127 | ||||||||||||||||||||||||||||||||||
Success Winner Limited [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Number of shares outstanding | 8,950,171 | ||||||||||||||||||||||||||||||||||||
Contingent shares | 8,185,763 | ||||||||||||||||||||||||||||||||||||
Business combination, consideration, exchange price of share | $ / shares | $ 10 | ||||||||||||||||||||||||||||||||||||
Business combination, consideration, number of outstanding shares acquired | 5,743,320 | ||||||||||||||||||||||||||||||||||||
Success Winner Limited [Member] | Released based on earnings [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Contingent shares | 5,185,763 | ||||||||||||||||||||||||||||||||||||
Success Winner Limited [Member] | Released based on share price targets [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Contingent shares | 3,000,000 | ||||||||||||||||||||||||||||||||||||
Success Winner Limited [Member] | Mr. Wong Kung Tok [Member] | |||||||||||||||||||||||||||||||||||||
Disclosure Of SHARE CAPITAL [Line Items] | |||||||||||||||||||||||||||||||||||||
Par value per share | $ / shares | $ 1 |
RESERVES (Details)
RESERVES (Details) ¥ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018shares | Jun. 30, 2009HKD ($) | Jun. 30, 2009CNY (¥) | |
Disclosure Of RESERVES [Line Items] | ||||
Capital reserve | ¥ 61.3 | |||
Escrow deposits | ¥ 6.7 | |||
Percentage of entity's revenue | 10.00% | |||
Number of shares issued | shares | 1,200,000 | 1,770,299 | ||
Two financial advisors [Member] | ||||
Disclosure Of RESERVES [Line Items] | ||||
Number of shares issued | shares | 1,521,528 | |||
Mr. Wong Kung Tok [Member] | ||||
Disclosure Of RESERVES [Line Items] | ||||
Amounts payable, related party transactions | ¥ 40.2 | $ 67.9 | ¥ 58.9 | |
Forego of claim in deposits | 15.6 | |||
Sound Treasure Limited [Member] | ||||
Disclosure Of RESERVES [Line Items] | ||||
Amounts payable, related party transactions | 20.7 | |||
Forego of claim in deposits | 15.6 | |||
Extinguishment of liability | ¥ 76.8 | |||
Top of range [member] | ||||
Disclosure Of RESERVES [Line Items] | ||||
Percentage of entity's revenue | 50.00% |
DIVIDENDS (Details)
DIVIDENDS (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | Jan. 14, 2015USD ($)$ / shares | Jan. 14, 2015CNY (¥)¥ / shares | Jul. 14, 2014¥ / shares | Jul. 14, 2014$ / shares | Jan. 14, 2014$ / shares | Jan. 14, 2014USD ($) | Jan. 14, 2014CNY (¥)¥ / shares | Jul. 13, 2013$ / shares | Jul. 13, 2013¥ / shares | Jan. 01, 2008 |
DIVIDENDS | ||||||||||
Dividends paid, ordinary shares per share | (per share) | $ 0.0125 | ¥ 0.08 | ¥ 0.08 | $ 0.0125 | $ 0.10 | ¥ 0.61 | $ 0.10 | ¥ 0.61 | ||
Dividends paid, classified as financing activities | $ 500 | ¥ 3,200 | $ 4,100 | ¥ 24,900 | ||||||
Dividend paid after withhold tax | ¥ 3,010 | $ 23,660 | ||||||||
Dividend withholding tax rate | 5.00% | 5.00% | 5.00% | 5.00% | 5.00% | 10.00% |
SHARE-BASED EMPLOYEE REMUNERA_2
SHARE-BASED EMPLOYEE REMUNERATION - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019CNY (¥) | |
Disclosure Of SHARE-BASED EMPLOYEE REMUNERATION [Line Items] | ||||
Number of share options granted in share-based payment arrangement | 94,862 | 56,919 | 27,394 | |
Fair value of share options granted | ¥ 627,000 | ¥ 619,000 | ¥ 294,000 | ¥ 627,000 |
Equity Compensation Plan 2017 [Member] | ||||
Disclosure Of SHARE-BASED EMPLOYEE REMUNERATION [Line Items] | ||||
Number of share options granted in share-based payment arrangement | 280,000 |
SIGNIFICANT RELATED PARTY TRA_3
SIGNIFICANT RELATED PARTY TRANSACTIONS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of SIGNIFICANT RELATED PARTY TRANSACTIONS [Line Items] | |||
Amounts owed to related parties | ¥ 36,217 | ||
Current payables to related parties, Total | 36,217 | ¥ 36,203 | |
Stuart Management Co [Member] | |||
Disclosure Of SIGNIFICANT RELATED PARTY TRANSACTIONS [Line Items] | |||
Amounts owed to related parties | 0 | 0 | |
Service fees accrued to Stuart Management Co. | ¥ 0 | ¥ 40 | ¥ 81 |
SIGNIFICANT RELATED PARTY TRA_4
SIGNIFICANT RELATED PARTY TRANSACTIONS - Additional Information (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
Oct. 31, 2014USD ($) | Oct. 31, 2014CNY (¥) | Dec. 31, 2013USD ($) | Dec. 31, 2013CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Disclosure Of SIGNIFICANT RELATED PARTY TRANSACTIONS [Line Items] | ||||||||||||
Reduction in service agreement charges | $ 1,000 | ¥ 6,000 | $ 4,900 | ¥ 30,000 | ||||||||
Borrowings | ¥ 36,217,000 | ¥ 36,203,000 | ||||||||||
Stuart Management Co [Member] | ||||||||||||
Disclosure Of SIGNIFICANT RELATED PARTY TRANSACTIONS [Line Items] | ||||||||||||
Payment of administrative services | $ 6,000 | ¥ 40,000 | $ 12,000 | ¥ 81,000 | ||||||||
Wong Kung Tok [Member] | ||||||||||||
Disclosure Of SIGNIFICANT RELATED PARTY TRANSACTIONS [Line Items] | ||||||||||||
Proceeds from borrowings, classified as financing activities | ¥ 35,057,000 | ¥ 35,057,000 | ||||||||||
Sound Treasure Limited [Member] | ||||||||||||
Disclosure Of SIGNIFICANT RELATED PARTY TRANSACTIONS [Line Items] | ||||||||||||
Borrowings | $ 167,000 | $ 167,000 | ¥ 1,160,000 | ¥ 1,146,000 |
COMMITMENTS - Operating lease c
COMMITMENTS - Operating lease commitments (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of commitments [Line Items] | |||
Operating lease commitments | ¥ 5,792 | ¥ 19,694 | ¥ 33,596 |
Within one year | |||
Disclosure of commitments [Line Items] | |||
Operating lease commitments | 5,792 | 13,902 | 13,902 |
After one year and within five years | |||
Disclosure of commitments [Line Items] | |||
Operating lease commitments | ¥ 0 | ¥ 5,792 | ¥ 19,694 |
COMMITMENTS - Capital commitmen
COMMITMENTS - Capital commitments expenditures contracted (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Other property, plant and equipment [member] | |||
Disclosure of commitments [Line Items] | |||
Authorised capital commitments but not contracted for | ¥ 0 | ¥ 0 | ¥ 0 |
Chengdu Future | |||
Disclosure of commitments [Line Items] | |||
Contractual capital commitments | ¥ 30,000,000 | ¥ 0 | ¥ 0 |
COMMITMENTS - Other commitments
COMMITMENTS - Other commitments (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
COMMITMENTS | |||
Advertising expenditure contracted but not provided for in the financial statements | ¥ 0 | ¥ 0 | ¥ 1,670 |
FINANCIAL RISK MANAGEMENT - Liq
FINANCIAL RISK MANAGEMENT - Liquidity risk (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Disclosure Of financial risk management [Line Items] | ||
Trade payables | ¥ 22,577 | ¥ 24,329 |
Amounts owed to related parties | 36,217 | |
Interest-bearing bank borrowings | 0 | 0 |
Total | 58,794 | 60,532 |
Within one year | ||
Disclosure Of financial risk management [Line Items] | ||
Trade payables | 22,577 | 24,329 |
Amounts owed to related parties | 36,217 | 36,203 |
Interest-bearing bank borrowings | 0 | 0 |
Total | 58,794 | 60,532 |
More than 1 year but less than 3 years [member] | ||
Disclosure Of financial risk management [Line Items] | ||
Trade payables | 0 | 0 |
Amounts owed to related parties | 0 | 0 |
Interest-bearing bank borrowings | 0 | 0 |
Total | 0 | 0 |
Total contractual undiscounted cash flow [member] | ||
Disclosure Of financial risk management [Line Items] | ||
Trade payables | 22,577 | 24,329 |
Amounts owed to related parties | 36,217 | 36,203 |
Interest-bearing bank borrowings | 0 | 0 |
Total | ¥ 58,794 | ¥ 60,532 |
FINANCIAL RISK MANAGEMENT - Sen
FINANCIAL RISK MANAGEMENT - Sensitivity analysis (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure Of financial risk management [Line Items] | |||
Loss before taxation | ¥ 9,445 | ¥ 418,465 | ¥ 78,285 |
Currency risk [member] | |||
Disclosure Of financial risk management [Line Items] | |||
Loss before taxation | ¥ 414 | ¥ 353 | ¥ 86 |
CAPITAL MANAGEMENT (Details)
CAPITAL MANAGEMENT (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
CAPITAL MANAGEMENT | ||||
Interest-bearing bank borrowings | ¥ 0 | ¥ 0 | ||
Amounts owed to related parties | 36,217 | |||
Total debt | 36,217 | 36,203 | ||
Less: Cash and cash equivalents (excluding restricted bank balances) | (8,212) | (9,016) | ¥ (2,328) | ¥ (110) |
Net debts | 28,005 | 27,187 | ||
Equity attributable to shareholders of the Company | ¥ 272,496 | ¥ 275,712 | ||
Gearing ratio | 10.30% | 9.90% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - CNY (¥) | Jan. 08, 2020 | Dec. 31, 2019 |
Disclosure of non-adjusting events after reporting period [line items] | ||
Value of shares to be issued | ¥ 6,266,000 | |
Offering | ||
Disclosure of non-adjusting events after reporting period [line items] | ||
Value of shares to be issued | ¥ 500,000 | |
Price per share | ¥ 0.75 | |
Registration period of offering | 270 days | |
Discounts or brokerage fees associated with Offering | ¥ 0 |