Document and Entity Information
Document and Entity Information | 12 Months Ended |
Mar. 31, 2019shares | |
Document and Entity Information | |
Entity Registrant Name | Hexindai Inc. |
Entity Central Index Key | 0001702318 |
Document Type | 20-F |
Document Period End Date | Mar. 31, 2019 |
Amendment Flag | false |
Current Fiscal Year End Date | --03-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 49,204,083 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Shell Company | false |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 57,372,128 | $ 132,622,467 |
Accounts receivable and contract assets | 418,639 | |
Loans receivable-current, net of provision for loan losses | 36,554,913 | 28,696,234 |
Interest receivable | 555,502 | |
Prepayments and other assets | 3,334,965 | 1,248,562 |
TOTAL CURRENT ASSETS | 97,680,645 | 163,122,765 |
Loans receivable- non-current, net of provision for loan losses | 39,810,461 | |
Long term investments | 30,789,836 | |
Property, equipment and software, net | 1,253,723 | 767,087 |
Deferred tax assets | 3,721,177 | |
TOTAL ASSETS | 173,255,842 | 163,889,852 |
CURRENT LIABILITIES: | ||
Accrued expenses and other current liabilities | 2,791,099 | 3,786,955 |
Consideration payable | 14,289,371 | |
Deferred revenue-current | 110,726 | |
Taxes payable | 9,371,530 | 20,059,828 |
TOTAL CURRENT LIABILITIES | 26,562,726 | 23,846,783 |
Note payable | 20,000,000 | |
Deferred revenue-non-current | 189,958 | |
TOTAL LIABILITIES | 46,752,684 | 23,846,783 |
COMMITMENTS AND CONTINGENCIES (Note 20) | ||
SHAREHOLDERS' EQUITY: | ||
Ordinary shares (US$0.0001 par value; 500,000,000 shares authorized, 49,625,303 and 47,958,550 shares issued as of March 31, 2019 and 2018; 49,204,083 and 47,958,550 shares outstanding as of March 31, 2019 and 2018, respectively) | 4,963 | 4,796 |
Additional paid-in capital | 59,806,865 | 58,417,971 |
Treasury stock (421,220 and nil shares as of March 31, 2019 and 2018, respectively) | (1,320,468) | |
Retained earnings | 69,768,756 | 77,241,073 |
Accumulated other comprehensive (loss) income | (1,756,958) | 4,379,229 |
TOTAL SHAREHOLDERS' EQUITY | 126,503,158 | 140,043,069 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 173,255,842 | $ 163,889,852 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Ordinary shares, par value (in US dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued (in shares) | 49,625,303 | 47,958,550 |
Ordinary shares, shares outstanding (in shares) | 49,204,083 | 47,958,550 |
Treasury stock (in shares) | 421,220 | 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
REVENUE | |||
REVENUE | $ 82,613,764 | $ 123,318,661 | $ 29,594,871 |
Tax and surcharges | (773,382) | (890,414) | (171,862) |
Net Revenue | 61,330,504 | 107,257,841 | 22,920,543 |
OPERATING COSTS AND EXPENSES | |||
Service and development | 7,396,835 | 8,495,768 | 5,149,265 |
Sales and marketing | 32,322,003 | 15,241,637 | 5,212,127 |
General and administrative | 9,928,512 | 5,816,130 | 2,645,605 |
Share-based compensation | 6,585,386 | 1,828,868 | 0 |
Total operating costs and expenses | 56,232,736 | 31,382,403 | 13,006,997 |
INCOME FROM OPERATIONS | 5,097,768 | 75,875,438 | 9,913,546 |
OTHER INCOME (EXPENSE) | |||
Other income | 2,336,015 | 683,393 | 198,624 |
Other expense | (28,530) | (22,516) | (19,095) |
Total other income, net | 2,307,485 | 660,877 | 179,529 |
INCOME BEFORE INCOME TAXES | 7,405,253 | 76,536,315 | 10,093,075 |
INCOME TAXES EXPENSES | 1,872,672 | 11,025,690 | 1,522,211 |
NET INCOME | 5,532,581 | 65,510,625 | 8,570,864 |
Less: net income attributable to non-controlling interest | 28,652 | ||
NET INCOME ATTRIBUTABLE TO HEXINDAI'S SHAREHOLDERS | 5,532,581 | 65,481,973 | 8,570,864 |
OTHER COMPREHENSIVE (LOSS) INCOME | |||
Foreign currency translation adjustment | (6,136,187) | 6,028,143 | (1,080,036) |
COMPREHENSIVE (LOSS) INCOME | (603,606) | 71,538,768 | 7,490,828 |
Less: comprehensive income attributable to non-controlling interest | 132,814 | ||
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO HEXINDAI'S SHARESHOLDERS | $ (603,606) | $ 71,405,954 | $ 7,490,828 |
Net income per share attributable to Hexindai's shareholders | |||
Basic (in dollars per share) | $ 0.11 | $ 1.46 | $ 0.20 |
Diluted (in dollars per share) | $ 0.10 | $ 1.37 | $ 0.20 |
Weighted average shares used in calculation of net income per share | |||
Basic (in shares) | 48,693,162 | 44,977,780 | 42,331,200 |
Diluted (in shares) | 52,912,826 | 47,656,263 | 42,331,200 |
Loan facilitation, post-origination and other service | |||
REVENUE | |||
REVENUE | $ 58,550,903 | $ 107,558,133 | $ 23,092,405 |
Interest | |||
REVENUE | |||
REVENUE | $ 3,552,983 | $ 590,122 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common stockPrivate placement offering | Common stockIPO | Common stock | Additional Paid-in capitalPrivate placement offering | Additional Paid-in capitalIPO | Additional Paid-in capital | Treasury stock | Retained Earnings | Accumulated Other Comprehensive (Loss) income | Noncontrolling interests | Private placement offering | IPO | Total |
Balance at the beginning of the year at Mar. 31, 2016 | $ 4,208 | $ 11,284,230 | $ 3,188,236 | $ (464,717) | $ 14,011,957 | ||||||||
Balance at the beginning of the year (in shares) at Mar. 31, 2016 | 42,080,000 | ||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||||||||
Proceeds from issuance of shares | $ 84 | $ 2,000,000 | $ 2,000,084 | ||||||||||
Proceeds from issuance of shares (in shares) | 841,600 | ||||||||||||
Shareholders' contribution | 1,487 | 1,487 | |||||||||||
Net income for the year | 8,570,864 | 8,570,864 | |||||||||||
Foreign currency translation adjustment | (1,080,036) | (1,080,036) | |||||||||||
Balance at the end of the year at Mar. 31, 2017 | $ 4,292 | 13,285,717 | 11,759,100 | (1,544,753) | 23,504,356 | ||||||||
Balance at the end of the year (in shares) at Mar. 31, 2017 | 42,921,600 | ||||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||||||||
Proceeds from issuance of shares | $ 504 | $ 43,273,198 | $ 43,273,702 | ||||||||||
Proceeds from issuance of shares (in shares) | 5,036,950 | ||||||||||||
Share-based compensation | 1,828,868 | 1,828,868 | |||||||||||
Capital contribution from non-controlling interest ("NCI") | $ 4,507,205 | 4,507,205 | |||||||||||
Net income for the year | 65,481,973 | 28,652 | 65,510,625 | ||||||||||
Foreign currency translation adjustment | 5,923,982 | 104,161 | 6,028,143 | ||||||||||
Purchase of shares from NCI | 30,188 | $ (4,640,018) | (4,609,830) | ||||||||||
Balance at the end of the year at Mar. 31, 2018 | $ 4,796 | 58,417,971 | 77,241,073 | 4,379,229 | $ 140,043,069 | ||||||||
Balance at the end of the year (in shares) at Mar. 31, 2018 | 47,958,550 | 47,958,550 | |||||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |||||||||||||
Impact on adoption of ASC 606 | 189,686 | $ 189,686 | |||||||||||
Adjusted Balance on April 1, 2018 | $ 4,796 | 58,417,971 | 77,430,759 | 4,379,229 | 140,232,755 | ||||||||
Share-based compensation | 6,585,386 | 6,585,386 | |||||||||||
Exercise of share options | $ 113 | 1,156,510 | 1,156,623 | ||||||||||
Exercise of share options (in shares) | 1,127,853 | ||||||||||||
Exercise of restricted stock unit ("RSU") | $ 54 | (54) | |||||||||||
Exercise of restricted stock unit ("RSU") (in shares) | 538,900 | ||||||||||||
Dividends to shareholders | (6,352,948) | (13,194,584) | (19,547,532) | ||||||||||
Repurchase of ordinary shares | $ (1,320,468) | (1,320,468) | |||||||||||
Repurchase of ordinary shares (in shares) | (421,220) | ||||||||||||
Net income for the year | 5,532,581 | 5,532,581 | |||||||||||
Foreign currency translation adjustment | (6,136,187) | (6,136,187) | |||||||||||
Balance at the end of the year at Mar. 31, 2019 | $ 4,963 | $ 59,806,865 | $ (1,320,468) | $ 69,768,756 | $ (1,756,958) | $ 126,503,158 | |||||||
Balance at the end of the year (in shares) at Mar. 31, 2019 | 49,625,303 | (421,220) | 49,204,083 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) | 1 Months Ended | 12 Months Ended |
Nov. 30, 2017 | Mar. 31, 2018 | |
IPO | ||
Offering costs | $ 7,100,000 | $ 7,095,798 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASHFLOWS - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 5,532,581 | $ 65,510,625 | $ 8,570,864 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 406,799 | 174,384 | 92,224 |
Loss on disposal of property, equipment and software | 4,613 | ||
Share-based compensation | 6,585,386 | 1,828,868 | |
Allowance for uncollectible loans receivable | 1,084,225 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable and contract assets | (418,639) | ||
Prepayments and other assets | (2,168,873) | 3,111,369 | (2,456,342) |
Deferred tax assets/liabilities | (3,724,082) | 415,623 | 135,641 |
Interest receivable | 519,601 | (525,914) | |
Accrued expenses and other current liabilities | (469,012) | 2,464,363 | (2,562,903) |
Taxes payable | (9,384,591) | 14,743,689 | 2,170,343 |
Deferred revenue | 300,917 | ||
Liabilities from risk reserve fund guarantee | 2,287,537 | ||
Amounts due to related parties | (47,620) | ||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (1,731,075) | 87,723,007 | 8,189,744 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Cash paid for loan originations | (123,535,640) | (34,714,361) | |
Cash received from loan repayments | 72,868,460 | 7,546,600 | |
Purchase of long term investments | (16,500,465) | ||
Proceeds from disposal of property, equipment and software | 5,901 | ||
Acquisitions of property, equipment and software | (944,813) | (456,030) | (287,765) |
NET CASH USED IN INVESTING ACTIVITIES | (68,106,557) | (27,623,791) | (287,765) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from IPO, net of offering costs | 43,273,702 | ||
Capital contributions by shareholders | 1,487 | ||
Capital contributions by NCI | 4,507,205 | ||
Purchase of shares from NCI | (4,609,830) | ||
Proceeds from private placement offering, net of offering cost | 2,000,000 | ||
Advances to related parties | (5,945,298) | ||
Repayments from related parties | 4,345,181 | 8,232,457 | |
Proceeds from exercise of share options | 1,156,623 | ||
Proceeds from issuance of unsecured note | 20,000,000 | ||
Dividends paid to shareholders | (19,547,532) | ||
Repurchase of ordinary shares | (1,320,468) | ||
Payments for offering cost | (318,000) | ||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (29,377) | 47,516,258 | 4,288,646 |
EFFECT OF EXCHANGE RATE CHANGE ON CASH | (5,383,330) | 5,774,718 | (777,286) |
NET (DECREASE) INCREASE IN CASH | (75,250,339) | 113,390,192 | 11,413,339 |
CASH AND CASH EQUIVALENTS - beginning of year | 132,622,467 | 19,232,275 | 7,818,936 |
CASH AND CASH EQUIVALENTS - end of year | 57,372,128 | 132,622,467 | 19,232,275 |
SUPPLEMENTAL CASH FLOW DISCLOSURES: | |||
Cash paid for income tax | 12,248,230 | $ 1,016,958 | 300,601 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||
Risk reserve liability balance paid to 3rd party insurance company by Hexin Group on behalf of the Company | $ 4,893,590 | ||
Purchase of long term investments included in consideration payable | $ 14,289,371 |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 12 Months Ended |
Mar. 31, 2019 | |
BUSINESS DESCRIPTION | |
BUSINESS DESCRIPTION | Note 1—BUSINESS DESCRIPTION Organization and description of business Hexindai Inc. is a limited company incorporated under the laws of the Cayman Islands on April 26, 2016. Hexindai Inc., its subsidiaries, its consolidated variable interest entities ("VIEs") and subsidiaries of the VIEs (the “Company”), is an online marketplace providing service in connecting borrowers and investors in the People's Republic of China (the "PRC"). The Company currently conducts its online consumer finance marketplace business in China through its subsidiaries and consolidated VIEs. Since August 2017, the Company started to engage in the micro-lending business by targeting borrowers in the PRC. Loans receivable represent loans originated by the Company, which are due from the qualified individual borrowers. As of March 31, 2019, the Company’s principal subsidiaries and consolidated VIEs are as follows: Date of Place of Percentage of incorporation incorporation legal ownership Principal activities Wholly owned subsidiaries Hexindai Hong Kong Limited ("HK Hexindai") May 17, 2016 Hong Kong 100% Investment holding Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") August 8, 2016 PRC 100% Provision of consultancy and information technology ("IT") support Tianjin Haohongyuan Technology Co., Ltd ("Tianjin Haohongyuan”) May 25, 2018 PRC 100% Provision of consultancy and IT support HX Asia Investment Limited June 25, 2018 BVI 100% Investment holding HX China Investment Limited January 16, 2019 BVI 100% Investment holding VIEs Hexin E-Commerce Co., Ltd ("Hexin E-Commerce") March 7, 2014 PRC Consolidated VIE Service for online marketplace connecting borrowers and investors Wusu Hexin Internet Small Loan Co., Ltd ("Wusu Company”)* August 28, 2017 PRC Consolidated VIE Provision of online micro-lending business Hexin E-Commerce’s subsidiaries Tianjin Qinghe E-Commerce Co., Ltd (“Tianjin Qinhe”) July 14, 2017 PRC Consolidated VIE Provision of consultancy and IT support Tianjin Bozhishuntai Technology Co., Ltd ("Tianjin Bozhishuntai”) October 27, 2017 PRC Consolidated VIE Provision of consultancy and IT support Horgos Qinhe Electronic Technology Co., Ltd (“Horgos Qinhe”) November 29, 2017 PRC Consolidated VIE Provision of consultancy and IT support Horgos Bozhishuntai Venture Capital Co., Ltd. ("Horgos Bozhishuntai”) November 28, 2017 PRC Consolidated VIE Investment Consultancy Trust 1 December 26,2018 PRC Consolidated Trust Host of beneficial right asset * Hexin E-commerce contributed RMB 500 million (US$74.5 million) to Wusu Company with its own funds. Reorganization In anticipation of an IPO of its equity securities, Hexindai Inc., its subsidiaries, its variable interest entities ("VIE") and its VIE's subsidiaries (collectively referred to as the “Company”) undertook a reorganization and became the ultimate holding company of HK Hexindai and WOFE, which were all controlled by the same shareholders before and after the Reorganization. Effective on November 1, 2016, shareholders of Hexin E-Commerce and WOFE entered into a series of contractual agreements ("VIE Agreements" which are described below). As a result, the Company, through its wholly owned subsidiaries HK Hexindai and WOFE, has been determined to be the primary beneficiary of Hexin E-Commerce and the Company treats Hexin E-Commerce as a VIE. Accordingly, the Company consolidates Hexin E-Commerce's operations, assets and liabilities. On September 15, 2017, the Company issued 42,814,296 ordinary shares pro-rata to the shareholders with identical shareholdings prior to issuance a retroactive basis similar to a share split, in accordance with SEC SAB Topic 4. Initial Public Offering In November 2017, the Company completed an IPO with new issuance of 5,036,950 American depositary shares (“ADS”) at US$10.00 per ADS for total offering size of approximately US$50.4 million before deducting commissions and expenses. The net proceeds from the IPO was approximately US$43.3 million, net of offering costs of US$7.1 million. Each ADS represents one ordinary share of the Company. The ADSs began trading on the NASDAQ Global Market on November 3, 2017 under the ticker symbol "HX". |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. Certain items in the consolidated statements of comprehensive income and cash flows have been reclassified to the current presentation. Basis of consolidation The accompanying consolidated financial statements include the financial statements of the Company, its subsidiaries, its consolidated VIEs and VIE’s subsidiaries for which the Company is the primary beneficiary. All inter-company transactions and balances have been eliminated upon consolidation. Consolidated VIEs The VIE arrangements regarding Hexin E-commerce Foreign ownership of internet-based businesses, including distribution of online information (such as an online marketplace connecting borrowers and investors), is subject to restrictions under current PRC laws and regulations. The Company is a Cayman Islands company and WOFE (its PRC subsidiary) is considered foreign invested enterprise. To comply with these regulations, the Company conducts the majority of its activities in the PRC through its VIE, Hexin E-Commerce. Hexin E-Commerce holds the requisite licenses and permits necessary to conduct the Company's online marketplace connecting borrowers and investors business. WOFE has entered into the following contractual arrangements with shareholders of Hexin E-Commerce, that enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of Hexin E-Commerce, and (2) receive the economic benefits of Hexin E-Commerce that could be significant to Hexin E-Commerce. The Company is fully and exclusively responsible for the management of Hexin E-Commerce, assumes all of risk of losses of Hexin E-Commerce and has the exclusive right to exercise all voting rights of Hexin E-Commerce's shareholder. Therefore, in accordance with ASC 810 "Consolidation", the Company is considered the primary beneficiary of Hexin E-Commerce and has consolidated Hexin E-Commerce's assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. Exclusive Business Cooperation Agreement On November 1, 2016, WOFE entered into an Exclusive Business Cooperation Agreement with Hexin E-Commerce to enable WOFE to receive substantially all of the assets and business of Hexin E-Commerce in the PRC. Under this Agreement, WOFE has the exclusive right to provide Hexin E-Commerce with comprehensive technical support, consulting services and other services during the term of this Agreement, including but not limited to software licensing; development, maintenance and update of software, network system, hardware and database; technical support and training for employees; consultancy on technology and market information; business management consultation; marketing and promotion services, etc. WOFE has the right to determine the fees associated with the services it provides based on the technical difficulty and complexity of the services, the actual labor costs it incurs for providing the services and some other factors during the relevant period. This Agreement became effective on November 1, 2016 and will remain effective unless otherwise terminated in writing by WOFE. Equity Interest Pledge Agreements Pursuant to the three Equity Interest Pledge Agreements dated November 1, 2016 among Hexin E-Commerce, each of the Shareholders of Hexin E-Commerce and WOFE, each Shareholder of Hexin E-Commerce agreed to pledge his equity interest in Hexin E-Commerce to WOFE to secure the performance of the VIEs' obligations under the Exclusive Business Cooperation Agreement and any such agreements to be entered into in the future. Shareholders of Hexin E-Commerce agreed not to transfer, sell, pledge, dispose of or otherwise create any encumbrance on their equity interests in Hexin E-Commerce without the prior written consent of WOFE. The Pledge became effective on such date when the pledge of the equity interest contemplated herein was registered with relevant administration for industry and commerce (the "AIC") and will remain effective until all contract obligations have been fully performed and all secured indebtedness have been fully paid. Exclusive Option Agreements Pursuant to the three Exclusive Option Agreements entered into on November 1, 2016 among WOFE, Hexin E-Commerce and each of the Shareholders of Hexin E-Commerce, each of the Shareholders of Hexin E-Commerce irrevocably grant WOFE an irrevocable and exclusive right to purchase, or designate one or more persons (including individuals, corporations, partnerships, partners, enterprises, trusts or non-corporate organizations) to purchase the equity interests in Hexin E-Commerce then held by such Shareholder of Hexin E-Commerce once or at multiple times at any time in part or in whole at WOFE's sole and absolute discretion to the extent permitted by Chinese laws at the price of RMB 1 or at the price of the minimum amount of consideration permitted by applicable the PRC law at the time when such purchase occurs. These three Agreements became effective on November 1, 2016 and will remain effective until all equity interests held by the shareholders of Hexin E-Commerce in Hexin E-Commerce have been transferred or assigned to WOFE and/or its designees. Loan Agreements Pursuant to the three Loan Agreements dated November 1, 2016 between each of the Shareholders of Hexin E‑Commerce and WOFE, WOFE agreed to lend each of the Shareholders of Hexin E‑Commerce a loan only to subscribe registered capital of Hexin E‑Commerce. The repayment of the loan shall be made by permitting WOFE to execute its exclusive right to purchase shares from the shareholders of Hexin E‑Commerce under the Exclusive Option Agreement as the repayment is equivalent with the consideration of the purchased shares. The term of these loans is 10 years from November 1, 2016, which may be extended upon mutual written consent of both parties. Power of Attorney On November 1, 2016, each Shareholder of Hexin E-Commerce, executed Power of Attorney agreement with WOFE and Hexin E-Commerce, whereby Shareholders of Hexin E-Commerce irrevocably appoint and constitute WOFE as their attorney-in-fact to exercise on the shareholders' behalf any and all rights that Shareholders of Hexin E-Commerce have in respect of their equity interests in Hexin E-Commerce. These three Power of Attorney documents became effective on November 1, 2016 and will remain irrevocable and continuously effective and valid as long as the original shareholders of Hexin E‑Commerce remains as the Shareholders of Hexin E‑Commerce. Spousal Consent Letter The spouse of Mr. Xiaobin Zhai signed a spousal consent letter on November 1, 2016. Mr. Zhai holds 5.0% equity interest in Hexin E-Commerce. Under the spousal consent letter, the signing spouse unconditionally and irrevocably agreed to Mr. Zhai's execution of the equity interest pledge agreement, the exclusive option agreement, the power of attorney and the loan agreement. The signing spouse undertook not to make any assertions upon those shares. The signing spouse further confirmed that her authorization and consent are not needed for any amendment or termination of the above mentioned agreements and undertook to execute and take all necessary measures to ensure the appropriate performance of those agreements. The VIE arrangements regarding Wusu Company On August 28, 2017, Wusu Company was incorporated by three shareholders —Hexin E-commerce, Mr. Wu and Mr. Jia. Each had 70%, 5% and 25% ownership, respectively, in which Mr. Wu and Mr. Jia represent non-controlling interest shareholders. Effective on January 1, 2018, shareholders of Wusu Company and WOFE entered into a series of contractual agreements (“VIE Agreements” which are described below). As a result, the Company, through its wholly owned subsidiary WOFE, has been determined to be the primary beneficiary of Wusu Company and the Company treats Wusu Company as a VIE. Accordingly, the Company consolidates Wusu Company’s operation, assets and liabilities. Due to the PRC legal restrictions on foreign ownership and investment in value-added telecommunications services, and Internet content provision services in particular, we currently conduct these activities through Wusu Company, which we effectively control through a series of contractual arrangements. These contractual arrangements allow us to: (1) have power to direct the activities that most significantly affects the economic performance of Wusu Company, (2) receive the economic benefits of Wusu Company that could be significant to Wusu Company, and (3) be fully and exclusively responsible for the management of Wusu Company, assume all of risk of losses of Wusu Company and allow the Company to exercise the voting right of Wusu Company's shareholders. Therefore, in accordance with ASC 810 "Consolidation", the Company is considered the primary beneficiary of Wusu Company and has consolidated Wusu Company's assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. Exclusive Business Cooperation Agreement Under the exclusive business cooperation agreement between WOFE and Wusu Company, WOFE has the exclusive right to provide Wusu Company with technical support, consulting services and other services. Without WOFE’s prior written consent, Wusu Company agrees not to accept the same or any similar services provided by any third party. WOFE may designate other parties to provide services to Wusu Company. Wusu Company agrees to pay service fees on a monthly basis and at an amount determined by WOFE after taking into account multiple factors, such as the complexity and difficulty of the services provided, the time consumed, the content and commercial value of services provided and the market price of comparable services. WOFE owns the intellectual property rights arising out of the performance of this agreement. In addition, Wusu Company has granted WOFE an irrevocable and exclusive option to purchase any or all of the assets and businesses of Wusu Company at the lowest price permitted under the PRC law. Unless otherwise agreed by the parties or terminated by WOFE unilaterally, this agreement will remain effective permanently. Equity Interest Pledge Agreements Pursuant to the equity interest pledge agreements, each shareholder of Wusu Company has pledged all of its equity interest in Wusu Company to guarantee the shareholder’s and Wusu Company’s performance of their obligations under the exclusive business cooperation agreement, loan agreement, exclusive option agreement and power of attorney. If Wusu Company or any of its shareholders breaches their contractual obligations under these agreements, WOFE, as pledgee, will be entitled to certain rights regarding the pledged equity interests, including being paid in priority based on the monetary valuation that the equity interest is converted into or receiving proceeds from the auction or sale of the pledged equity interests of Wusu Company in accordance with the PRC law. Each of the shareholders of Wusu Company agrees that, during the term of the equity interest pledge agreements, he will not transfer the pledged equity interests or place or permit the existence of any security interest or encumbrance on the pledged equity interests without the prior written consent of WOFE. The equity interest pledge agreements remain effective until Wusu Company and its shareholders discharge all of their obligations under the contractual arrangements. We have registered the equity pledge with the relevant office of the Administration for Industry and Commerce in accordance with the PRC Property Rights Law. Exclusive Option Agreements Pursuant to the exclusive option agreements, each shareholder of Wusu Company has irrevocably granted WOFE an exclusive option to purchase, or have its designated person or persons to purchase, at its discretion, to the extent permitted under the PRC law, all or part of the shareholder’s equity interests in Wusu Company. The purchase price is RMB10 or the minimum price required by the PRC law. If WOFE exercises the option to purchase part of the equity interest held by a shareholder, the purchase price shall be calculated proportionally. Wusu Company and each of its shareholders have agreed to appoint any persons designated by WOFE to act as Wusu Company’s directors. Without WOFE’s prior written consent, Wusu Company shall not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of its assets or beneficial interest, create or allow any encumbrance on its assets or other beneficial interests, provide any loans to any third parties, enter into any material contract with a value of more than RMB100,000 (US$14,900) (except those contracts entered into in the ordinary course of business), merge with or acquire any other persons or make any investments, or distribute dividends to the shareholders. The shareholders of Wusu Company have agreed that, without WOFE’s prior written consent, they will not dispose of their equity interests in Wusu Company or create or allow any encumbrance on their equity interests. These agreements will remain effective until all equity interests of Wusu Company held by its shareholders have been transferred or assigned to WOFE or its designated person(s). Loan Agreements Pursuant to the three loan agreements between WOFE and the shareholders of Wusu Company on January 1, 2018, WOFE agreed to lend an aggregate amount of RMB100.0 million (US$14.9 million) to the shareholders of Wusu Company solely for the capitalization of Wusu Company, including RMB 70.0 million (US$10.4 million) to Hexin E-commerce and RMB 30.0 million (US$4.5 million) to the non-controlling interest shareholders. During the year ended March 31, 2019, WOFE agreed to lend additional RMB 400.0 million to Hexin E-commerce for the capitalisation of Wusu Company. As of March 31, 2019, only the two loans totaling RMB30.0 million (US$4.5 million) to the non-controlling interest shareholders were funded. Pursuant to the loan agreements, the method of repayment shall be at the sole discretion of WOFE. At the option of WOFE, shareholders shall repay the loans by the transfer of all their equity interest in Wusu Company to WOFE or its designated person(s) pursuant to their respective exclusive option agreements. The shareholders must pay all of the proceeds from sale of such equity interests to Wusu Company. In the event that shareholders sell their equity interests to WOFE or its designated person(s) with a price equivalent to or less than the amount of the principal, the loans will be interest free. If the price is higher than the amount of the principal, the excess amount will be paid to WOFE as the loan interest. The loan must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in Wusu Company and WOFE elects to exercise its exclusive equity purchase option. The term of the loans is ten years and can be extended upon mutual written consent of the parties. Powers of Attorney Pursuant to the powers of attorney, each shareholder of Wusu Company has irrevocably appointed WOFE to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of Wusu Company requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Wusu Company, and appointing directors and executive officers. WOFE is entitled to designate any person to act as such shareholder’s exclusive attorney-in-fact without notifying or the approval of such shareholder, and if required by the PRC law, WOFE shall designate a PRC citizen to exercise such right. Each power of attorney will remain in force for so long as the shareholder remains a shareholder of Wusu Company. Each shareholder has waived all the rights which have been authorized to WOFE and will not exercise such rights. Spousal Consent Letter The spouse of Mr. Ming Jia signed a spousal consent letter on January 1, 2018. Mr. Ming Jia holds 25.0% equity interest in Wusu Company. Under the spousal consent letter, the signing spouse unconditionally and irrevocably agreed to Mr. Ming Jia’s execution of the equity interest pledge agreement, the exclusive option agreement, the power of attorney and the loan agreement. The signing spouse undertook not to make any assertions upon those shares. The signing spouse further confirmed that her authorization and consent are not needed for any amendment or termination of the abovementioned agreements and undertook to execute and take all necessary measures to ensure the appropriate performance of those agreements. Risks in relation to the VIE structure The Company believes that the contractual arrangements with its VIEs and their respective shareholders are in compliance with the PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company's ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of the PRC laws and regulations, the PRC government could: · revoke the business and operating licenses of the Company's PRC subsidiary and VIEs; · discontinue or restrict the operations of any related-party transactions between the Company's PRC subsidiary and VIEs; · limit the Company's business expansion in the PRC by way of entering into contractual arrangements; · impose fines or other requirements with which the Company's PRC subsidiary and VIEs may not be able to comply; · require the Company or the Company's PRC subsidiary and VIEs to restructure the relevant ownership structure or operations; and/or · restrict or prohibit the Company's use of the proceeds of the additional public offering to finance the Company's business and operations in the PRC. The Company's ability to conduct its online Peer to Peer ("P2P") Marketplace business and micro-lending business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their respective shareholders and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and VIEs. The interests of the shareholders of VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing VIEs not to pay the service fees when required to do so. The Company cannot assure that when conflicts of interest arise, shareholders of VIEs will act in the best interests of the Company or that conflicts of interests will be resolved in the Company's favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest the shareholders of VIEs may encounter in its capacity as beneficial owners and directors of VIEs, on the one hand, and as beneficial owners and directors of the Company, on the other hand. The Company believes the shareholders of VIEs will not act contrary to any of the contractual arrangements and the exclusive option agreements provide the Company with a mechanism to remove the current shareholders of VIEs should they act to the detriment of the Company. The Company relies on certain current shareholders of VIEs to fulfill their fiduciary duties and abide by laws of the PRC and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and the shareholders of VIE, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings. The following financial statement amounts and balances of the consolidated VIEs were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances. As of As of March 31, 2019 March 31, 2018 USD USD Current Assets: Cash and cash equivalents 19,048,168 132,622,467 Accounts receivable and contract assets 418,639 — Loans receivable-current, net of provision for loan losses 36,540,627 28,696,234 Interest receivable — 555,502 Prepayments and other assets 2,928,471 1,248,562 Total Current Assets 58,935,905 163,122,765 Loans receivable-non-current, net of provision for loan losses 39,760,643 — Property, equipment and software, net 1,253,723 767,087 Deferred tax assets 3,721,177 — Total Assets 103,671,448 163,889,852 Current Liabilities Accrued expenses and other current liabilities 2,048,601 3,786,955 Deferred revenue-current 110,726 — Taxes payable 9,359,828 20,059,828 Total Current Liabilities 11,519,155 23,846,783 Deferred revenue-non-current 189,958 — Total Liabilities 11,709,113 23,846,783 Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Net revenue 61,145,315 107,257,841 22,920,543 Net income 14,570,310 68,124,874 8,572,227 Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Net cash provided by operating activities 721,269 92,794,537 10,477,027 Net cash used in investing activities (51,541,988) (27,623,791) (287,765) Net cash (used in) provided by financing activities — (2,447,161) 1,487 Consolidated Trust The Company has established a designated trust, Trust 1, with a lending trust company in PRC (“Trust Company”), an independent third–party trust company in the PRC, as part of its strategy to diversify the funding sources. Pursuant to the terms of the agreement, the Trust Company facilitates personal credit loans through Trust 1 to borrowers referred by the Company. The initial term of the agreement is five years. The Company receives service fee revenues from the Trust Company for borrower referral, credit assessment services, and assistance in the loan facilitation process. As of March 31, 2019, Trust 1 was just established and started to facilitated loans to borrowers. As part of the above arrangements, the Company provides loan facilitation and post-origination services to Trust 1. The Company’s liability is capped at the initial cash set in the fund. The Company holds significant variable interest in Trust 1 through (1) providing funds for the loan facilitation and (2) the service fee charged. Through the transaction fees and deposits, the Company has the right to receive benefits from the Trust 1 that could potentially be significant to the Trust 1. The Company also has power to direct the activities that have most significant impact on the economic performance of the Trust 1 by providing the loan servicing and default loan collection services. Accordingly, the Company is considered the primary beneficiary of the Trust 1 and has consolidated the Trust 1’s assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. The assets of the Trust 1 are not available to creditors of the Company. All assets of Trust 1 are collateral for Trust 1’s obligations and can only be used to settle the Trust 1’s obligations. As the Company provides funds to Trust 1 for the loan facilitation, the Company recognized loan receivables in the consolidated balance sheet as of March 31, 2019. The following financial statement amounts and balances of the consolidated Trust 1 were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of March 31, 2019 USD Current Assets: Cash 2,885,106 Other receivables 29,801 Loan receivables 64,103 Total assets 2,979,010 Year ended March 31, 2019 USD Revenue Net loss (1,084) Year ended March 31, 2019 USD Net cash provided by operating activities 2,949,209 Net cash used in investing activity (64,103) Net cash used in financing activity — The VIEs and consolidated trust contributed 99.7%, 100% and 100% of the Company's consolidated revenue for the year ended March 31, 2019, 2018 and 2017 respectively. Also, it contributed 59.8% and 100% of the Company's consolidated assets and 59.8% and 100% of the Company's consolidated liabilities for 2019 and 2018 respectively. Uses of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during each reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Company's consolidated financial statements include estimates and judgments applied in allocation of revenue with various performance obligations, allowance for accounts receivable and contract assets, impairment on long-term investment, valuation allowance for deferred tax assets, fair value of guarantee liability, valuation of share-based compensation and allowance for loan receivables. Fair value of financial instruments Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurement or assumptions that market participants would use when pricing the asset or liability. The Company follows the provisions of Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2 — Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3 — Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the balance sheets for cash, receivable, prepayment and other asset, loans principal and interest receivable, approximate their fair value based on the short-term maturity of these instruments. The fair value of the guarantee liabilities recorded at the inception of the loan was estimated using a discounted cash flow model (Level 3 inputs) based on expected payouts from the arrangement with the other financial services providers (“Funding Partners”). The Company estimates its expected future payouts based on estimates of expected delinquency rate in excess of a standard default rate threshold defined by the Funding Partner and a discount rate for time value. The Company did not transfer any assets or liabilities in or out of level 3 during the years ended March 31, 2019, 2018 and 2017. The Company’s long-term investments mainly comprise of equity securities investments. For long term investment without readily determinable fair value, the Company is not able to estimate fair value, hence, the Company uses cost minus impairment method as alternative. See (“Investment in equity securities”) for more details. Revenue recognition The Company is an online lending marketplace connecting borrowers and investors ("P2P"). The Company generally provides loan facilitation service by connecting investors to qualified borrowers and facilitating loan arrangements between the parties and post-origination service, including reviewing and assessing borrower’s information over the loan period, providing online account statements, collection services and sending short-message-service (“SMS”) payment information throughout the term of the loans to borrowers and investors. The Company determined that it is not the legal lender and legal borrower in the loan origination and repayment process, but acting as an intermediary to bring the lender and the borrower together. Accordingly, the Company does not record loans receivable and payable arising from the loans between the marketplace investors and the borrowers. For each loan facilitated, the Company charges a service fee which payable by the borrower for all loan facilitation and post-origination services provided. At contract inception, the Company determines that the collection of service fees is probable based on historical experiences as well as the credit due diligence performed on each borrower prior to loan origination. The revenue generated from P2P business are accounted under Accounting Standards Update (ASU) 2014-09, “Revenue from contracts with Customers” (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps: · Step 1: Identify the contract (s) with a customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligations in the contract · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company determines its customers to be both investors and borrowers. Revenue is the transaction price the Company expects to be entitled to in exchange for the promised services in a contract in the ordinary course of the Company's activities and is recorded net of value-added tax ("VAT"). The services to be accounted for include loan facilitation service and post-origination service (e.g. cash processing and collection services). The Company considers the loan facilitation service and post-origination service are two separate performance obligations under ASC 606, as these two deliverables are distinct in that customers can benefit from each service on its own and the Company’s promises to deliver the services are separately identifiable from each other in the contract. The transaction price is allocated amongst two performance obligations using their relative standalone selling prices consistent with the guidance in ASC 606. The Company does not have observable standalone selling price information for the loan facilitation services or post-origination services because it does not provide loan facilitation services or post-origination services on a standalone basis. There is no direct observable standalone selling price for similar services in the market that is reasonably available to the Company. As a result, the estimation of standalone selling price involves significant judgment. The Company uses an expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services and post origination services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services and post-origination services, the Company considers the cost incurred to deliver such services, profit margin for similar arrangements, customer demand, effect of competitors on the Company's services, and other market factors. For each type of service, the Company recognizes revenue when (or as) it satisfies the performance obligation by transferring a promised service to a customer. The amount of the transaction price allocated to performance obligations that are unsatisfied as of March 31, 2019 are US$1,938,000, all |
ACCOUNTS RECEIVABLE AND CONTRAC
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS | 12 Months Ended |
Mar. 31, 2019 | |
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS | |
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS | Note 3—ACCOUNTS RECEIVABLE AND CONTRACT ASSETS As of As of March 31, 2019 March 31, 2018 USD USD Accounts receivable 140,639 — Contract assets 278,000 — 418,639 — |
LOANS RECEIVABLE, NET
LOANS RECEIVABLE, NET | 12 Months Ended |
Mar. 31, 2019 | |
LOANS RECEIVABLE, NET | |
LOANS RECEIVABLE, NET | Note 4—LOANS RECEIVABLE, NET As of As of March 31, 2019 March 31, 2018 USD USD Loans receivable 77,448,759 28,696,234 Allowance for uncollectible loans receivable (1,083,385) — Loans receivable, net 76,365,374 28,696,234 Loans receivable, net – current 36,554,913 28,696,234 Loans receivable, net – non-current 39,810,461 — As of March 31, 2019 and 2018, the Company did not have any past due loan receivables and none of loan receivable were in non-accrual status. The amount of loan receivables attributable to Trust 1 was US$64,103 and nil as of March 31, 2019 and 2018, respectively. Movement of allowance for uncollectible loans receivable during the years ended March 31, 2019 and 2018 is as follows: Year ended Year ended March 31, 2019 March 31, 2018 USD USD Balance at beginning of the year — — Provision for allowance of uncollectible loans receivable 1,084,225 — Foreign currency translation adjustments (840) — Balance at end of the year 1,083,385 — |
PREPAYMENT AND OTHER ASSETS
PREPAYMENT AND OTHER ASSETS | 12 Months Ended |
Mar. 31, 2019 | |
PREPAYMENT AND OTHER ASSETS | |
PREPAYMENT AND OTHER ASSETS | Note 5—PREPAYMENT AND OTHER ASSETS As of As of March 31, 2019 March 31, 2018 USD USD Rental and other deposits 1,161,423 404,409 Prepayments to suppliers and others 2,168,386 781,049 Staff advances 5,156 63,104 3,334,965 1,248,562 |
PROPERTY, EQUIPMENT AND SOFTWAR
PROPERTY, EQUIPMENT AND SOFTWARE, NET | 12 Months Ended |
Mar. 31, 2019 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | Note 6—PROPERTY, EQUIPMENT AND SOFTWARE, NET As of As of March 31, 2019 March 31, 2018 Cost: USD USD Office equipment 1,440,817 590,801 Vehicle 59,903 58,405 Leasehold improvements 140,769 150,612 Software 357,783 331,583 Total 1,999,272 1,131,401 Less: Accumulated depreciation (745,549) (364,314) Property, equipment and software, net 1,253,723 767,087 Depreciation and amortization expense on property, equipment and software for the years ended March 31, 2019, 2018 and 2017 were US$406,799, US$174,384 and US$92,224, respectively. |
LONG TERM INVESTMENTS
LONG TERM INVESTMENTS | 12 Months Ended |
Mar. 31, 2019 | |
LONG TERM INVESTMENTS | |
LONG TERM INVESTMENTS | Note 7—LONG TERM INVESTMENTS As of As of March 31, 2019 March 31, 2018 USD USD Investment in equity security without readily determinable fair value Phoenix Intelligent Credit Group Ltd (“Phoenix Intelligent Credit”) (a) 29,189,836 — Musketeer Group Inc. (“Musketeer”) (b) 1,600,000 — 30,789,836 — (a) On December 10, 2018, the Company signed an agreement to acquire a 5.88% equity stake in Phoenix Intelligent Credit Group Ltd (“Phoenix Intelligent Credit”), a wholly owned subsidiary of Phoenix Financial Group Ltd (“Phoenix Finance”) and operator of one of China’s leading peer-to-peer lending platforms, for a total consideration of approximately US$29 million (or RMB200 million). The acquisition was completed as of March 31, 2019 and the Company still had an acquisition price payable to Phoenix Finance in the amount of US$14,289,371 as of March 31, 2019, which was fully paid in April 2019. Pursuant to the investment agreement, such investment is redeemable at the option of the Company if certain future performance condition cannot be met. The Company accounted the investment as investment in equity security without readily determinable fair value. (b) On August 9, 2018, the Company acquired a 19.99% equity stake in Musketeer Group Inc. (“Musketeer”), an Indonesian online lending platform that offers consumption installment loans, for approximately US$1.6 million. Since Musketeer is a start-up company in its early stage with no readily determinable fair value, the investments were accounted for using the cost method. For the year ended March 31, 2019, the Company did not recognize any impairment losses for the long term investments. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Mar. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | Note 8—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES As of As of March 31, 2019 March 31, 2018 USD USD Accrued payroll and welfare 1,016,704 2,036,472 Professional fee and other accrued expenses 830,734 760,769 Funds collected on behalf of employees for exercise of option 724,256 — Custodian Bank service fee (a) 219,405 989,714 2,791,099 3,786,955 (a) Since January 2017, the Company integrated our asset custody system with Jiangxi Bank. Under the terms of the agreement, all funds of borrowers and investors will be managed by Jiangxi Bank to ensure security and compliance with relevant the PRC laws and regulations. Jiangxi Bank independently administers payments to borrowers, investors and the Company as well as clearance and fund settlements associated with these payments. Jiangxi Bank charged us depositary service fee, recharge and collection fees and withdrawal fees according to types of service it provided. |
NOTE PAYABLE
NOTE PAYABLE | 12 Months Ended |
Mar. 31, 2019 | |
NOTE PAYABLE | |
NOTE PAYABLE | Note 9—NOTE PAYABLE On March 29, 2019, the Company issued a senior unsecured note (the “Note”) to Majik Fund SPC, an exempted company managed by a subsidiary of Yunfeng Financial Group Limited (“Yunfeng Financial Group”), which is independent to the Company. The principal of loan is US$20 million with a term of three-year due in March 2022. The Note bears a fixed interest rate of 12.0% per annum, with interest payable semi-annually in arrears on June 30 and December 31 of each year, beginning in March 2019. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Mar. 31, 2019 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | Note 10—RELATED PARTY BALANCES AND TRANSACTIONS Hexin Information Services Co., Ltd. and Hexin Financial Information Services (Beijing) Co., Ltd. (together “Hexin Group”) were incorporated and owned by Mr. Xiaobo An, the Chairman of the Board (the “Controlling Shareholder”). The Company historically utilized Hexin Group’s centralized banking systems for its own cash and banking management, which resulted in a significant balance of amount due from related party‑Hexin Group. In addition, Hexin Group also paid expense on behalf of the Company. The Company has recorded all expenses paid by Hexin Group on behalf of the Company in the related historical periods presented in its consolidated financial statements. Since January 12, 2017, the Company has separated its treasury management function from the Hexin Group. As of March 31, 2019 and 2018, there was no balance between the Company and the related parties. |
EMPLOYEE BENEFIT
EMPLOYEE BENEFIT | 12 Months Ended |
Mar. 31, 2019 | |
EMPLOYEE BENEFIT | |
EMPLOYEE BENEFIT | Note 11—EMPLOYEE BENEFIT The Company has made employee benefit contribution in accordance with the PRC relevant regulations, including retirement insurance, unemployment insurance, medical insurance, work injury insurance and maternity insurance. The Company recorded the contribution in the salary and employee charges at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time. The contributions made by the Company were US$2,187,910, US$1,956,917 and US$1,024,927 for the years ended March 31, 2019, 2018 and 2017, respectively. |
TAXES PAYABLE
TAXES PAYABLE | 12 Months Ended |
Mar. 31, 2019 | |
TAXES PAYABLE | |
TAXES PAYABLE | Note 12—TAXES PAYABLE As of As of March 31, 2019 March 31, 2018 USD USD Income tax payable 4,428,224 12,558,211 VAT payable 4,062,825 6,725,654 Other taxes payable 880,481 775,963 Total taxes payable 9,371,530 20,059,828 |
INCOME TAX
INCOME TAX | 12 Months Ended |
Mar. 31, 2019 | |
INCOME TAX | |
INCOME TAX | Note 13—INCOME TAX Cayman Islands Hexindai Inc. was incorporated in the Cayman Islands and is not subject to income taxes or capital gain under current laws of Cayman Islands. Hong Kong HK Hexindai is an investment holding company registered in Hong Kong and is exempted from income tax on its foreign‑derived income. PRC The Company’s subsidiaries and VIEs established in the PRC are subject to the PRC statutory income tax rate of 25%, according to the PRC Enterprise Income Tax (“EIT”) law. The Company’s VIE Hexin E‑Commerce has been granted as the “high technology enterprise” status in 2015 and is qualified to a preferred income tax rate of 15% since January 1, 2015. Horgos Qinhe and Horgos Bozhishuntai enjoy a preferred income tax rate of 0% for five years since inception, as they were incorporated in Horgos Economic District. i) The components of the income tax provision (benefit) are as follows: Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Current 5,596,753 10,610,067 1,386,570 Deferred (3,724,081) 415,623 135,641 Total 1,872,672 11,025,690 1,522,211 All of the income tax are related to income derived from the PRC during the years ended March 31, 2019, 2018 and 2017. ii) The following table summarizes net deferred tax assets resulting from differences between financial accounting basis and tax basis of assets and liabilities: As of As of March 31, 2019 March 31, 2018 USD USD Advertising expenses 3,721,177 — Provision for loan loss 271,056 — Net operating loss carry forwards 5,683 — Total deferred tax assets 3,997,916 Less: Valuation allowance (276,739) — Total net deferred tax assets 3,721,177 — The Company considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold. The Company’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in the tax law. The Company has provided US$ 276,739 and nil valuation allowance for the years ended March 31, 2019 and 2018, respectively. For the year ended 2018, the deferred tax assets carried forward from last fiscal year was fully realized. The Company had no net operating loss carry forward as of March 31, 2018. The following table reconciles the PRC statutory rates to the Company’s effective tax rate for the years ended March 31, 2019, 2018 and 2017. Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 PRC Income tax statutory rate 25 % 25.0 % 25.0 % Effect of tax holiday and preferential tax rate (48.1) % (10.7) % (10.0) % Effect of withholding income tax 17.8 % — — Non-deductible expenses 30.6 % 0.1 % 0.1 % Effective tax rate 25.3 % 14.4 % 15.1 % The authoritative guidance requires that the Company recognizes the impact of a tax position in the financial statements if that position is more likely than not of being sustained upon audit by the tax authority, based on the technical merits of the position. Under PRC laws and regulations, arrangements and transactions among related parties may be subject to examination by the PRC tax authorities. If the PRC tax authorities determine that the contractual arrangements among related companies do not represent a price under normal commercial terms, they may make adjustments to the companies’ income and expenses. A transfer pricing adjustment could result in additional tax liabilities. The Company did not identify significant unrecognized tax benefits for the years ended March 31, 2019, 2018 and 2017. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding US$14,900 (RMB100,000) is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. Aggregate undistributed earnings of the Company’s PRC subsidiaries and VIEs that are available for distribution was approximately US$72 million of March 31, 2019 and 2018 respectively. In accordance with the EIT Law, dividends, which arise from profits of foreign invested enterprises (“FIEs”) earned after January 1, 2008, are subject to a 10% withholding income tax. In addition, under tax treaty between the PRC and Hong Kong, if the foreign investor is incorporated in Hong Kong and qualifies as the beneficial owner, the applicable withholding tax rate is reduced to 5%, if the investor holds at least 25% in the FIE, or 10%, if the investor holds less than 25% in the FIE. On July 19, 2018, the board of directors approved an annual dividend policy. Under this policy, annual dividends will be set at an amount equivalent to approximately 15-25% of the Company’s anticipated net income after tax in each year commencing from fiscal year ended March 31, 2019, which will be derived from the earnings of the Company PRC entities. On July 23, 2018, the board of directors declared an annual dividend for the fiscal year ended March 31, 2019 pursuant to the newly adopted annual dividend policy of US$0.27 per ordinary share (or US$0.27 per ADS). As a result, the Company incurred withholding tax of US$1.3 million for the cash dividend during year ended March 31, 2019. A deferred tax liability should be recognized for the undistributed profits of PRC subsidiaries unless the Company has sufficient evidence to demonstrate that the undistributed dividends will be reinvested and the remittance of the dividends will be postponed indefinitely. The Company plans to indefinitely reinvest undistributed profits earned from or before year ended March 31, 2018 from its China subsidiaries in its operations in the PRC. Therefore, no withholding income taxes for undistributed profits of the Company’s subsidiaries have been provided as of March 31, 2019 and 2018. Under applicable accounting principles, a deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting basis over tax basis in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Company completed its feasibility analysis on a method, which the Company will ultimately execute if necessary to repatriate the undistributed earnings of the VIE without significant tax costs. As such, the Company does not accrue deferred tax liabilities on the earnings of the VIE given that the Company will ultimately use the means. The aggregate amount and per share effect of the tax holiday and preferential tax rate are as follows: Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD The aggregate amount of tax holiday and preferential tax rate 2,642,450 8,157,429 1,014,808 The aggregate effect on basic and diluted net income per share: - Basic 0.06 0.18 0.02 - Diluted 0.05 0.17 0.02 |
EARNINGS PER SHARE ("EPS")
EARNINGS PER SHARE ("EPS") | 12 Months Ended |
Mar. 31, 2019 | |
EARNINGS PER SHARE("EPS") | |
EARNINGS PER SHARE ("EPS") | Note 14—EARNINGS PER SHARE (“EPS”) Basic EPS is the amount of net earnings available to each share of ordinary shares outstanding during the reporting period. Diluted EPS is the amount of net earnings available to each share of ordinary shares outstanding during the reporting period adjusted to include the effect of potentially dilutive ordinary shares. The following table details the computation of the basic and diluted net earnings per share: Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Numerator: Net income attributable to Hexindai Inc.'s shareholders 5,532,581 65,481,973 8,570,864 Denominator: Weighted average number of ordinary shares outstanding-basic 48,693,162 44,977,780 42,331,200 Weighted average number of dilutive potential ordinary shares from share options 4,219,664 2,678,483 — Weighted average number of ordinary shares outstanding-diluted 52,912,826 47,656,263 42,331,200 Basic net income per share 0.11 1.46 0.20 Diluted net income per share 0.10 1.37 0.20 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Mar. 31, 2019 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | Note 15—SHAREHOLDERS’ EQUITY Hexindai Inc. was established under the laws of the Cayman Islands on April 26, 2016. The authorized number of ordinary shares is 500,000,000 shares with par value of US$0.0001 each. As of March 31, 2019 and 2018, 49,204,083 and 47,958,550 ordinary shares were outstanding. The shares are presented on a retroactive basis to reflect the nominal share issuance. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Mar. 31, 2019 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | Note 16—SHARE-BASED COMPENSATION 2016 Equity Incentive Plan On April 1, 2016 (the “Award date”), to reward the Company’s employees and further align their interests with the Company in the future, the Company granted stock options to purchase 6,312,000 ordinary shares under the 2016 Equity Incentive Plan, adjusted for the nominal share issuance, to the Company’s officers, and key employees with the exercise price equal to US$1.28. The Company determined the grant date to be April 1, 2016 in accordance with ASC 718‑10‑20 and 718‑10‑25‑5. It is because the Company and employee have reached a mutual understanding of the key terms and conditions of these stock option awards on April 1, 2016 including a specific exercise price and vesting and exercise condition. All necessary approvals for the stock option awards were obtained and communicated to employees on April 1, 2016. Subsequently, after the board of directors declared a cash dividend of $0.40 per ordinary share (or US$0.40 per ADS) on July 23, 2018, the board of directors further approved an adjustment to the exercise price of outstanding options from US$1.28 to US$0.88. The Options vested and became exercisable in three equal installments with the first vesting commencement date being the later of the first anniversary of the grant date or the closing date of a Qualified IPO. Subject to the continued employment or service through each applicable vesting date of the option holder, shares subject to the Option shall become vested as to the remaining two‑thirds of the total number of share options under the 2016 Equity Incentive Plan in two (2) substantially equal annual installments, with the first installment vesting on the second anniversary of the grant date and the second installment vesting on the third anniversary of the grant date; provided that a Qualified IPO shall have occurred on or prior to the second anniversary of the grant date. The maximum contractual term is 4 years from the April 1, 2016. These options expire on March 31, 2020 and cannot be exercised if they have not vested by the expiration date or the termination date of the options. If a Qualified IPO does not occur within two years of April 1, 2016, such option will immediately expire to the extent unvested. As vesting is triggered only upon a Qualified IPO, such unvested options will be forfeited. The options contain an explicit service condition (i.e., the options vest at each of three years following a successful initial public offering) and a performance condition (i.e., the options can only be exercised upon successful completion of an initial public offering by employees that are still employed by the Company upon the completion of the initial public offering). Under ASC 718‑10‑55‑76, if the vesting (or exercisability) of an award is based on the satisfaction of both a service and performance condition, the entity must initially determine which outcomes are probable and recognize the compensation cost over the longer of the explicit or implicit service period. Because an initial public offering generally is not considered to be probable until the initial public offering is effective, no compensation cost will be recognized until the initial public offering occurs. The Company has elected to recognize share-based compensation expense using a straight‑line method for the entire employee equity awards granted with graded vesting based on service conditions provided that the amount of compensation cost recognized at any date is at least equal to the portion of the grant‑date value of the equity awards that are vested at that date. Upon successful completion of a Qualified IPO, the Company will recognize share-based compensation for the portion of the requisite service that has been rendered as of that date for the portion for the period from April 1, 2016 to the date of the Completion of Qualified IPO on November 3, 2017. The Company is responsible for determining the fair value of options granted to employees and uses the Binomial option‑pricing model assuming as of the valuation date, the fair market value per share was US$1.41, exercise price per share was US$1.28, the risk-free interest rate was 1.81%, and the dividend yield was 0%. For the options granted under 2016 Equity Incentive Plan, the expiry data was March 31, 2020, the life of option was 4 years, volatility was 47.4% and exercise multiple was 2.2. The following table sets forth the stock option shares activities under the Company’s 2016 Equity Incentive Plan for the years ended March 31, 2019, 2018 and 2017. Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life in Grant Date Intrinsic options Price Years Fair Value Value USD USD Outstanding as of March 31, 2016 — — — — — Option granted 6,312,000 1.28 4 3,512,693 — Option forfeited — — — — — Option exercised — — — — — Outstanding as of March 31, 2017 6,312,000 1.28 3 3,512,693 — Option granted — — — — Option forfeited (128,000) 1.28 — (71,233) (1,283,840) Option exercised — — — — — Outstanding, March 31, 2018 6,184,000 1.28 2 3,441,460 62,025,520 Number of Granted 208,400 8.60 2 791,920 — Number of Exercise (1,127,853) 1.03 — (627,662) — Number of Forfeit (278,469) 1.31 — (201,891) — Outstanding, March 31, 2019 4,986,078 1.18 1 3,403,827 7,954,959 Vested and exercisable, March 31, 2017 — — — — — Vested and exercisable, March 31, 2018 2,061,333 1.28 2 1,147,153 20,675,173 Vested and exercisable, March 31, 2019 4,861,604 0.99 1 2,930,826 7,954,959 Restricted Stock Units For the year ended March 31, 2019, the Company granted 616,700 restricted stock units (“RSU”). One RSU represents one ordinary share of the Company. RSU are share awards that, upon vesting, will deliver to the holder shares of the Company’s ordinary shares. All of the RSU were to be vested over three years, one third (1/3) vesting and exercisable upon the date of grant, and the remaining two-thirds (2/3) of RSU equally vesting and exercisable upon each of the second and third anniversary of the grant date. The Company satisfies RSU vesting through the issuance of new shares or settle by cash. During the year ended March 31, 2019, 538,900 RSU has been vested. The following table summarized the Company’s RSUs activities under all incentive plans (in US$, except shares): Number of Restricted Shares Weighted-average grant date fair value USD Outstanding at March 31, 2018 — Granted 616,700 9.26 Vested (538,900) 9.26 Forfeited — Outstanding at March 31, 2019 77,800 9.26 The fair value of the stock option and RSU on the grant date was approximately US$3.5 million. The Company accrues the compensation cost based on the number of awards that are expected to vest. The estimated forfeiture rate for the awards in fiscal years ended March 31, 2019, 2018 and 2017 is 13.04%, 13.04% and nil, respectively. The forfeiture rate is estimated based on the historical employee turnover rates and expectations about the future. For the years ended March 31, 2019, 2018 and 2017, the Company recognized US$6,585,386, US$1,828,868 and nil share-based compensation expense based on estimated forfeitures, respectively. As of March 31, 2019 and 2018, the unrecognized compensation cost was US$518,891 and US$1,163,825, respectively. As of March 31, 2019, the unrecognized compensation cost was expected to be recognized over 1 year. |
TREASURY STOCK
TREASURY STOCK | 12 Months Ended |
Mar. 31, 2019 | |
TREASURY STOCK | |
TREASURY STOCK | Note 17—TRESURY STOCK On December 10, 2018, the Company announced that its board of directors authorized a share repurchase program under which the Company may repurchase up to US$25 million of its ordinary shares in the form of American depositary shares ("ADS") over the next 12 months. The program aligns with the Company's commitment to maximize shareholder value, and affirms its confidence and optimism in the long-term future of the peer-to-peer lending Industry in China. Under the program, the purchases will be funded from cash on hand or future cash provided by operating activities. There is no guarantee as to the exact number of shares to be repurchased by the Company, and the Company may discontinue purchases at any time that the board of directors determines additional purchases are not warranted. As of March 31, 2019, the Company repurchased an aggregate of 421,220 ADSs from the open market for a total consideration of US$1,320,468, which was recorded as treasury stock. |
DIVIDEND
DIVIDEND | 12 Months Ended |
Mar. 31, 2019 | |
DIVIDEND | |
DIVIDEND | Note 18—DIVIDEND On July 19, 2018, the board of directors approved an annual dividend policy. Under this policy, annual dividends will be set at an amount equivalent to approximately 15-25% of the Company’s anticipated net income after tax in each year commencing from fiscal year ended March 31, 2019. On July 23, 2018, the board of directors declared a cash dividend of $0.40 per ordinary share (or US$0.40 per ADS). The cash dividend consisted of an annual dividend for the fiscal year ended March 31, 2019 pursuant to the newly adopted annual dividend policy of US$0.27 per ordinary share (or US$0.27 per ADS), and a special cash dividend of US$0.13 per ordinary share (or US$0.13 per ADS). The aggregated dividend payments to shareholders amounted to US$19,547,532 for the year ended March 31, 2019. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Mar. 31, 2019 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | Note 19—RESTRICTED NET ASSETS Restricted Net Assets As a result of the PRC laws and regulations and the requirement that distributions by the PRC entity can only be paid out of distributable profits computed in accordance with the PRC GAAP, the PRC entity is restricted from transferring a portion of their net assets to the Company. The restricted net assets consist of paid in capital, capital reserve and statutory reserves of the Company's PRC entities. As of March 31, 2019 and 2018, the restricted net assets that are not available for distribution amounted to approximately US$104.3 million and US$51.0 million, respectively, which was included in the Additional paid-in capital on the consolidated balance sheets. Statutory Reserve Pursuant to the Company Law of the PRC, each of the PRC entity is required to appropriate 10% of its net income to the statutory reserve on an annual basis until the aggregated amount of the reserve reaches 50% of its registered capital. Statutory reserve is not distributable. Subject to the approval of the shareholders, the statutory reserve may be used to offset accumulated losses or converted into capital of the company. As of March 31, 2019 and 2018, the statutory reserve amounted to US$8,952,951 and US$7,475,902, respectively, which was included as retained earnings in the accompanying consolidated balance sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Mar. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | Note 20—COMMITMENTS AND CONTINGENCIES Operating Lease Commitments The Company has entered into various operating lease agreements principally for its office spaces in China. Rental expenses under operating leases for the years ended March 31, 2019, 2018 and 2017 were US$2,219,743, US $1,163,326 and US $720,314, respectively. The Company conducted most of its operations from leased offices spaces which will expire over the next three years. There is no contingent rental payments beside minimum lease payment. In most circumstances, management expects that in the normal course of business, leases will be renewed or replaced by other leases. Future minimum lease payments under non‑cancelable operating lease agreements as of March 31, 2019 are follows: Minimum lease payment USD Years ending March 31, 2020 1,908,665 2021 919,408 2022 55,132 Total 2,883,205 Contingencies In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Company records contingent liabilities resulting from such claims, when a loss is assessed to be probable and the amount of the loss is reasonably estimable. As of March 31, 2019 and 2018, no such contingent liability is assessed as probable. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Mar. 31, 2019 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | Note 21—SUBSEQUENT EVENT The Company has analyzed its operations subsequent to March 31, 2019, through the date the financial statements were available to and have determined that the Company does not have any material subsequent events to disclose in these consolidated financial statements. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Mar. 31, 2019 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | Schedule I —CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY The Company’s subsidiaries and VIE’s established in the PRC are restricted in their ability to transfer a portion of their net assets to the Company. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. The Company’s subsidiaries and its VIEs are also required to set aside at least 10% of its after‑tax profit based on the PRC accounting standards each year to its statutory reserves account until the accumulative amount of such reserves reaches 50% of its respective registered capital. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. In addition, the Company’s operations and revenues are conducted and generated in China, all of the Company’s revenues being earned and currency received are denominated in RMB. RMB is subject to the foreign exchange control regulation in China, and, as a result, the Company may be unable to distribute any dividends outside of China due to the PRC foreign exchange control regulations that restrict the Company’s ability to convert RMB into US Dollars. Regulation S‑X requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company financial statements have been prepared in accordance with Rule 12‑04, Schedule I of Regulation S‑X as the restricted net assets of the Company’s PRC subsidiary and VIE exceed 25% of the consolidated net assets of the Company. The condensed financial information of the parent company has been prepared in accordance with SEC Regulation S-X Rule 5-04 and Rule 12-04, using the same accounting policies as set out in the Company’s consolidated financial statements, except that the Company uses the equity method to account for investments in its subsidiaries, VIEs and VIEs' subsidiaries. The footnote disclosures generally included in financial statements prepared in accordance with US GAAP have been condensed and omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements are not the general-purpose financial statements of the reporting entity and should be read in conjunction with the notes to the consolidated financial statements of the Company. CONDENSED BALANCE SHEETS As of March 31 As of March 31 2019 2018 USD USD ASSETS: Cash 24,828,067 47,387,922 Prepayment and other assets 349,990 9,995 Investments in subsidiaries, VIEs and VIEs' subsidiaries 135,632,715 95,543,469 TOTAL ASSETS 160,810,772 142,941,386 LIABILITIES: Accrued expenses and other current liabilities 18,243 2,898,317 Note payable 20,000,000 — Consideration payable 14,289,371 — TOTAL LIABILITIES 34,307,614 2,898,317 SHAREHOLDERS' EQUITY: Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 49,625,303 and 47,958,550 shares issued and 49,204,083 and 47,958,550 shares outstanding as of March 31, 2019 and 2018, respectively. 4,963 4,796 Additional paid-in capital 59,806,865 58,417,971 Treasury stock (1,320,468) — Retained earnings 69,768,756 77,241,073 Accumulated other comprehensive (loss) income (1,756,958) 4,379,229 TOTAL SHAREHOLDERS' EQUITY 126,503,158 140,043,069 TOTAL LIABILITIES AND SHEREHOLDERS' EQUITY 160,810,772 142,941,386 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Years Ended March 31, 2019 2018 2017 USD USD USD Equity in earnings of subsidiaries, VIEs and VIEs' subsidiaries 14,725,415 68,117,762 8,570,978 General administrative expense and others (9,192,834) (2,607,137) (114) NET INCOME 5,532,581 65,510,625 8,570,864 OTHER COMPREHENSIVE INCOME Foreign currency translation adjustment (6,136,187) 6,028,143 (1,080,036) COMPREHENSIVE INCOME (LOSS) (603,606) 71,538,768 7,490,828 CONDENSED STATEMENTS OF CASH FLOWS For The Years Ended March 31, 2019 2018 2017 USD USD USD CASH FLOWS FROM OPERATING ACTIVITIES: Net income 5,532,581 65,510,625 8,570,864 Adjustments to reconcile net income to net cash provided by operating activities: Equity in subsidiaries, VIEs and VIEs' subsidiaries (14,725,415) (68,117,762) (8,570,978) Share-based compensation 6,585,386 1,828,868 — Changes in operating assets and liabilities: Prepayments and other assets (339,995) 44,295 (50,009) Accrued expenses and other current liabilities (2,562,074) 2,898,317 — NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (5,509,517) 2,164,343 (50,123) CASH FLOWS FROM INVESTING ACTIVITIES: Increase in investment in subsidiaries, VIEs and VIE's subsidiaries (15,420,961) — — Purchase of long term investments (1,600,000) — — NET CASH USED IN INVESTING ACTIVITIES (17,020,961) — — CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from private placement offering, net of offering cost — — 2,000,000 Proceeds from IPO, net of offering costs — 43,273,702 — Exercise of share options 1,156,623 — — Proceeds from issuance of unsecured note 20,000,000 — — Repurchase of ordinary shares (1,320,468) — — Payments for offering cost (318,000) — — Dividend paid (19,547,532) — — NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (29,377) 43,273,702 2,000,000 NET (DECREASE) INCREASE IN CASH (22,559,855) 45,438,045 1,949,877 CASH—beginning of year 47,387,922 1,949,877 — CASH—end of year 24,828,067 47,387,922 1,949,877 SUPPLEMENTAL CASH FLOW DISCLOSURES: Cash paid for income tax — — — Cash paid for interest — — — Notes to condensed financial statements 1. Hexindai Inc. was founded on April 26, 2016 in Cayman Islands. The condensed full year result of the Company has been prepared assuming the Reorganization (see Note 1 in the combined and consolidated financial statements) was in effect from November 1, 2016. 2. The condensed financial statements of Hexindai Inc. have been prepared using the same accounting policies as set out in the combined and consolidated financial statements except that the equity method has been used to account for investments in subsidiaries, VIEs and subsidiaries of VIEs. Such investment in subsidiaries and VIEs are presented on the balance sheets as interests in subsidiaries and VIEs and the profit of the subsidiaries and VIEs is presented as equity in profit of subsidiaries and VIEs on the statement of operations. 3. As of March 31, 2019 and 2018, there were no material contingencies, significant provisions of long-term obligations of the Company, except for those which have been separately disclosed in the consolidated financial statements. 4. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosure certain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying Combined and Consolidated Financial Statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and have been consistently applied. Certain items in the consolidated statements of comprehensive income and cash flows have been reclassified to the current presentation. |
Basis of consolidation | Basis of consolidation The accompanying consolidated financial statements include the financial statements of the Company, its subsidiaries, its consolidated VIEs and VIE’s subsidiaries for which the Company is the primary beneficiary. All inter-company transactions and balances have been eliminated upon consolidation. Consolidated VIEs The VIE arrangements regarding Hexin E-commerce Foreign ownership of internet-based businesses, including distribution of online information (such as an online marketplace connecting borrowers and investors), is subject to restrictions under current PRC laws and regulations. The Company is a Cayman Islands company and WOFE (its PRC subsidiary) is considered foreign invested enterprise. To comply with these regulations, the Company conducts the majority of its activities in the PRC through its VIE, Hexin E-Commerce. Hexin E-Commerce holds the requisite licenses and permits necessary to conduct the Company's online marketplace connecting borrowers and investors business. WOFE has entered into the following contractual arrangements with shareholders of Hexin E-Commerce, that enable the Company to (1) have power to direct the activities that most significantly affects the economic performance of Hexin E-Commerce, and (2) receive the economic benefits of Hexin E-Commerce that could be significant to Hexin E-Commerce. The Company is fully and exclusively responsible for the management of Hexin E-Commerce, assumes all of risk of losses of Hexin E-Commerce and has the exclusive right to exercise all voting rights of Hexin E-Commerce's shareholder. Therefore, in accordance with ASC 810 "Consolidation", the Company is considered the primary beneficiary of Hexin E-Commerce and has consolidated Hexin E-Commerce's assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. Exclusive Business Cooperation Agreement On November 1, 2016, WOFE entered into an Exclusive Business Cooperation Agreement with Hexin E-Commerce to enable WOFE to receive substantially all of the assets and business of Hexin E-Commerce in the PRC. Under this Agreement, WOFE has the exclusive right to provide Hexin E-Commerce with comprehensive technical support, consulting services and other services during the term of this Agreement, including but not limited to software licensing; development, maintenance and update of software, network system, hardware and database; technical support and training for employees; consultancy on technology and market information; business management consultation; marketing and promotion services, etc. WOFE has the right to determine the fees associated with the services it provides based on the technical difficulty and complexity of the services, the actual labor costs it incurs for providing the services and some other factors during the relevant period. This Agreement became effective on November 1, 2016 and will remain effective unless otherwise terminated in writing by WOFE. Equity Interest Pledge Agreements Pursuant to the three Equity Interest Pledge Agreements dated November 1, 2016 among Hexin E-Commerce, each of the Shareholders of Hexin E-Commerce and WOFE, each Shareholder of Hexin E-Commerce agreed to pledge his equity interest in Hexin E-Commerce to WOFE to secure the performance of the VIEs' obligations under the Exclusive Business Cooperation Agreement and any such agreements to be entered into in the future. Shareholders of Hexin E-Commerce agreed not to transfer, sell, pledge, dispose of or otherwise create any encumbrance on their equity interests in Hexin E-Commerce without the prior written consent of WOFE. The Pledge became effective on such date when the pledge of the equity interest contemplated herein was registered with relevant administration for industry and commerce (the "AIC") and will remain effective until all contract obligations have been fully performed and all secured indebtedness have been fully paid. Exclusive Option Agreements Pursuant to the three Exclusive Option Agreements entered into on November 1, 2016 among WOFE, Hexin E-Commerce and each of the Shareholders of Hexin E-Commerce, each of the Shareholders of Hexin E-Commerce irrevocably grant WOFE an irrevocable and exclusive right to purchase, or designate one or more persons (including individuals, corporations, partnerships, partners, enterprises, trusts or non-corporate organizations) to purchase the equity interests in Hexin E-Commerce then held by such Shareholder of Hexin E-Commerce once or at multiple times at any time in part or in whole at WOFE's sole and absolute discretion to the extent permitted by Chinese laws at the price of RMB 1 or at the price of the minimum amount of consideration permitted by applicable the PRC law at the time when such purchase occurs. These three Agreements became effective on November 1, 2016 and will remain effective until all equity interests held by the shareholders of Hexin E-Commerce in Hexin E-Commerce have been transferred or assigned to WOFE and/or its designees. Loan Agreements Pursuant to the three Loan Agreements dated November 1, 2016 between each of the Shareholders of Hexin E‑Commerce and WOFE, WOFE agreed to lend each of the Shareholders of Hexin E‑Commerce a loan only to subscribe registered capital of Hexin E‑Commerce. The repayment of the loan shall be made by permitting WOFE to execute its exclusive right to purchase shares from the shareholders of Hexin E‑Commerce under the Exclusive Option Agreement as the repayment is equivalent with the consideration of the purchased shares. The term of these loans is 10 years from November 1, 2016, which may be extended upon mutual written consent of both parties. Power of Attorney On November 1, 2016, each Shareholder of Hexin E-Commerce, executed Power of Attorney agreement with WOFE and Hexin E-Commerce, whereby Shareholders of Hexin E-Commerce irrevocably appoint and constitute WOFE as their attorney-in-fact to exercise on the shareholders' behalf any and all rights that Shareholders of Hexin E-Commerce have in respect of their equity interests in Hexin E-Commerce. These three Power of Attorney documents became effective on November 1, 2016 and will remain irrevocable and continuously effective and valid as long as the original shareholders of Hexin E‑Commerce remains as the Shareholders of Hexin E‑Commerce. Spousal Consent Letter The spouse of Mr. Xiaobin Zhai signed a spousal consent letter on November 1, 2016. Mr. Zhai holds 5.0% equity interest in Hexin E-Commerce. Under the spousal consent letter, the signing spouse unconditionally and irrevocably agreed to Mr. Zhai's execution of the equity interest pledge agreement, the exclusive option agreement, the power of attorney and the loan agreement. The signing spouse undertook not to make any assertions upon those shares. The signing spouse further confirmed that her authorization and consent are not needed for any amendment or termination of the above mentioned agreements and undertook to execute and take all necessary measures to ensure the appropriate performance of those agreements. The VIE arrangements regarding Wusu Company On August 28, 2017, Wusu Company was incorporated by three shareholders —Hexin E-commerce, Mr. Wu and Mr. Jia. Each had 70%, 5% and 25% ownership, respectively, in which Mr. Wu and Mr. Jia represent non-controlling interest shareholders. Effective on January 1, 2018, shareholders of Wusu Company and WOFE entered into a series of contractual agreements (“VIE Agreements” which are described below). As a result, the Company, through its wholly owned subsidiary WOFE, has been determined to be the primary beneficiary of Wusu Company and the Company treats Wusu Company as a VIE. Accordingly, the Company consolidates Wusu Company’s operation, assets and liabilities. Due to the PRC legal restrictions on foreign ownership and investment in value-added telecommunications services, and Internet content provision services in particular, we currently conduct these activities through Wusu Company, which we effectively control through a series of contractual arrangements. These contractual arrangements allow us to: (1) have power to direct the activities that most significantly affects the economic performance of Wusu Company, (2) receive the economic benefits of Wusu Company that could be significant to Wusu Company, and (3) be fully and exclusively responsible for the management of Wusu Company, assume all of risk of losses of Wusu Company and allow the Company to exercise the voting right of Wusu Company's shareholders. Therefore, in accordance with ASC 810 "Consolidation", the Company is considered the primary beneficiary of Wusu Company and has consolidated Wusu Company's assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. Exclusive Business Cooperation Agreement Under the exclusive business cooperation agreement between WOFE and Wusu Company, WOFE has the exclusive right to provide Wusu Company with technical support, consulting services and other services. Without WOFE’s prior written consent, Wusu Company agrees not to accept the same or any similar services provided by any third party. WOFE may designate other parties to provide services to Wusu Company. Wusu Company agrees to pay service fees on a monthly basis and at an amount determined by WOFE after taking into account multiple factors, such as the complexity and difficulty of the services provided, the time consumed, the content and commercial value of services provided and the market price of comparable services. WOFE owns the intellectual property rights arising out of the performance of this agreement. In addition, Wusu Company has granted WOFE an irrevocable and exclusive option to purchase any or all of the assets and businesses of Wusu Company at the lowest price permitted under the PRC law. Unless otherwise agreed by the parties or terminated by WOFE unilaterally, this agreement will remain effective permanently. Equity Interest Pledge Agreements Pursuant to the equity interest pledge agreements, each shareholder of Wusu Company has pledged all of its equity interest in Wusu Company to guarantee the shareholder’s and Wusu Company’s performance of their obligations under the exclusive business cooperation agreement, loan agreement, exclusive option agreement and power of attorney. If Wusu Company or any of its shareholders breaches their contractual obligations under these agreements, WOFE, as pledgee, will be entitled to certain rights regarding the pledged equity interests, including being paid in priority based on the monetary valuation that the equity interest is converted into or receiving proceeds from the auction or sale of the pledged equity interests of Wusu Company in accordance with the PRC law. Each of the shareholders of Wusu Company agrees that, during the term of the equity interest pledge agreements, he will not transfer the pledged equity interests or place or permit the existence of any security interest or encumbrance on the pledged equity interests without the prior written consent of WOFE. The equity interest pledge agreements remain effective until Wusu Company and its shareholders discharge all of their obligations under the contractual arrangements. We have registered the equity pledge with the relevant office of the Administration for Industry and Commerce in accordance with the PRC Property Rights Law. Exclusive Option Agreements Pursuant to the exclusive option agreements, each shareholder of Wusu Company has irrevocably granted WOFE an exclusive option to purchase, or have its designated person or persons to purchase, at its discretion, to the extent permitted under the PRC law, all or part of the shareholder’s equity interests in Wusu Company. The purchase price is RMB10 or the minimum price required by the PRC law. If WOFE exercises the option to purchase part of the equity interest held by a shareholder, the purchase price shall be calculated proportionally. Wusu Company and each of its shareholders have agreed to appoint any persons designated by WOFE to act as Wusu Company’s directors. Without WOFE’s prior written consent, Wusu Company shall not amend its articles of association, increase or decrease the registered capital, sell or otherwise dispose of its assets or beneficial interest, create or allow any encumbrance on its assets or other beneficial interests, provide any loans to any third parties, enter into any material contract with a value of more than RMB100,000 (US$14,900) (except those contracts entered into in the ordinary course of business), merge with or acquire any other persons or make any investments, or distribute dividends to the shareholders. The shareholders of Wusu Company have agreed that, without WOFE’s prior written consent, they will not dispose of their equity interests in Wusu Company or create or allow any encumbrance on their equity interests. These agreements will remain effective until all equity interests of Wusu Company held by its shareholders have been transferred or assigned to WOFE or its designated person(s). Loan Agreements Pursuant to the three loan agreements between WOFE and the shareholders of Wusu Company on January 1, 2018, WOFE agreed to lend an aggregate amount of RMB100.0 million (US$14.9 million) to the shareholders of Wusu Company solely for the capitalization of Wusu Company, including RMB 70.0 million (US$10.4 million) to Hexin E-commerce and RMB 30.0 million (US$4.5 million) to the non-controlling interest shareholders. During the year ended March 31, 2019, WOFE agreed to lend additional RMB 400.0 million to Hexin E-commerce for the capitalisation of Wusu Company. As of March 31, 2019, only the two loans totaling RMB30.0 million (US$4.5 million) to the non-controlling interest shareholders were funded. Pursuant to the loan agreements, the method of repayment shall be at the sole discretion of WOFE. At the option of WOFE, shareholders shall repay the loans by the transfer of all their equity interest in Wusu Company to WOFE or its designated person(s) pursuant to their respective exclusive option agreements. The shareholders must pay all of the proceeds from sale of such equity interests to Wusu Company. In the event that shareholders sell their equity interests to WOFE or its designated person(s) with a price equivalent to or less than the amount of the principal, the loans will be interest free. If the price is higher than the amount of the principal, the excess amount will be paid to WOFE as the loan interest. The loan must be repaid immediately under certain circumstances, including, among others, if a foreign investor is permitted to hold majority or 100% equity interest in Wusu Company and WOFE elects to exercise its exclusive equity purchase option. The term of the loans is ten years and can be extended upon mutual written consent of the parties. Powers of Attorney Pursuant to the powers of attorney, each shareholder of Wusu Company has irrevocably appointed WOFE to act as such shareholder’s exclusive attorney-in-fact to exercise all shareholder rights, including, but not limited to, voting on all matters of Wusu Company requiring shareholder approval, disposing of all or part of the shareholder’s equity interest in Wusu Company, and appointing directors and executive officers. WOFE is entitled to designate any person to act as such shareholder’s exclusive attorney-in-fact without notifying or the approval of such shareholder, and if required by the PRC law, WOFE shall designate a PRC citizen to exercise such right. Each power of attorney will remain in force for so long as the shareholder remains a shareholder of Wusu Company. Each shareholder has waived all the rights which have been authorized to WOFE and will not exercise such rights. Spousal Consent Letter The spouse of Mr. Ming Jia signed a spousal consent letter on January 1, 2018. Mr. Ming Jia holds 25.0% equity interest in Wusu Company. Under the spousal consent letter, the signing spouse unconditionally and irrevocably agreed to Mr. Ming Jia’s execution of the equity interest pledge agreement, the exclusive option agreement, the power of attorney and the loan agreement. The signing spouse undertook not to make any assertions upon those shares. The signing spouse further confirmed that her authorization and consent are not needed for any amendment or termination of the abovementioned agreements and undertook to execute and take all necessary measures to ensure the appropriate performance of those agreements. Risks in relation to the VIE structure The Company believes that the contractual arrangements with its VIEs and their respective shareholders are in compliance with the PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company's ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of the PRC laws and regulations, the PRC government could: · revoke the business and operating licenses of the Company's PRC subsidiary and VIEs; · discontinue or restrict the operations of any related-party transactions between the Company's PRC subsidiary and VIEs; · limit the Company's business expansion in the PRC by way of entering into contractual arrangements; · impose fines or other requirements with which the Company's PRC subsidiary and VIEs may not be able to comply; · require the Company or the Company's PRC subsidiary and VIEs to restructure the relevant ownership structure or operations; and/or · restrict or prohibit the Company's use of the proceeds of the additional public offering to finance the Company's business and operations in the PRC. The Company's ability to conduct its online Peer to Peer ("P2P") Marketplace business and micro-lending business may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIEs in its consolidated financial statements as it may lose the ability to exert effective control over the VIEs and their respective shareholders and it may lose the ability to receive economic benefits from the VIEs. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and VIEs. The interests of the shareholders of VIEs may diverge from that of the Company and that may potentially increase the risk that they would seek to act contrary to the contractual terms, for example by influencing VIEs not to pay the service fees when required to do so. The Company cannot assure that when conflicts of interest arise, shareholders of VIEs will act in the best interests of the Company or that conflicts of interests will be resolved in the Company's favor. Currently, the Company does not have existing arrangements to address potential conflicts of interest the shareholders of VIEs may encounter in its capacity as beneficial owners and directors of VIEs, on the one hand, and as beneficial owners and directors of the Company, on the other hand. The Company believes the shareholders of VIEs will not act contrary to any of the contractual arrangements and the exclusive option agreements provide the Company with a mechanism to remove the current shareholders of VIEs should they act to the detriment of the Company. The Company relies on certain current shareholders of VIEs to fulfill their fiduciary duties and abide by laws of the PRC and act in the best interest of the Company. If the Company cannot resolve any conflicts of interest or disputes between the Company and the shareholders of VIE, the Company would have to rely on legal proceedings, which could result in disruption of its business, and there is substantial uncertainty as to the outcome of any such legal proceedings. The following financial statement amounts and balances of the consolidated VIEs were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances. As of As of March 31, 2019 March 31, 2018 USD USD Current Assets: Cash and cash equivalents 19,048,168 132,622,467 Accounts receivable and contract assets 418,639 — Loans receivable-current, net of provision for loan losses 36,540,627 28,696,234 Interest receivable — 555,502 Prepayments and other assets 2,928,471 1,248,562 Total Current Assets 58,935,905 163,122,765 Loans receivable-non-current, net of provision for loan losses 39,760,643 — Property, equipment and software, net 1,253,723 767,087 Deferred tax assets 3,721,177 — Total Assets 103,671,448 163,889,852 Current Liabilities Accrued expenses and other current liabilities 2,048,601 3,786,955 Deferred revenue-current 110,726 — Taxes payable 9,359,828 20,059,828 Total Current Liabilities 11,519,155 23,846,783 Deferred revenue-non-current 189,958 — Total Liabilities 11,709,113 23,846,783 Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Net revenue 61,145,315 107,257,841 22,920,543 Net income 14,570,310 68,124,874 8,572,227 Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Net cash provided by operating activities 721,269 92,794,537 10,477,027 Net cash used in investing activities (51,541,988) (27,623,791) (287,765) Net cash (used in) provided by financing activities — (2,447,161) 1,487 Consolidated Trust The Company has established a designated trust, Trust 1, with a lending trust company in PRC (“Trust Company”), an independent third–party trust company in the PRC, as part of its strategy to diversify the funding sources. Pursuant to the terms of the agreement, the Trust Company facilitates personal credit loans through Trust 1 to borrowers referred by the Company. The initial term of the agreement is five years. The Company receives service fee revenues from the Trust Company for borrower referral, credit assessment services, and assistance in the loan facilitation process. As of March 31, 2019, Trust 1 was just established and started to facilitated loans to borrowers. As part of the above arrangements, the Company provides loan facilitation and post-origination services to Trust 1. The Company’s liability is capped at the initial cash set in the fund. The Company holds significant variable interest in Trust 1 through (1) providing funds for the loan facilitation and (2) the service fee charged. Through the transaction fees and deposits, the Company has the right to receive benefits from the Trust 1 that could potentially be significant to the Trust 1. The Company also has power to direct the activities that have most significant impact on the economic performance of the Trust 1 by providing the loan servicing and default loan collection services. Accordingly, the Company is considered the primary beneficiary of the Trust 1 and has consolidated the Trust 1’s assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. The assets of the Trust 1 are not available to creditors of the Company. All assets of Trust 1 are collateral for Trust 1’s obligations and can only be used to settle the Trust 1’s obligations. As the Company provides funds to Trust 1 for the loan facilitation, the Company recognized loan receivables in the consolidated balance sheet as of March 31, 2019. The following financial statement amounts and balances of the consolidated Trust 1 were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: As of March 31, 2019 USD Current Assets: Cash 2,885,106 Other receivables 29,801 Loan receivables 64,103 Total assets 2,979,010 Year ended March 31, 2019 USD Revenue Net loss (1,084) Year ended March 31, 2019 USD Net cash provided by operating activities 2,949,209 Net cash used in investing activity (64,103) Net cash used in financing activity — The VIEs and consolidated trust contributed 99.7%, 100% and 100% of the Company's consolidated revenue for the year ended March 31, 2019, 2018 and 2017 respectively. Also, it contributed 59.8% and 100% of the Company's consolidated assets and 59.8% and 100% of the Company's consolidated liabilities for 2019 and 2018 respectively. |
Uses of estimates | Uses of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during each reporting period. Actual results could differ from such estimates. Significant accounting estimates reflected in the Company's consolidated financial statements include estimates and judgments applied in allocation of revenue with various performance obligations, allowance for accounts receivable and contract assets, impairment on long-term investment, valuation allowance for deferred tax assets, fair value of guarantee liability, valuation of share-based compensation and allowance for loan receivables. |
Fair value of financial instruments | Fair value of financial instruments Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurement or assumptions that market participants would use when pricing the asset or liability. The Company follows the provisions of Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures. ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows: Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. Level 2 — Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. Level 3 — Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. The carrying amounts reported in the balance sheets for cash, receivable, prepayment and other asset, loans principal and interest receivable, approximate their fair value based on the short-term maturity of these instruments. The fair value of the guarantee liabilities recorded at the inception of the loan was estimated using a discounted cash flow model (Level 3 inputs) based on expected payouts from the arrangement with the other financial services providers (“Funding Partners”). The Company estimates its expected future payouts based on estimates of expected delinquency rate in excess of a standard default rate threshold defined by the Funding Partner and a discount rate for time value. The Company did not transfer any assets or liabilities in or out of level 3 during the years ended March 31, 2019, 2018 and 2017. The Company’s long-term investments mainly comprise of equity securities investments. For long term investment without readily determinable fair value, the Company is not able to estimate fair value, hence, the Company uses cost minus impairment method as alternative. See (“Investment in equity securities”) for more details. |
Revenue recognition | Revenue recognition The Company is an online lending marketplace connecting borrowers and investors ("P2P"). The Company generally provides loan facilitation service by connecting investors to qualified borrowers and facilitating loan arrangements between the parties and post-origination service, including reviewing and assessing borrower’s information over the loan period, providing online account statements, collection services and sending short-message-service (“SMS”) payment information throughout the term of the loans to borrowers and investors. The Company determined that it is not the legal lender and legal borrower in the loan origination and repayment process, but acting as an intermediary to bring the lender and the borrower together. Accordingly, the Company does not record loans receivable and payable arising from the loans between the marketplace investors and the borrowers. For each loan facilitated, the Company charges a service fee which payable by the borrower for all loan facilitation and post-origination services provided. At contract inception, the Company determines that the collection of service fees is probable based on historical experiences as well as the credit due diligence performed on each borrower prior to loan origination. The revenue generated from P2P business are accounted under Accounting Standards Update (ASU) 2014-09, “Revenue from contracts with Customers” (Topic 606). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps: · Step 1: Identify the contract (s) with a customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligations in the contract · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company determines its customers to be both investors and borrowers. Revenue is the transaction price the Company expects to be entitled to in exchange for the promised services in a contract in the ordinary course of the Company's activities and is recorded net of value-added tax ("VAT"). The services to be accounted for include loan facilitation service and post-origination service (e.g. cash processing and collection services). The Company considers the loan facilitation service and post-origination service are two separate performance obligations under ASC 606, as these two deliverables are distinct in that customers can benefit from each service on its own and the Company’s promises to deliver the services are separately identifiable from each other in the contract. The transaction price is allocated amongst two performance obligations using their relative standalone selling prices consistent with the guidance in ASC 606. The Company does not have observable standalone selling price information for the loan facilitation services or post-origination services because it does not provide loan facilitation services or post-origination services on a standalone basis. There is no direct observable standalone selling price for similar services in the market that is reasonably available to the Company. As a result, the estimation of standalone selling price involves significant judgment. The Company uses an expected cost plus margin approach to estimate the standalone selling prices of loan facilitation services and post origination services as the basis of revenue allocation. In estimating its standalone selling price for the loan facilitation services and post-origination services, the Company considers the cost incurred to deliver such services, profit margin for similar arrangements, customer demand, effect of competitors on the Company's services, and other market factors. For each type of service, the Company recognizes revenue when (or as) it satisfies the performance obligation by transferring a promised service to a customer. The amount of the transaction price allocated to performance obligations that are unsatisfied as of March 31, 2019 are US$1,938,000, all of which pertain to post-origination service. As the payment terms of the loans facilitated by the Company are all within one year, any unsatisfied performance obligation as of year-end will be satisfied in the next year. Under ASC 606-10-65-1(h), the Company apply the modified retrospective approach only to contracts that are not completed as of the transition date and the Company used practical expedient on completed contracts in transiting to ASC 606. For completed contracts that have variable consideration, the Company used the transaction price at the date the contract was completed rather than estimating variable consideration amounts in the comparative reporting periods. Revenue recognition policies for each type of service are discussed as follows: · Revenue from loan facilitation services Before adoption of ASC 606, the Company recognizes the revenue from loan facilitation for service fees loan inception, when the facilitation service is provided and collectability is assured. Upon adoption of ASC 606, revenues from loan facilitation are recognized at the time a loan is originated between investors and borrowers and the principal loan balance is transferred to borrowers, at that time the facilitation service is considered completed. · Revenue from post-origination services (i) Post-origination services fee Before adoption of ASC 606, the Company generates post-origination service fees from investors by providing post-origination services, including monitoring payments from borrowers to investors and maintaining investors' account portfolios. Post-origination revenue is recognized when service is provided, the price is fixed or determinable as well as collectability is assured, which is normally at the end of related investment period. Upon adoption of ASC 606, revenue from post-origination services are recognized evenly over the term of the underlying loans as the post-origination services are a series of distinct services that are substantially the same and that have the same pattern of transfer to the investor. The fee collected upfront allocated to post-origination services are deferred and recognized over the period of the loan on a straight-line basis. (ii) Service fees related to the automated investment programs Under ASC 606, service fees derived from investors using the automated investment programs are initially estimated based on historical experience of returns on similar investment products and current trends. The service fees are recognized on a straight-line basis over the term of the investment period as performance obligation is satisfied when the investments are matched automatically with loans to generate cumulative expected returns for the investors during the investment period. The service fees related to the automated investment programs are due at the end of the investment period. The investment period refers to the period of time when the investments are matched with loans and are generating returns for the investors. The Company records service fees only when it becomes probable that a significant reversal in the amount of cumulative revenue will not occur. · Revenue from loan management service For the years ended March 31, 2018 and 2017, the Company facilitated certain secured loans through its online lending marketplace and provided loan management service on reviewing the secured loan borrower’s pledged asset condition and updating secured asset information and status over the term of the secured loan period. Revenue from loan management service are recognized over the period of loan on a straight line basis. The Company has no longer facilitated any secured loans through its online lending marketplace since March 31, 2018, as a result the revenue from loan management service was nil for the years ended March 31, 2019. · Revenue from loan recommendation service The Company started to provide recommendation services by referring certain borrowers to Funding Partners since December 2018. Such services primarily include referral through the Company’s marketplace that directs users to third party financial institutions. The Company receives a referral fee from the third-party financial institutions and such revenue is recognized at the point that the recommendation services are performed and the related funds are drawdown by borrowers. For the year ended March 31, 2019, the Company earned US$858,796 recommendation service revenue from its partnership with a financial services provider in China, or the Funding Partner. · Interest income The Company lends funds to borrowers up to their approved credit amount since August 2017 through its consolidated VIE and consolidated Trust 1. Interest income on loans receivable is recognized monthly based on the contractual interest rates of the loan. Accrual of interest is generally discontinued when reasonable doubt exists as to the full, timely collection of interest or principal. When a loan is discontinued from interest accrual, the Company stops accruing interest and reverses all accrued but unpaid interest as of such date. Interest income was US$3,552,983, US$590,122 and nil for the years ended March 31, 2019, 2018 and 2017, respectively, which was included as net revenue in the accompanying consolidated statements of comprehensive income. · Other revenue Other revenue includes one-time fees for loan transfers and other general fees charged to borrowers, which are recognized when the related performance is completed. · Incentives to investors To expand its market presence, the Company provides cash incentives to qualified investors within a limited period. During the relevant incentive program period, the Company sets certain thresholds for the investor to qualify to enjoy the cash incentive. When qualified investment is made, the cash coupons is provided to investors to reduce the amount of investment required to purchase financial products. In accordance with ASC 606, the cash incentives provided are accounted for as reduction of revenue. Cash incentives accounted for as reduction of revenue amounted to US$20,509,878, US$15,170,406 and US$1,629,316 for the years ended March 31, 2019, 2018 and 2017, respectively. The Company offers cash rewards to existing online investors upon successful referral of new online investors under investor referral program. For the transactions that investors were granted cash incentive for investor referral, the Company recognizes such cash incentive as a reduction to revenue upon the grant date as the service performed to the investors is expected within one year. · Disaggregation of revenue All of the Company’s revenue for the years ended March 31, 2019, 2018 and 2017 were generated from the PRC. The following table illustrates the disaggregation of revenue: Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Revenue Loan facilitation service 66,782,312 117,984,295 25,636,661 Loan management service — 508,948 2,678,557 Post-origination service 11,418,182 4,213,862 1,219,897 Recommendation service 858,796 — — Interest income 3,552,983 590,122 — Others 1,491 21,434 59,756 82,613,764 123,318,661 29,594,871 Tax and surcharges (773,382) (890,414) (171,862) Cash incentives (20,509,878) (15,170,406) (1,629,316) Risk reserve liability charges — — (4,873,150) Net Revenue 61,330,504 107,257,841 22,920,543 The Company has adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs on April 1, 2018 with modified retrospective approach. The Company recorded an increase to opening accumulated retained earnings of US$189,686 as of April 1, 2018 due to the cumulative impact of adopting ASC 606. The comparative information is not restated and continues to be reported under the accounting standards in effect for the period presented. · Disclosure related to modified retrospective adoption of ASC 606 The impacts of the adoption of ASC 606 in the year ended March 31, 2019 on consolidated statement of income are shown below. Impacts of ASC606 Balances without Impacted consolidated statement of income items As Reported Adoption ASC 606 Adoption USD USD USD Net revenue 61,330,504 189,686 61,520,190 Net income 5,532,581 189,686 5,722,267 The impacts of the adoption of ASC 606 as of March 31, 2019, including the cumulative effects of the change, on consolidated balance sheet are shown below. Impacts of ASC606 Balances without Impacted consolidated balance sheet items As Reported Adoption ASC 606 Adoption USD USD USD Equity: Retained earnings 69,768,756 189,686 69,958,442 The adoption of ASC 606 had no transition impact on cash provided by or used in operating, financing or investing activities reported in the Company’s consolidated statement of cash flows. · Contract assets See contract assets in the accounting policy of “Accounts receivable, contract assets and allowance for uncollectible accounts”. As of March 31, 2019 and 2018, the Company has contract assets amounted to US$278,000 and nil, respectively. · Deferred revenue Deferred revenues are derived from contracts with borrowers and contractual billings in excess of recognized revenue and payments received in advance of revenue recognition, which are from advancement of loan facilitation services fee received from borrowers. Deferred revenues represent the unamortized balance of facilitation service fee paid by borrowers. Material Terms and Conditions of the Insurance Agreement On January 25, 2017, the Company entered into a framework agreement with a third party insurance company, to provide insurance to investors covering the risk of borrowers’ non-payment, effective from February 1, 2017 (the “Insurance Agreement”). Pursuant to the Insurance Agreement, the insurance company charges borrowers an insurance fee at 2% of the loan principal amount plus accrued interest for loans facilitated on our marketplace under credit loans starting from February 1, 2017. The term of the Insurance Agreement is one year, which can be automatically renewed prior to expiry each year. On February 1, 2018, the Company renewed the Insurance Agreement by entering into a new framework agreement with Changan Insurance (the “2018 Insurance Agreement”), along with a memorandum on the 2018 Insurance Agreement with Changan Insurance and an insurance services fee agreement which set forth (i) a loan default risk premium equal to 2% of the loan principal and accrued interest of credit loans and (ii) a service fee equal to 2% of the loan principal. The Company terminated its cooperation with Changan Insurance on November 30, 2018, and did not renew the 2018 Insurance Agreement. According to the confirmation letter issued by Changan Insurance, Changan Insurance will settle all outstanding insurance claims according to the terms of the 2018 Insurance Agreement. Under the Insurance Agreement and the 2018 Insurance Agreement, the insurance company is responsible for providing insurance coverage to investors who provide loans to borrowers who are qualified under the Company's credit and risk assessment procedures, subject to the satisfaction of prescribed insurance requirements of the insurance company. Upon the completion of loan origination, the borrower shall pay the loan default risk premium to the insurance company directly. In the event that insurance company suffers losses from the insurance policies due to the Company's failure in reviewing the qualification of the borrowers, the insurance company is entitled to require the Company to compensate for all the losses and relevant expenses incurred. As of the date of this report, there have been no such claims for compensation from the insurance company to the Company. The Company has assessed this contingency in accordance with ASC Topic 450, and concluded that no contingent liability should be recorded as of March 31, 2019 and 2018. On November 19, 2018, the Company entered into a guarantee plan (the "Guarantee Plan") with Shanxi Zhengxuan Finance Guarantee Co., Ltd. (“Zhengxuan Guarantee”), which is controlled by the State-owned Assets Supervision and Administration Commission of the State Council, to provide investors on the Company’s platform with insurance coverage that protects them against the potential default risk of non-paying borrowers. Pursuant to the terms and conditions of the Guarantee Plan and the agreements between the borrowers and Shanxi Zhengxuan, starting from December 1, 2018, all new loans facilitated on the Company’s marketplace require borrowers to obtain insurance through Zhengxuan Guarantee. Borrowers pay 4.5% and 0.5% of the principal amount to Zhengxuan Guarantee as insurance policy premium and service fee, respectively. If a default were to occur, Zhengxuan Guarantee will compensate the investor with an amount up to the loan residual principal and three months of accrued interest. |
Guarantee liabilities | Guarantee liabilities As part of the Company’s cooperation with the Funding Partner, the Company provides guarantee on the principal and accrued interest repayment of the defaulted loans to the Funding Partner in excess of certain default rate criteria. The financial guarantee is accounted for as a credit derivative under ASC 815 because the scope exemption in ASC 815-10-15-58(c) is not met. The guarantee liabilities are remeasured at the end of each reporting period. The change in fair value of the guarantee liabilities is recorded as gain or loss on guarantee liabilities in the consolidated statements of comprehensive income. When the Company settles the guarantee liabilities through performance of the guarantee by making requisite payments on the respective defaulted loans, the Company records a corresponding deduction to the guarantee liabilities. Subsequent collection from the borrower through the Funding Partners will be recognized as a reversal of the deduction to guarantee liabilities. The Company’s guarantee liabilities was determined as nil as of March 31, 2019, which was assessed with the assistance from an independent third-party valuation firm. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents represent cash on hand, unrestricted demand deposits, and other short-term highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash. The Company maintains certain cash and cash equivalents with financial institutions in the PRC which are not insured or otherwise protected. Should any of these institutions holding the Company's cash become insolvent, or if the Company is unable to withdraw funds for any reason, the Company could lose the cash on deposit with that institution. |
Accounts receivable, contract assets and allowance for uncollectible accounts | Accounts receivable, contract assets and allowance for uncollectible accounts Accounts receivable are related to the recommendation service and loan facilitation income in relation to loans facilitated by the Company. Contract assets represent the right to consideration in exchange for services that the Company has transferred to the customer before payment is due. The Company's right to consideration for the monthly fees of post-origination service is conditional on the investors’ actual return, as investors have the right to early terminate the investment prior to the maturity. As such, the Company record a corresponding contract asset for the monthly post-origination service that have already been delivered in relation to loans facilitated on the platform when recognizing revenue from post-origination service. Contract assets represent the right to consideration in exchange for post-origination services that the Company has transferred to the customer before payment is due. The Company only recognizes contract assets to the extent that the Company believes it is probable that it will collect substantially all of the consideration to which it will be entitled in exchange for the services transferred to the customer. The contract assets will not be reclassified to a receivable given that the right to invoice and the payment due date is the same date. Per ASC 606-10-45-3, an entity shall assess a contract asset for impairment in accordance with Topic 310 on receivables. Per ASC 606-10-50-4a, impairment losses recognized on receivables or contract assets, are disclosed separately from other impairment losses. Accounts receivable and contract assets are stated at the historical carrying amount net of write-offs and allowance for uncollectible accounts. The Company establishes an allowance for uncollectible accounts based on estimates, historical experience and other factors surrounding the credit risk of specific clients. Uncollectible accounts are written-off when a settlement is reached for an amount that is less than the outstanding historical balance or when the Company has determined the balance will not be collected. There were no past-due accounts receivable balance as of March 31, 2019 and 2018. As of March 31, 2019 and 2018, the account receivable balance was US$140,639 and nil, respectively and included in accounts receivable, contract assets, prepayments and other assets of the consolidated balance sheet. As of March 31, 2019 and 2018, the allowance for uncollectible account receivable balance was nil. |
Loans receivable | Loans receivable Since August 2017, the Company started to engage in the micro-lending business and target at the borrowers in the PRC. Loans receivable represent loan originated by the Company, which is due from the qualified individual borrowers. As of March 31, 2019 and 2018, the loans are typical with loan terms ranging from 12 months to 36 months with annual interest charge from 6% to 8%. The Company has the intent and the ability to hold such loans for the foreseeable future or until maturity or payoff. Loans receivable are recorded at the historical carrying amount, net of allowance for uncollectible loans receivable. Allowance for uncollectible loans receivable The Company considers the loans to be homogenous as they are all unsecured loans and the credit profiles of the borrowers are also similar. Therefore, the Company applies a consistent credit risk management framework to the entire portfolio of loans in accordance with ASC 450-20, Loss Contingencies. The allowance for the uncollectible loans receivable is determined using a roll rate-based model. The roll rate-based model stratifies the loans principal and interest receivables by delinquency stages which are divided by days overdue and projected forward in next stage using probability of default. In each stage of the simulation, losses on the loan principal, interest and financing service fee receivables types are captured, and the ending delinquency stratification serves as the beginning point of the next iteration. This process is repeated on a monthly rolling basis. The loss rate is calculated for each delinquency stage using loss given default, and then applied to the respective loans principal and interest balance. The Company adjusts the allowance that is determined by the roll rate-based model for various Chinese macroeconomic factors i.e. gross-domestic product rates, interest rates and consumer price indexes. Each of these macroeconomic factors is equally weighted, and a score is applied to each factor based on year-on-year increases and decreases in that respective factor. Specific provision is made when the Company, based on current information and events, such as the borrower’s ability to repay the loan, believes it is probable all amounts due according to the contractual terms of the loan will not be collected. Non-accrual policies Loans principal and interest receivables are placed on non-accrual status when payments are 90 days past due contractually. When a loan principal and interest receivable is placed on non-accrual status, interest accrual ceases. If the loan is non-accrual, the cost recovery method is used and cash collected is applied to first reduce the carrying value of the loan. Otherwise, interest income may be recognized to the extent cash is received. Loans principal and interest receivables may be returned to accrual status when all of the borrower’s delinquent balances of loans principal and interest have been settled and the borrower continue to perform in accordance with the loan terms. Charge-off policies Loans principal and interest receivables are generally charged-off when a settlement is reached for an amount that is less than the outstanding balance or when the Company has determined the balance is uncollectable. In accordance with ASC 310-10-35-41, the Company determines that any loans with outstanding balance that are 180 days past due are deemed uncollectable and thereof charged-off. For the year ended March 31, 2019, in order to align the Company’s charge-off policy with ASC 310-10-35-41 and industry practice, the Company revised its charge-off policy such that all loans are 180 days past due are therefore deemed uncollectible and charged-off. For the year ended March 31, 2018, the Company determined that any loans with outstanding balance that are 90 days past due are deemed uncollectable and therefor charged-off. The change in the charge-off policy had no impact on the Company’s provision for loan losses for the year ended March 31, 2018, as the Company did not have loans with outstanding balance that are 90 days or 180 days past due as of March 31, 2018. The change in the charge-off policy did not have a material impact on the Company’s consolidated financial statements for the year ended March 31, 2018. |
Property, equipment and software, net | Property, equipment and software, net Property, equipment and software acquired are stated at cost. Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives: Useful life Office equipment 3 - 5 years Vehicle 4 - 5 years Software 5 years Leasehold improvements over shorter of the lease term or estimated useful life The Company eliminates the cost and related accumulated depreciation and amortization of assets sold or otherwise retired from the accounts and includes any gains or losses from disposal of property, equipment and software are included in other income. The Company charges maintenance, repairs and minor renewals directly to expenses as incurred; major additions and betterment to equipment are capitalized. The following table summarizes the depreciation recognized in the consolidated statements of comprehensive income: Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Sales and marketing 7,368 — — Service and development 89,677 — — General and administrative 309,754 174,384 92,224 |
Impairment of long-lived assets | Impairment of long‑lived assets The carrying value of the long-lived assets are reviewed for impairment, whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to future undiscounted net cash flows expected to be generated by the assets. Such assets are considered to be impaired if the sum of the expected undiscounted cash flow is less than carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. No impairment loss was recognized for the years ended March 31, 2019, 2018 and 2017, respectively. |
Investment in equity securities | Investment in equity securities The Company's investment in equity securities mainly comprise of equity investments in privately held companies. Upon adoption of ASU 2016-01 on April 1, 2018, the Company elected to measure these investments at cost minus impairment, if any, adjusted up or down for observable price changes (i.e., prices in orderly transactions for the identical or similar investment of the same issuer). Any adjustment to the carrying amount is recorded in net income. The Company also makes qualitative assessment at each reporting period and if the assessment indicates that the fair value of the investment is less than the carrying value, the investment in equity securities will be written down to its fair value, with the difference between the fair value of the investment and its carrying amount as an impairment loss recorded in consolidated statements of comprehensive income. |
Advertising and promotion expenses | Advertising and promotion expenses The Company recognizes its advertising and promotion expenses as sales and marketing expense. Advertising expenses represent expenses for placing advertisements on television, radio and newspaper, as well as on Internet websites and search engines. Advertising and promotion cost are expensed as incurred. For the years ended March 31, 2019, 2018 and 2017, the advertising and promotion expense was US$28,485,825, US$11,925,499 and US$3,500,611, respectively. |
Research and development costs | Research and development costs The Company recognizes its research and development costs as service and development expense. Research and development costs are mainly labor cost of research and development department. For the years ended March 31, 2019, 2018 and 2017, research and development expense was US$1,151,371, US$2,816,991 and US$1,567,738, respectively, and included in service and development expense. |
Service and development expense | Service and development expense Service and development expense consists primarily of variable expenses and vendor costs, including costs related to credit assessment, customer and system support, payment processing services and collection associated with facilitating and servicing loan. |
Share-based compensation | Share‑based compensation Under the Amended and Restated 2016 Equity Incentive Plan, the Company grants share options to the Company's selected employees, and directors. Awards granted to employees with service conditions attached are measured at the fair value of the grant date and are recognized as an expense using straight-line method, net of estimated forfeitures, over the requisite service period, which is generally the vesting period. The estimate of forfeitures will be adjusted over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. Changes in estimated forfeitures will be recognized through a cumulative catch-up adjustment in the period of change and will also impact the amount of share-based compensation expense to be recognized in future periods. Awards granted to employees with performance conditions attached are measured at fair value of the grant date and are recognized as the compensation expenses in the period and thereafter when the performance goal becomes probable to achieve. Awards granted to employees with market conditions attached are measured at fair value on the grant date and are recognized as compensation expenses over the estimated requisite service period, regardless of whether the market condition has been satisfied if the requisite service period is fulfilled. Binomial option-pricing models are adopted to measure the value of awards at each grant date or measurement date. The determination of fair value is affected by assumptions relating to a number of complex and subjective variables, including but not limited to the expected share price volatility, actual and projected employee share option exercise behavior, risk-free interest rates and expected dividends. The use of the option-pricing model requires extensive actual employee exercise behavior data for the relative probability estimation purpose, and a number of complex assumptions. |
Treasury Stock | Treasury stock Treasury stock represents ordinary shares repurchased by the Company that are no longer outstanding and are held by the Company. The repurchase of ordinary shares is accounted for under the cost method whereby the entire cost of the acquired share is recorded as treasury stock. The cost of treasury stock is transferred to "additional paid-in capital" when it is re-issued for the purpose of share options exercised and share awards. |
Income taxes | Income taxes The Company's subsidiaries and its consolidated VIEs in the PRC are subject to the income tax laws of the relevant tax jurisdictions. No taxable income was generated outside the PRC for the years ended March 31, 2019, 2018 and 2017. The Company accounts for income tax under the asset and liability method, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of the events that have been included in the financial statements or tax returns. Under this method, deferred income taxes will be recognized if significant temporary differences between tax and financial statements occur. Valuation allowances are established against net deferred tax assets when it is more likely that some portion or all of the deferred tax asset will not be realized. As of March 31, 2018, no valuation allowance is considered necessary. The Company may be subject to challenges from taxing authorities regarding the amounts of taxes due. These challenges may alter the timing or amount of taxable income or deductions. Management determines whether the benefits of its tax positions are more‑likely‑than‑not of being sustained upon audit based on the technical merits of the tax position. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2019 and 2018, the Company did not have any significant unrecognized uncertain tax positions. All tax returns since the Company’s inception are still subject to examination by tax authorities. The Company does not believe that its unrecognized tax benefits will change over the next twelve months. The Company is subject to VAT at the rate of 6% and related surcharges on revenue generated from providing services. VAT is reported as a reduction to revenue when incurred and amounted to US$4,855,988, US$7,399,115 and US$1,775,692 for the years ended March 31, 2019, 2018 and 2017, respectively. VAT payable balance is included in the taxes payable on the consolidated balance sheets. |
Earnings per share | Earnings per share The Company computes earnings per share ("EPS") in accordance with ASC 260, "Earnings per Share" ("ASC 260"). ASC 260 requires public companies with capital structures to present basic and diluted EPS. Basic EPS is measured as net income attributed to ordinary shareholders divided by the weighted average number of ordinary shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. |
Foreign currency translation | Foreign currency translation Since the Company operates primarily in the PRC, the Company’s functional currency is the Chinese Yuan (“RMB”). The Company’s financial statements have been translated into the reporting currency, the United States Dollar (“USD”). Assets and liabilities of the Company are translated at the exchange rate at each reporting period end date. Equity is translated at historical rates. Income and expense accounts are translated at the average exchange rate during the reporting period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss). Transactions denominated in currencies other than functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded in the “other income (expense)” in the consolidated statements of comprehensive income. The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that any RMB amounts could have been, or could be, converted, realized or settled into USD at the rates used in translation. |
Segment reporting | Segment reporting The Company's chief operating decision maker, the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and accessing performance of the Company as a whole and hence, the Company has only one operating and one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company's long-lived assets are substantially all located in the PRC and substantially all of the Company's revenue and expense are derived from within the PRC. Therefore, no geographical segments are presented. |
Significant risks and uncertainties | Significant risks and uncertainties Foreign currency risk RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The Company’s cash and cash equivalents denominated in RMB amounted to US$22,975,442 and US$85,234,545 as at March 31, 2019 and 2018, respectively. Concentration of credit risk Financial instrument that potentially expose the Company to significant concentration of credit risk primarily included in the financial lines of cash and cash equivalents, accounts receivable and contract assets, loan receivables, interest receivables and prepayments and other assets. As of March 31, 2019, substantially all of the Company’s cash and cash equivalents were deposited in financial institutions located in the PRC. According to the China Bank Deposit Insurance Ordinance, the deposits at each bank is covered by insurance with an upper limit of 500 thousands RMB at each bank. Accounts receivable and contract assets are typically unsecured and are derived from revenue earned from customers in the PRC. The risk with respect to accounts receivable is mitigated by credit evaluations the Company performs on its customers and its ongoing monitoring process of outstanding balances. There are no revenues from customers which individually represent greater than 10% of the total net revenues for any year of the three years ended March 31, 2019. There are no customers of the Company that accounted for greater than 10% of the Company’s carrying amount of accounts receivable as of March 31, 2019 and 2018. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02). ASU 2016-02 requires an entity to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about the entity’s leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For operating leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. For public business entities, the guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. For all other entities, guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application of the guidance is permitted. In transition, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-10 Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842), Targeted Improvements. ASU No. 2018-10 affects narrow aspects of the guidance issued in the amendments in Update 2016-02 and ASU No. 2018-11 allows for an additional optional transition method where comparative periods presented in the financial statements in the period of adoption will not be restated and instead, companies will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company intends to make this election. The amendments in these updates are effective for the Company for fiscal years beginning on April 1, 2019, including interim periods within those years, with early adoption permitted. The Company has performed an assessment of the impact of the adoption of the amendments in these updates on the Company's consolidated balance sheets and results of operations for the Company's leases, which primarily consist of operating leases for office space and equipment. Based on our preliminary assessment, the Company expect to record a right-of-use asset of approximately US$ 2.7 million and a lease liability of approximately US$ 2.7 million on the adoption date of April 1, 2019, primarily related to our leased office space. The Company will use a modified retrospective approach under ASU 2018-11 and will not restate prior periods. The Company expects to implement new accounting policies as well as to elect certain practical expedients available to us under ASU 2016-02, including those related to leases with terms of less than 12 months. In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which will be effective in fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early application of the guidance is permitted. In transition, entities are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements to (1) add an optional transition method that would permit entities to apply the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption, and (2) provide a practical expedient for lessors regarding the separation of the lease and non-lease components of a contract. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. The Company is evaluating the impact this ASU will have on its consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework -Changes to the Disclosure Requirements for Fair Value Measurement (“ASU No. 2018-13”). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. ASU No. 2018-13 removes the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation processes for Level 3 fair value measurements. It also adds a requirement to disclose changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and to disclose the range and weighted average of significant unobservable inputs used to develop recurring and nonrecurring Level 3 fair value measurements. For certain unobservable inputs, entities may disclose other quantitative information in lieu of the weighted average if the other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop the Level 3 fair value measurement. In addition, public entities are required to provide information about the measurement uncertainty of recurring Level 3 fair value measurements from the use of significant unobservable inputs if those inputs reasonably could have been different at the reporting date. ASU No. 2018-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Entities are permitted to early adopt either the entire standard or only the provisions that eliminate or modify the requirements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company is still evaluating the impact of adopting ASU No. 2018-13 on its financial statements, but does not expect the adoption of ASU No. 2018-13 to have a material impact on its consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows. |
BUSINESS DESCRIPTION (Tables)
BUSINESS DESCRIPTION (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
BUSINESS DESCRIPTION | |
Schedule of the Company's principal subsidiaries and consolidated VIEs | Date of Place of Percentage of incorporation incorporation legal ownership Principal activities Wholly owned subsidiaries Hexindai Hong Kong Limited ("HK Hexindai") May 17, 2016 Hong Kong 100% Investment holding Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") August 8, 2016 PRC 100% Provision of consultancy and information technology ("IT") support Tianjin Haohongyuan Technology Co., Ltd ("Tianjin Haohongyuan”) May 25, 2018 PRC 100% Provision of consultancy and IT support HX Asia Investment Limited June 25, 2018 BVI 100% Investment holding HX China Investment Limited January 16, 2019 BVI 100% Investment holding VIEs Hexin E-Commerce Co., Ltd ("Hexin E-Commerce") March 7, 2014 PRC Consolidated VIE Service for online marketplace connecting borrowers and investors Wusu Hexin Internet Small Loan Co., Ltd ("Wusu Company”)* August 28, 2017 PRC Consolidated VIE Provision of online micro-lending business Hexin E-Commerce’s subsidiaries Tianjin Qinghe E-Commerce Co., Ltd (“Tianjin Qinhe”) July 14, 2017 PRC Consolidated VIE Provision of consultancy and IT support Tianjin Bozhishuntai Technology Co., Ltd ("Tianjin Bozhishuntai”) October 27, 2017 PRC Consolidated VIE Provision of consultancy and IT support Horgos Qinhe Electronic Technology Co., Ltd (“Horgos Qinhe”) November 29, 2017 PRC Consolidated VIE Provision of consultancy and IT support Horgos Bozhishuntai Venture Capital Co., Ltd. ("Horgos Bozhishuntai”) November 28, 2017 PRC Consolidated VIE Investment Consultancy Trust 1 December 26,2018 PRC Consolidated Trust Host of beneficial right asset * Hexin E-commerce contributed RMB 500 million (US$74.5 million) to Wusu Company with its own funds. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of financial statement amounts and balances of the consolidated VIEs | As of As of March 31, 2019 March 31, 2018 USD USD Current Assets: Cash and cash equivalents 19,048,168 132,622,467 Accounts receivable and contract assets 418,639 — Loans receivable-current, net of provision for loan losses 36,540,627 28,696,234 Interest receivable — 555,502 Prepayments and other assets 2,928,471 1,248,562 Total Current Assets 58,935,905 163,122,765 Loans receivable-non-current, net of provision for loan losses 39,760,643 — Property, equipment and software, net 1,253,723 767,087 Deferred tax assets 3,721,177 — Total Assets 103,671,448 163,889,852 Current Liabilities Accrued expenses and other current liabilities 2,048,601 3,786,955 Deferred revenue-current 110,726 — Taxes payable 9,359,828 20,059,828 Total Current Liabilities 11,519,155 23,846,783 Deferred revenue-non-current 189,958 — Total Liabilities 11,709,113 23,846,783 Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Net revenue 61,145,315 107,257,841 22,920,543 Net income 14,570,310 68,124,874 8,572,227 Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Net cash provided by operating activities 721,269 92,794,537 10,477,027 Net cash used in investing activities (51,541,988) (27,623,791) (287,765) Net cash (used in) provided by financing activities — (2,447,161) 1,487 |
Schedule of amounts and balances of the consolidated Bohai Trust 1 | As of March 31, 2019 USD Current Assets: Cash 2,885,106 Other receivables 29,801 Loan receivables 64,103 Total assets 2,979,010 Year ended March 31, 2019 USD Revenue Net loss (1,084) Year ended March 31, 2019 USD Net cash provided by operating activities 2,949,209 Net cash used in investing activity (64,103) Net cash used in financing activity — |
Disaggregation of revenue | Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Revenue Loan facilitation service 66,782,312 117,984,295 25,636,661 Loan management service — 508,948 2,678,557 Post-origination service 11,418,182 4,213,862 1,219,897 Recommendation service 858,796 — — Interest income 3,552,983 590,122 — Others 1,491 21,434 59,756 82,613,764 123,318,661 29,594,871 Tax and surcharges (773,382) (890,414) (171,862) Cash incentives (20,509,878) (15,170,406) (1,629,316) Risk reserve liability charges — — (4,873,150) Net Revenue 61,330,504 107,257,841 22,920,543 |
Schedule of estimated useful lives of property, equipment and software, net | Property, equipment and software acquired are stated at cost. Depreciation and amortization are calculated using the straight-line method over the following estimated useful lives: Useful life Office equipment 3 - 5 years Vehicle 4 - 5 years Software 5 years Leasehold improvements over shorter of the lease term or estimated useful life |
Schedule of the depreciation of property, equipment and software recognized | Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Sales and marketing 7,368 — — Service and development 89,677 — — General and administrative 309,754 174,384 92,224 |
ASU 2014-09 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of impacts of the adoption of ASC | The impacts of the adoption of ASC 606 in the year ended March 31, 2019 on consolidated statement of income are shown below. Impacts of ASC606 Balances without Impacted consolidated statement of income items As Reported Adoption ASC 606 Adoption USD USD USD Net revenue 61,330,504 189,686 61,520,190 Net income 5,532,581 189,686 5,722,267 The impacts of the adoption of ASC 606 as of March 31, 2019, including the cumulative effects of the change, on consolidated balance sheet are shown below. Impacts of ASC606 Balances without Impacted consolidated balance sheet items As Reported Adoption ASC 606 Adoption USD USD USD Equity: Retained earnings 69,768,756 189,686 69,958,442 |
ACCOUNTS RECEIVABLE AND CONTR_2
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS | |
Schedule of accounts receivable and contract assets | As of As of March 31, 2019 March 31, 2018 USD USD Accounts receivable 140,639 — Contract assets 278,000 — 418,639 — |
LOANS RECEIVABLE, NET (Tables)
LOANS RECEIVABLE, NET (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
LOANS RECEIVABLE, NET | |
Schedule of loans receivable | As of As of March 31, 2019 March 31, 2018 USD USD Loans receivable 77,448,759 28,696,234 Allowance for uncollectible loans receivable (1,083,385) — Loans receivable, net 76,365,374 28,696,234 Loans receivable, net – current 36,554,913 28,696,234 Loans receivable, net – non-current 39,810,461 — |
Schedule of movement of allowance for uncollectible loans receivable | Year ended Year ended March 31, 2019 March 31, 2018 USD USD Balance at beginning of the year — — Provision for allowance of uncollectible loans receivable 1,084,225 — Foreign currency translation adjustments (840) — Balance at end of the year 1,083,385 — |
PREPAYMENT AND OTHER ASSETS (Ta
PREPAYMENT AND OTHER ASSETS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
PREPAYMENT AND OTHER ASSETS | |
Schedule of prepayment and other assets | As of As of March 31, 2019 March 31, 2018 USD USD Rental and other deposits 1,161,423 404,409 Prepayments to suppliers and others 2,168,386 781,049 Staff advances 5,156 63,104 3,334,965 1,248,562 |
PROPERTY, EQUIPMENT AND SOFTW_2
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |
Schedule of property, equipment and software, net | As of As of March 31, 2019 March 31, 2018 Cost: USD USD Office equipment 1,440,817 590,801 Vehicle 59,903 58,405 Leasehold improvements 140,769 150,612 Software 357,783 331,583 Total 1,999,272 1,131,401 Less: Accumulated depreciation (745,549) (364,314) Property, equipment and software, net 1,253,723 767,087 |
LONG TERM INVESTMENTS (Tables)
LONG TERM INVESTMENTS (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
LONG TERM INVESTMENTS | |
Schedule of Long Term Investments | As of As of March 31, 2019 March 31, 2018 USD USD Investment in equity security without readily determinable fair value Phoenix Intelligent Credit Group Ltd (“Phoenix Intelligent Credit”) (a) 29,189,836 — Musketeer Group Inc. (“Musketeer”) (b) 1,600,000 — 30,789,836 — (a) On December 10, 2018, the Company signed an agreement to acquire a 5.88% equity stake in Phoenix Intelligent Credit Group Ltd (“Phoenix Intelligent Credit”), a wholly owned subsidiary of Phoenix Financial Group Ltd (“Phoenix Finance”) and operator of one of China’s leading peer-to-peer lending platforms, for a total consideration of approximately US$29 million (or RMB200 million). The acquisition was completed as of March 31, 2019 and the Company still had an acquisition price payable to Phoenix Finance in the amount of US$14,289,371 as of March 31, 2019, which was fully paid in April 2019. Pursuant to the investment agreement, such investment is redeemable at the option of the Company if certain future performance condition cannot be met. The Company accounted the investment as investment in equity security without readily determinable fair value. (b) On August 9, 2018, the Company acquired a 19.99% equity stake in Musketeer Group Inc. (“Musketeer”), an Indonesian online lending platform that offers consumption installment loans, for approximately US$1.6 million. Since Musketeer is a start-up company in its early stage with no readily determinable fair value, the investments were accounted for using the cost method. |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of As of March 31, 2019 March 31, 2018 USD USD Accrued payroll and welfare 1,016,704 2,036,472 Professional fee and other accrued expenses 830,734 760,769 Funds collected on behalf of employees for exercise of option 724,256 — Custodian Bank service fee (a) 219,405 989,714 2,791,099 3,786,955 (a) Since January 2017, the Company integrated our asset custody system with Jiangxi Bank. Under the terms of the agreement, all funds of borrowers and investors will be managed by Jiangxi Bank to ensure security and compliance with relevant the PRC laws and regulations. Jiangxi Bank independently administers payments to borrowers, investors and the Company as well as clearance and fund settlements associated with these payments. Jiangxi Bank charged us depositary service fee, recharge and collection fees and withdrawal fees according to types of service it provided. |
TAXES PAYABLE (Tables)
TAXES PAYABLE (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
TAXES PAYABLE | |
Schedule of taxes payable | As of As of March 31, 2019 March 31, 2018 USD USD Income tax payable 4,428,224 12,558,211 VAT payable 4,062,825 6,725,654 Other taxes payable 880,481 775,963 Total taxes payable 9,371,530 20,059,828 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
INCOME TAX | |
Schedule of components of the income tax provision (benefit) | Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Current 5,596,753 10,610,067 1,386,570 Deferred (3,724,081) 415,623 135,641 Total 1,872,672 11,025,690 1,522,211 |
Summary of net deferred tax assets resulting from differences between financial accounting basis and tax basis of assets and liabilities | As of As of March 31, 2019 March 31, 2018 USD USD Advertising expenses 3,721,177 — Provision for loan loss 271,056 — Net operating loss carry forwards 5,683 — Total deferred tax assets 3,997,916 Less: Valuation allowance (276,739) — Total net deferred tax assets 3,721,177 — |
Reconciliation of the PRC statutory rates to the company's effective tax rate | Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 PRC Income tax statutory rate 25 % 25.0 % 25.0 % Effect of tax holiday and preferential tax rate (48.1) % (10.7) % (10.0) % Effect of withholding income tax 17.8 % — — Non-deductible expenses 30.6 % 0.1 % 0.1 % Effective tax rate 25.3 % 14.4 % 15.1 % |
Schedule aggregate amount and per share effect of the tax holiday and preferential tax rate | Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD The aggregate amount of tax holiday and preferential tax rate 2,642,450 8,157,429 1,014,808 The aggregate effect on basic and diluted net income per share: - Basic 0.06 0.18 0.02 - Diluted 0.05 0.17 0.02 |
EARNINGS PER SHARE ("EPS") (Tab
EARNINGS PER SHARE ("EPS") (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
EARNINGS PER SHARE("EPS") | |
Schedule of computation of the basic and diluted net earnings per share information | Year ended Year ended Year ended March 31, 2019 March 31, 2018 March 31, 2017 USD USD USD Numerator: Net income attributable to Hexindai Inc.'s shareholders 5,532,581 65,481,973 8,570,864 Denominator: Weighted average number of ordinary shares outstanding-basic 48,693,162 44,977,780 42,331,200 Weighted average number of dilutive potential ordinary shares from share options 4,219,664 2,678,483 — Weighted average number of ordinary shares outstanding-diluted 52,912,826 47,656,263 42,331,200 Basic net income per share 0.11 1.46 0.20 Diluted net income per share 0.10 1.37 0.20 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
SHARE-BASED COMPENSATION | |
Schedule of stock option shares activities under the Company's 2016 Equity Incentive Plan | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life in Grant Date Intrinsic options Price Years Fair Value Value USD USD Outstanding as of March 31, 2016 — — — — — Option granted 6,312,000 1.28 4 3,512,693 — Option forfeited — — — — — Option exercised — — — — — Outstanding as of March 31, 2017 6,312,000 1.28 3 3,512,693 — Option granted — — — — Option forfeited (128,000) 1.28 — (71,233) (1,283,840) Option exercised — — — — — Outstanding, March 31, 2018 6,184,000 1.28 2 3,441,460 62,025,520 Number of Granted 208,400 8.60 2 791,920 — Number of Exercise (1,127,853) 1.03 — (627,662) — Number of Forfeit (278,469) 1.31 — (201,891) — Outstanding, March 31, 2019 4,986,078 1.18 1 3,403,827 7,954,959 Vested and exercisable, March 31, 2017 — — — — — Vested and exercisable, March 31, 2018 2,061,333 1.28 2 1,147,153 20,675,173 Vested and exercisable, March 31, 2019 4,861,604 0.99 1 2,930,826 7,954,959 |
Schedule of Company's RSUs activities under all incentive plans | Number of Restricted Shares Weighted-average grant date fair value USD Outstanding at March 31, 2018 — Granted 616,700 9.26 Vested (538,900) 9.26 Forfeited — Outstanding at March 31, 2019 77,800 9.26 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Mar. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future minimum lease payments under non-cancelable operating lease agreements | Minimum lease payment USD Years ending March 31, 2020 1,908,665 2021 919,408 2022 55,132 Total 2,883,205 |
BUSINESS DESCRIPTION (Details)
BUSINESS DESCRIPTION (Details) ¥ in Millions, $ in Millions | Sep. 15, 2017shares | Mar. 31, 2019CNY (¥) | Mar. 31, 2019USD ($) |
BUSINESS DESCRIPTION | |||
Ordinary shares issued (in shares) | 42,814,296 | ||
Hexin E-Commerce | Wusu Company | |||
BUSINESS DESCRIPTION | |||
Amount contributed | ¥ 500 | $ 74.5 | |
Hexindai Hong Kong Limited ("HK Hexindai") | |||
BUSINESS DESCRIPTION | |||
Ownership percentage in subsidiary | 100.00% | 100.00% | |
Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") | |||
BUSINESS DESCRIPTION | |||
Ownership percentage in subsidiary | 100.00% | 100.00% | |
Tianjin Haohongyuan Technology Co., Ltd (Tianjin Haohongyuan") | |||
BUSINESS DESCRIPTION | |||
Ownership percentage in subsidiary | 100.00% | 100.00% | |
HX Asia Investment Limited | |||
BUSINESS DESCRIPTION | |||
Ownership percentage in subsidiary | 100.00% | 100.00% | |
HX China Investment Limited | |||
BUSINESS DESCRIPTION | |||
Ownership percentage in subsidiary | 100.00% | 100.00% |
BUSINESS DESCRIPTION - Initial
BUSINESS DESCRIPTION - Initial Public Offering (Details) - USD ($) | Sep. 15, 2017 | Nov. 30, 2017 | Mar. 31, 2018 |
BUSINESS DESCRIPTION | |||
Proceeds from issuance of shares (in shares) | 42,814,296 | ||
Proceeds from IPO, net of offering costs | $ 43,273,702 | ||
IPO | |||
BUSINESS DESCRIPTION | |||
Issuance of shares | 43,273,702 | ||
Proceeds from IPO, net of offering costs | $ 43,300,000 | ||
Offering costs | $ 7,100,000 | $ 7,095,798 | |
Number of ordinary share represented by each American depositary shares | 1 | ||
American depositary shares ("ADS") | IPO | |||
BUSINESS DESCRIPTION | |||
Proceeds from issuance of shares (in shares) | 5,036,950 | ||
Issuance of shares, price per share (in dollars per share) | $ 10 | ||
Issuance of shares | $ 50,400,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | Jan. 01, 2018CNY (¥)agreement¥ / shares | Jan. 01, 2018USD ($) | Nov. 01, 2016itemagreement | Mar. 31, 2019CNY (¥)agreement | Mar. 31, 2019USD ($)agreement | Jan. 01, 2018USD ($)agreement | Aug. 28, 2017item |
Variable interest entity | |||||||
Number of equity pledge agreements | 3 | ||||||
Number of exclusive option agreements | 3 | ||||||
Number of loan agreements | 3 | 3 | 2 | 2 | 3 | ||
Term of the loan (in years) | 10 years | ||||||
Number of power of attorney documents | item | 3 | ||||||
Aggregate amount of loans to shareholders of Wusu Company | ¥ 30,000,000 | $ 4,500,000 | |||||
Wusu Company | |||||||
Variable interest entity | |||||||
Number of shareholders | item | 3 | ||||||
Wusu Company | Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") | |||||||
Variable interest entity | |||||||
Term of the loan (in years) | 10 years | 10 years | |||||
Purchase price of exclusive option | ¥ / shares | ¥ 10 | ||||||
Threshold value to enter into material contracts without the consent of the shareholders | ¥ 100,000 | $ 14,900 | |||||
Equity interest held by foreign investor (as a percent) | 100.00% | 100.00% | |||||
Hexin E-Commerce | Mr. Zhai | |||||||
Variable interest entity | |||||||
Percentage of equity interest held | 5.00% | ||||||
Two shareholders | Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") | |||||||
Variable interest entity | |||||||
Aggregate amount of loans to shareholders of Wusu Company | ¥ 30,000,000 | $ 4,500,000 | |||||
Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") | shareholders of Wusu Company | |||||||
Variable interest entity | |||||||
Aggregate amount of loans to shareholders of Wusu Company | ¥ 100,000,000 | $ 14,900,000 | |||||
Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") | Hexin E-Commerce | |||||||
Variable interest entity | |||||||
Aggregate amount of loans to shareholders of Wusu Company | 70,000,000 | ¥ 400,000,000 | $ 10,400,000 | ||||
Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") | Two shareholders | |||||||
Variable interest entity | |||||||
Aggregate amount of loans to shareholders of Wusu Company | ¥ | ¥ 30,000,000 | ||||||
Hexindai Hong Kong Limited ("HK Hexindai") | |||||||
Variable interest entity | |||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | |||||
Beijing Hexin Yongheng Technology Development Co., Ltd ("WOFE") | |||||||
Variable interest entity | |||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | |||||
Tianjin Haohongyuan Technology Co., Ltd (Tianjin Haohongyuan") | |||||||
Variable interest entity | |||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | |||||
HX Asia Investment Limited | |||||||
Variable interest entity | |||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | |||||
HX China Investment Limited | |||||||
Variable interest entity | |||||||
Ownership percentage in subsidiary | 100.00% | 100.00% | |||||
Wusu Company | Hexin E-Commerce | |||||||
Variable interest entity | |||||||
Ownership percentage in subsidiary | 70.00% | ||||||
Wusu Company | Mr.Wu | |||||||
Variable interest entity | |||||||
Ownership interest held by Non-controlling interest shareholders | 5.00% | ||||||
Wusu Company | Mr.Ming Jia | |||||||
Variable interest entity | |||||||
Ownership interest held by Non-controlling interest shareholders | 25.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated VIE (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Current Assets: | |||
Cash and cash equivalents | $ 57,372,128 | $ 132,622,467 | |
Accounts receivable and contract assets | 418,639 | ||
Loans receivable-current, net of provision for loan losses | 36,554,913 | 28,696,234 | |
Interest receivable | 555,502 | ||
Prepayments and other assets | 3,334,965 | 1,248,562 | |
TOTAL CURRENT ASSETS | 97,680,645 | 163,122,765 | |
Loans receivable- non-current, net of provision for loan losses | 39,810,461 | ||
Property, equipment and software, net | 1,253,723 | 767,087 | |
Deferred tax assets | 3,721,177 | ||
TOTAL ASSETS | 173,255,842 | 163,889,852 | |
Current Liabilities | |||
Accrued expenses and other current liabilities | 2,791,099 | 3,786,955 | |
Deferred revenue-current | 110,726 | ||
Taxes payable | 9,371,530 | 20,059,828 | |
TOTAL CURRENT LIABILITIES | 26,562,726 | 23,846,783 | |
Deferred revenue-non-current | 189,958 | ||
TOTAL LIABILITIES | 46,752,684 | 23,846,783 | |
Net revenue | 61,330,504 | 107,257,841 | $ 22,920,543 |
Net income | 5,532,581 | 65,510,625 | 8,570,864 |
Net cash provided by operating activities | (1,731,075) | 87,723,007 | 8,189,744 |
Net cash used in investing activities | (68,106,557) | (27,623,791) | (287,765) |
Net cash (used in) provided by financing activities | (29,377) | 47,516,258 | 4,288,646 |
Consolidated VIEs | |||
Current Assets: | |||
Cash and cash equivalents | 19,048,168 | 132,622,467 | |
Accounts receivable and contract assets | 418,639 | ||
Loans receivable-current, net of provision for loan losses | 36,540,627 | 28,696,234 | |
Interest receivable | 555,502 | ||
Prepayments and other assets | 2,928,471 | 1,248,562 | |
TOTAL CURRENT ASSETS | 58,935,905 | 163,122,765 | |
Loans receivable- non-current, net of provision for loan losses | 39,760,643 | ||
Property, equipment and software, net | 1,253,723 | 767,087 | |
Deferred tax assets | 3,721,177 | ||
TOTAL ASSETS | 103,671,448 | 163,889,852 | |
Current Liabilities | |||
Accrued expenses and other current liabilities | 2,048,601 | 3,786,955 | |
Deferred revenue-current | 110,726 | ||
Taxes payable | 9,359,828 | 20,059,828 | |
TOTAL CURRENT LIABILITIES | 11,519,155 | 23,846,783 | |
Deferred revenue-non-current | 189,958 | ||
TOTAL LIABILITIES | 11,709,113 | 23,846,783 | |
Net revenue | 61,145,315 | 107,257,841 | 22,920,543 |
Net income | 14,570,310 | 68,124,874 | 8,572,227 |
Net cash provided by operating activities | 721,269 | 92,794,537 | 10,477,027 |
Net cash used in investing activities | $ (51,541,988) | (27,623,791) | (287,765) |
Net cash (used in) provided by financing activities | $ (2,447,161) | $ 1,487 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated Trust (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Current Assets: | |||
Loan receivables | $ 76,365,374 | $ 28,696,234 | |
TOTAL ASSETS | 173,255,842 | 163,889,852 | |
Revenue | 61,330,504 | 107,257,841 | $ 22,920,543 |
Net loss | 5,532,581 | 65,481,973 | 8,570,864 |
Net cash provided by operating activities | (1,731,075) | 87,723,007 | 8,189,744 |
Net cash used in investing activity | (68,106,557) | (27,623,791) | (287,765) |
Net cash used in financing activity | $ (29,377) | $ 47,516,258 | $ 4,288,646 |
Consolidated revenue contributed by the VIEs and consolidated trust (as a percentage) | 99.70% | 100.00% | 100.00% |
Consolidated assets contributed by the VIEs and consolidated trust (as a percentage) | 59.80% | 100.00% | |
Consolidated liabilities contributed by the VIEs and consolidated trust (as a percentage) | 59.80% | 100.00% | |
Trust 1 | |||
Consolidated Trust | |||
Initial term of loan (in years) | 5 years | ||
Current Assets: | |||
Cash | $ 2,885,106 | ||
Other receivables | 29,801 | ||
Loan receivables | 64,103 | $ 0 | |
TOTAL ASSETS | 2,979,010 | ||
Revenue | 224 | ||
Net loss | (1,084) | ||
Net cash provided by operating activities | 2,949,209 | ||
Net cash used in investing activity | $ (64,103) |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) | 12 Months Ended | ||
Mar. 31, 2019USD ($)item | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Number of performance obligations | item | 2 | ||
Unsatisfied performance obligation | $ 1,938,000 | ||
Revenue | 82,613,764 | $ 123,318,661 | $ 29,594,871 |
Cash incentives accounted for as reduction of revenue | 20,509,878 | 15,170,406 | 1,629,316 |
Loan management service | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Revenue | 0 | 508,948 | 2,678,557 |
Loan recommendation service | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Revenue | 858,796 | ||
Interest | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Revenue | $ 3,552,983 | $ 590,122 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of revenue (Details) - USD ($) | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Apr. 01, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 82,613,764 | $ 123,318,661 | $ 29,594,871 | |
Tax and surcharges | (773,382) | (890,414) | (171,862) | |
Cash incentives | (20,509,878) | (15,170,406) | (1,629,316) | |
Risk reserve liability charges | (4,873,150) | |||
Net Revenue | 61,330,504 | 107,257,841 | 22,920,543 | |
Cumulative impact on accumulated retained earnings | 69,768,756 | 77,241,073 | ||
ASU 2014-09 | Restatement | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Revenue | 189,686 | |||
Cumulative impact on accumulated retained earnings | 189,686 | $ 189,686 | ||
Loan facilitation service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 66,782,312 | 117,984,295 | 25,636,661 | |
Loan management service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 0 | 508,948 | 2,678,557 | |
Post-origination service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,418,182 | 4,213,862 | 1,219,897 | |
Recommendation service revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 858,796 | |||
Interest | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,552,983 | 590,122 | 0 | |
Others | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,491 | $ 21,434 | $ 59,756 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impact of adoption of ASU 606 (Details) - USD ($) | 12 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | Apr. 01, 2018 | |
Disclosure related to modified retrospective adoption of ASC 606 | ||||
Net revenue | $ 61,330,504 | $ 107,257,841 | $ 22,920,543 | |
Net income | 5,532,581 | 65,481,973 | $ 8,570,864 | |
Equity: | ||||
Retained earnings | 69,768,756 | $ 77,241,073 | ||
ASU 2014-09 | Restatement | ||||
Disclosure related to modified retrospective adoption of ASC 606 | ||||
Net revenue | 189,686 | |||
Net income | 189,686 | |||
Equity: | ||||
Retained earnings | 189,686 | $ 189,686 | ||
ASU 2014-09 | Without ASC 606 Adoption | ||||
Disclosure related to modified retrospective adoption of ASC 606 | ||||
Net revenue | 61,520,190 | |||
Net income | 5,722,267 | |||
Equity: | ||||
Retained earnings | $ 69,958,442 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Assets (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Contract assets | $ 278,000 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Material Terms and Conditions of the Insurance Agreement (Details) - USD ($) | Feb. 01, 2018 | Feb. 01, 2017 | Mar. 31, 2019 | Mar. 31, 2018 |
Guarantee Plan | ||||
Guarantor Obligations [Line Items] | ||||
Percentage of service fee | 0.50% | |||
Insurance policy premium (in percentage) | 4.50% | |||
Insurance Agreement | ||||
Guarantor Obligations [Line Items] | ||||
Percentage of insurance fee on borrowings | 2.00% | |||
Percentage of loan default risk premium | 2.00% | |||
Percentage of service fee | 2.00% | |||
Claims for compensation outstanding | $ 0 | |||
Contingent liability | $ 0 | $ 0 | ||
Investor protection service | Insurance Agreement | ||||
Guarantor Obligations [Line Items] | ||||
Term of agreement (in years) | 1 year |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Guarantees Liabilities (Details) | Mar. 31, 2019USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Guarantees liabilities | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounts receivable, contract assets and allowance for uncollectible accounts and Loans receivable (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Guarantor Obligations [Line Items] | ||
Past-due accounts receivable | $ 0 | $ 0 |
Accounts receivable | 140,639 | 0 |
Allowance for uncollectible account receivable | $ 0 | $ 0 |
Minimum | ||
Guarantor Obligations [Line Items] | ||
Loans Receivable Term | 12 months | 12 months |
Interest rate (in percentage) | 6.00% | 6.00% |
Maximum | ||
Guarantor Obligations [Line Items] | ||
Loans Receivable Term | 36 months | 36 months |
Interest rate (in percentage) | 8.00% | 8.00% |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, equipment and software, net (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Depreciation recognized | $ 406,799 | $ 174,384 | $ 92,224 |
Sales and marketing | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Depreciation recognized | 7,368 | ||
Service and development | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Depreciation recognized | 89,677 | ||
General and administrative expense | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Depreciation recognized | $ 309,754 | $ 174,384 | $ 92,224 |
Software | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Estimated Useful Life | 5 years | ||
Minimum | Office equipment | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Estimated Useful Life | 3 years | ||
Minimum | Vehicle | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Estimated Useful Life | 4 years | ||
Maximum | Office equipment | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Estimated Useful Life | 5 years | ||
Maximum | Vehicle | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Estimated Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long lived assets, Advertising and promotion expenses and Research and development costs (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Advertising and promotion expenses | 28,485,825 | 11,925,499 | 3,500,611 |
Research and development costs | $ 1,151,371 | $ 2,816,991 | $ 1,567,738 |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Income taxes and segment reporting (Details) | 12 Months Ended | ||
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Taxable income was generated outside the PRC | $ 0 | $ 0 | $ 0 |
Valuation allowance | $ 276,739 | 0 | |
VAT percentage of revenue from services | 6.00% | ||
Value added tax | $ 4,855,988 | $ 7,399,115 | $ 1,775,692 |
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1 |
SUMMARY OF SIGNIFICANT ACCOU_17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Significant Risks and Uncertainties (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 57,372,128 | $ 132,622,467 |
RMB | ||
Cash and Cash Equivalents [Line Items] | ||
Cash and cash equivalents | $ 22,975,442 | $ 85,234,545 |
SUMMARY OF SIGNIFICANT ACCOU_18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - ASU 2016-02 - Restatement $ in Millions | Apr. 01, 2019USD ($) |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Rights-of-use assets | $ 2.7 |
Lease liabilities | $ 2.7 |
ACCOUNTS RECEIVABLE AND CONTR_3
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
ACCOUNTS RECEIVABLE AND CONTRACT ASSETS | ||
Accounts receivable | $ 140,639 | $ 0 |
Contract assets | 278,000 | $ 0 |
Total accounts receivable and contract assets | $ 418,639 |
LOANS RECEIVABLE, NET (Details)
LOANS RECEIVABLE, NET (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable | $ 77,448,759 | $ 28,696,234 |
Allowance for uncollectible loans receivable | (1,083,385) | |
Loans receivable, net | 76,365,374 | 28,696,234 |
Loans receivable, net - current | 36,554,913 | 28,696,234 |
Loans receivable, net - non-current | 39,810,461 | |
Loan receivable in non-accrual status | 0 | 0 |
Trust 1 | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable, net | $ 64,103 | $ 0 |
LOANS RECEIVABLE, NET - Movemen
LOANS RECEIVABLE, NET - Movement of allowance for uncollectible loans receivable (Details) | 12 Months Ended |
Mar. 31, 2019USD ($) | |
LOANS RECEIVABLE, NET | |
Provision for allowance of uncollectible loans receivable | $ 1,084,225 |
Foreign currency translation adjustments | (840) |
Ending balance | $ 1,083,385 |
PREPAYMENT AND OTHER ASSETS (De
PREPAYMENT AND OTHER ASSETS (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
PREPAYMENT AND OTHER ASSETS | ||
Rental and other deposits | $ 1,161,423 | $ 404,409 |
Prepayments to suppliers and others | 2,168,386 | 781,049 |
Staff advances | 5,156 | 63,104 |
Total prepayment and other assets | $ 3,334,965 | $ 1,248,562 |
PROPERTY, EQUIPMENT AND SOFTW_3
PROPERTY, EQUIPMENT AND SOFTWARE, NET (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Total | $ 1,999,272 | $ 1,131,401 | |
Less: Accumulated depreciation | (745,549) | (364,314) | |
Property, equipment and software, net | 1,253,723 | 767,087 | |
Depreciation and amortization | 406,799 | 174,384 | $ 92,224 |
Office equipment | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Total | 1,440,817 | 590,801 | |
Vehicle | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Total | 59,903 | 58,405 | |
Leasehold improvements | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Total | 140,769 | 150,612 | |
Software | |||
PROPERTY, EQUIPMENT AND SOFTWARE, NET | |||
Total | $ 357,783 | $ 331,583 |
LONG TERM INVESTMENTS (Details)
LONG TERM INVESTMENTS (Details) ¥ in Millions | Mar. 31, 2019USD ($) | Dec. 10, 2018CNY (¥) | Dec. 10, 2018USD ($) | Aug. 09, 2018USD ($) |
LONG TERM INVESTMENTS | ||||
Long term investments | $ 30,789,836 | |||
Consideration payable | 14,289,371 | |||
Phoenix Intelligent Credit | ||||
LONG TERM INVESTMENTS | ||||
Long term investments | 29,189,836 | |||
Equity stake acquired (as a percentage) | 5.88% | 5.88% | ||
Total consideration | ¥ 200 | $ 29,000,000 | ||
Consideration payable | 14,289,371 | |||
Musketeer | ||||
LONG TERM INVESTMENTS | ||||
Long term investments | $ 1,600,000 | |||
Equity stake acquired (as a percentage) | 19.99% | |||
Total consideration | $ 1,600,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||
Accrued payroll and welfare | $ 1,016,704 | $ 2,036,472 |
Professional fee and other accrued expenses | 830,734 | 760,769 |
Funds collected on behalf of employees for exercise of option | 724,256 | |
Custodian Bank service fee | 219,405 | 989,714 |
Accrued expenses and other liabilities, net | $ 2,791,099 | $ 3,786,955 |
NOTE PAYABLE (Details)
NOTE PAYABLE (Details) - Senior unsecured note $ in Millions | Mar. 29, 2019USD ($) |
NOTE PAYABLE | |
Loan principal amount | $ 20 |
Term of loan (in years) | 3 years |
Fixed interest rate | 12.00% |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
RELATED PARTY BALANCES AND TRANSACTIONS | ||
Amounts due from related parties | $ 0 | $ 0 |
Amounts due to related parties | $ 0 | $ 0 |
EMPLOYEE BENEFIT (Details)
EMPLOYEE BENEFIT (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
EMPLOYEE BENEFIT | |||
Amount of Contributions | $ 2,187,910 | $ 1,956,917 | $ 1,024,927 |
TAXES PAYABLE (Details)
TAXES PAYABLE (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
TAXES PAYABLE | ||
Income tax payable | $ 4,428,224 | $ 12,558,211 |
VAT payable | 4,062,825 | 6,725,654 |
Other taxes payable | 880,481 | 775,963 |
Total taxes payable | $ 9,371,530 | $ 20,059,828 |
INCOME TAX (Details)
INCOME TAX (Details) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
INCOME TAX | |||
Statutory tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
PRC | |||
INCOME TAX | |||
Statutory tax rate (as a percent) | 25.00% | ||
PRC | Hexin E-Commerce | High Technology Enterprises | |||
INCOME TAX | |||
Preferential tax rate (as a percent) | 15.00% | ||
Horgos Economic District | Horgos Qinhe | |||
INCOME TAX | |||
Preferential tax rate (as a percent) | 0.00% | ||
Period for preferred income tax rate | 5 years | ||
Horgos Economic District | Horgos Bozhishuntai | |||
INCOME TAX | |||
Preferential tax rate (as a percent) | 0.00% | ||
Period for preferred income tax rate | 5 years |
INCOME TAX - Components of the
INCOME TAX - Components of the income tax provision (benefit) (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
INCOME TAX | |||
Current | $ 5,596,753 | $ 10,610,067 | $ 1,386,570 |
Deferred | (3,724,081) | 415,623 | 135,641 |
Total | $ 1,872,672 | $ 11,025,690 | $ 1,522,211 |
INCOME TAX - Net deferred tax a
INCOME TAX - Net deferred tax assets resulting from differences between financial accounting basis and tax basis of assets and liabilities (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
INCOME TAX | ||
Advertising expenses | $ 3,721,177 | |
Provision for loan loss | 271,056 | |
Net operating loss carry forwards | 5,683 | $ 0 |
Total deferred tax assets | 3,997,916 | |
Less: Valuation allowance | (276,739) | $ 0 |
Total net deferred tax assets | $ 3,721,177 |
INCOME TAX - Reconciles the PRC
INCOME TAX - Reconciles the PRC statutory rates to the Company's effective tax rate (Details) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
INCOME TAX | |||
PRC Income tax statutory rate | 25.00% | 25.00% | 25.00% |
Effect of tax holiday and preferential tax rate | (48.10%) | (10.70%) | (10.00%) |
Effect of withholding income tax | 17.80% | ||
Non-deductible expenses | 30.60% | 0.10% | 0.10% |
Effective tax rate | 25.30% | 14.40% | 15.10% |
INCOME TAX - Others (Details)
INCOME TAX - Others (Details) | Jul. 23, 2018$ / shares | Jul. 19, 2018 | Mar. 31, 2019CNY (¥) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
INCOME TAX | |||||
Period of statue of limitation | 3 years | 3 years | |||
Period of statue of limitation in the case of underpayment of income taxes | 5 years | 5 years | |||
Income tax liability, maximum amount of underpayment | ¥ 100,000 | $ 14,900 | |||
Statue of limitation related to transfer pricing adjustment | 10 years | 10 years | |||
Undistributed earnings of the Company's PRC subsidiaries and VIEs | $ | $ 72,000,000 | $ 72,000,000 | |||
Withholding tax rate on dividend distributed by FIE | 10.00% | 10.00% | |||
Common stock, dividends declared (in dollars per share) | $ 0.40 | ||||
Withholding tax incurred | $ | $ 1,300,000 | ||||
Withholding income taxes for undistributed profits of the Company's subsidiaries | $ | $ 0 | $ 0 | |||
Annual dividend | |||||
INCOME TAX | |||||
Common stock, dividends declared (in dollars per share) | 0.27 | ||||
American depositary shares ("ADS") | |||||
INCOME TAX | |||||
Common stock, dividends declared (in dollars per share) | 0.40 | ||||
American depositary shares ("ADS") | Annual dividend | |||||
INCOME TAX | |||||
Common stock, dividends declared (in dollars per share) | $ 0.27 | ||||
Minimum | |||||
INCOME TAX | |||||
Rate of withholding tax for dividends paid by an FIE in China to its immediate holding company in Hong Kong under specified conditions | 10.00% | 10.00% | |||
Ownership percentage of the FIE by foreign investors to qualify for withholding tax rate limit for dividends paid by an FIE in China to its immediate holding company in Hong Kong | 25.00% | 25.00% | |||
Percentage of dividend (in percentage) | 15.00% | ||||
Maximum | |||||
INCOME TAX | |||||
Rate of withholding tax for dividends paid by an FIE in China to its immediate holding company in Hong Kong under specified conditions | 5.00% | 5.00% | |||
Ownership percentage of the FIE by foreign investors to qualify for withholding tax rate limit for dividends paid by an FIE in China to its immediate holding company in Hong Kong | 25.00% | 25.00% | |||
Percentage of dividend (in percentage) | 25.00% |
INCOME TAX - Tax Holiday and Pr
INCOME TAX - Tax Holiday and Preferential Tax Rate (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
INCOME TAX | |||
The aggregate amount of tax holiday and preferential tax rate | $ 2,642,450 | $ 8,157,429 | $ 1,014,808 |
The aggregate effect on basic net income per share (in dollars per share) | $ 0.06 | $ 0.18 | $ 0.02 |
The aggregate effect on diluted net income per share (in dollars per share) | $ 0.05 | $ 0.17 | $ 0.02 |
EARNINGS PER SHARE ("EPS") (Det
EARNINGS PER SHARE ("EPS") (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator: | |||
Net income attributable to Hexindai Inc.'s shareholders | $ 5,532,581 | $ 65,481,973 | $ 8,570,864 |
Denominator: | |||
Basic (in shares) | 48,693,162 | 44,977,780 | 42,331,200 |
Weighted average number of dilutive potential ordinary shares from share options | 4,219,664 | 2,678,483 | |
Weighted average number of ordinary shares outstanding-diluted | 52,912,826 | 47,656,263 | 42,331,200 |
Basic net income per share attributable to Hexindai's shareholders (in dollars per share) | $ 0.11 | $ 1.46 | $ 0.20 |
Diluted net income per share attributable to Hexindai's shareholders (in dollars per share) | $ 0.10 | $ 1.37 | $ 0.20 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 |
SHAREHOLDERS' EQUITY | ||
Ordinary shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Ordinary shares, par value (in US dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares outstanding (in shares) | 49,204,083 | 47,958,550 |
SHARE-BASED COMPENSATION - 2016
SHARE-BASED COMPENSATION - 2016 Equity Incentive Plan (Details) | Jul. 23, 2018$ / shares | Jul. 22, 2018$ / shares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Apr. 01, 2016$ / sharesshares | Mar. 31, 2019USD ($)Optioninstallment$ / sharesshares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares |
SHARE-BASED COMPENSATION | ||||||||
Common stock, dividends declared (in dollars per share) | $ 0.40 | |||||||
Aggregate Intrinsic Value | ||||||||
Outstanding | $ | $ 7,954,959 | |||||||
Vested and exercisable | $ | $ 20,675,173 | $ 20,675,173 | ||||||
American depositary shares ("ADS") | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Common stock, dividends declared (in dollars per share) | 0.40 | |||||||
2016 Equity Incentive Plan | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Option granted (in shares) | shares | 6,312,000 | 208,400 | 6,312,000 | |||||
Option granted (in dollars per shares) | 0.88 | $ 1.28 | $ 1.28 | $ 8.60 | $ 1.28 | |||
Common stock, dividends declared (in dollars per share) | 0.40 | |||||||
Number of installments for vested and become exercisable | installment | 3 | |||||||
Percentage of remaining options to be vested | 67.00% | |||||||
Options vested remaining installments | installment | 2 | |||||||
Maximum contractual term (in years) | 4 years | |||||||
Threshold for the unvested options to expire (in years) | 2 years | |||||||
Stock options, vesting period (in years) | 3 years | |||||||
Fair value of options granted to employees | ||||||||
Fair market value per share | $ 1.41 | |||||||
Exercise price per share | $ 1.28 | |||||||
Risk-free interest rate | 1.81% | |||||||
Dividend yield | 0.00% | |||||||
Life of option | 4 years | |||||||
Volatility | 47.40% | |||||||
Exercise multiple | Option | 2.2 | |||||||
Number of options | ||||||||
Outstanding at beginning of year (in shares) | shares | 6,184,000 | 6,312,000 | ||||||
Option granted (in shares) | shares | 6,312,000 | 208,400 | 6,312,000 | |||||
Number of Exercise (in shares) | shares | (1,127,853) | |||||||
Option forfeited (in shares) | shares | (278,469) | (128,000) | ||||||
Outstanding at end of year (in shares) | shares | 6,184,000 | 6,312,000 | 4,986,078 | 6,184,000 | 6,312,000 | |||
Vested and exercisable (in shares) | shares | 2,061,333 | 4,861,604 | 2,061,333 | |||||
Weighted Average Exercise Price | ||||||||
Outstanding at beginning of year (in dollars per shares) | $ 1.28 | $ 1.28 | ||||||
Option granted (in dollars per shares) | 0.88 | $ 1.28 | $ 1.28 | 8.60 | $ 1.28 | |||
Number of Exercise (in dollars per share) | 1.03 | |||||||
Option forfeited (in dollars per shares) | 1.31 | 1.28 | ||||||
Outstanding at end of year (in dollars per shares) | $ 1.28 | $ 1.28 | 1.18 | 1.28 | $ 1.28 | |||
Vested and exercisable (in dollars per share) | $ 1.28 | $ 0.99 | $ 1.28 | |||||
Weighted Average Remaining Life in Years | ||||||||
Option granted (in years) | 2 years | 4 years | ||||||
Outstanding at end of period | 2 years | 3 years | 1 year | |||||
Vested and exercisable (in years) | 1 year | 2 years | ||||||
Grant Date Fair Value | ||||||||
Outstanding at beginning of year | $ | $ 3,441,460 | $ 3,512,693 | ||||||
Option granted | $ | 791,920 | $ 3,512,693 | ||||||
Number of Exercise | $ | (627,662) | |||||||
Option forfeited | $ | (201,891) | (71,233) | ||||||
Outstanding at end of year | $ | $ 3,441,460 | $ 3,512,693 | 3,403,827 | 3,441,460 | $ 3,512,693 | |||
Vested and exercisable | $ | 2,930,826 | 1,147,153 | ||||||
Aggregate Intrinsic Value | ||||||||
Forfeited | $ | (1,283,840) | (1,283,840) | ||||||
Outstanding | $ | $ 62,025,520 | $ 62,025,520 | ||||||
Vested and exercisable | $ | $ 7,954,959 | |||||||
2016 Equity Incentive Plan | American depositary shares ("ADS") | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Common stock, dividends declared (in dollars per share) | $ 0.40 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Units (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
SHARE-BASED COMPENSATION | |||
Number of common stocks represented by each RSU | 1 | ||
Weighted- average grant date fair value | |||
Forfeiture percentage | 13.04% | 13.04% | 0.00% |
Fair value of stock option and RSU on the grant date | $ 3,500,000 | ||
Share-based compensation expense | 6,585,386 | $ 1,828,868 | $ 0 |
Unrecognized compensation cost | $ 518,891 | $ 1,163,825 | |
Period of unrecognized compensation cost expected to be recognized (in years) | 1 year | ||
Restricted Stock Units | |||
SHARE-BASED COMPENSATION | |||
Vesting period | 3 years | ||
Number of Restricted Shares | |||
Granted (in shares) | 616,700 | ||
Vested (in shares) | (538,900) | ||
Outstanding at end of year (in shares) | 77,800 | ||
Weighted- average grant date fair value | |||
Granted (in dollars per share) | $ 9.26 | ||
Vested (in dollars per share) | 9.26 | ||
Outstanding at end of year (in dollars per share) | $ 9.26 | ||
Restricted Stock Units | First Anniversary of the date of grant | |||
SHARE-BASED COMPENSATION | |||
Vesting Rights | 33.00% | ||
Restricted Stock Units | Second and third anniversary of the grant date | |||
SHARE-BASED COMPENSATION | |||
Vesting Rights | 67.00% |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) | Dec. 10, 2018 | Mar. 31, 2019 |
Total consideration on repurchase of shares | $ 1,320,468 | |
Ads | ||
Number of shares to be repurchased (in shares) | $ 25,000,000 | |
Term of repurchase (in months) | 12 months | |
Shares repurchased (in shares) | 421,220 | |
Total consideration on repurchase of shares | $ 1,320,468 |
DIVIDEND (Details)
DIVIDEND (Details) - USD ($) | Jul. 23, 2018 | Jul. 19, 2018 | Mar. 31, 2019 |
Common stock, dividends declared (in dollars per share) | $ 0.40 | ||
Aggregated dividend payments | $ 19,547,532 | ||
American depositary shares ("ADS") | |||
Common stock, dividends declared (in dollars per share) | 0.40 | ||
Annual dividend | |||
Common stock, dividends declared (in dollars per share) | 0.27 | ||
Annual dividend | American depositary shares ("ADS") | |||
Common stock, dividends declared (in dollars per share) | 0.27 | ||
Special cash dividend | |||
Common stock, dividends declared (in dollars per share) | 0.13 | ||
Special cash dividend | American depositary shares ("ADS") | |||
Common stock, dividends declared (in dollars per share) | $ 0.13 | ||
Minimum | |||
Percentage of dividend (in percentage) | 15.00% | ||
Maximum | |||
Percentage of dividend (in percentage) | 25.00% |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) - USD ($) | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
RESTRICTED NET ASSETS | ||
Restricted net assets | $ 104,300,000 | $ 51,000,000 |
Required percentage of net income allocated to statutory surplus reserve | 10.00% | |
Threshold percentage of statutory surplus reserves of the registered capital, used as criteria of allocation requirement | 50.00% | |
Statutory reserve | $ 8,952,951 | $ 7,475,902 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Lease Commitments | |||
Rental expenses under operating leases | $ 2,219,743 | $ 1,163,326 | $ 720,314 |
Lease term | 3 years | ||
Contingent rental payments | $ 0 | ||
Future minimum lease payments under non cancelable operating lease agreements | |||
2020 | 1,908,665 | ||
2021 | 919,408 | ||
2022 | 55,132 | ||
Total | 2,883,205 | ||
Contingencies | |||
Contingent liability | $ 0 | $ 0 |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Details) | 12 Months Ended |
Mar. 31, 2019 | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | |
Required percentage of net income allocated to statutory surplus reserve | 10.00% |
Threshold percentage of statutory surplus reserves of the registered capital, used as criteria of allocation requirement | 50.00% |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CONDENSED BALANCE SHEETS (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 |
ASSETS: | ||
TOTAL ASSETS | $ 173,255,842 | $ 163,889,852 |
LIABILITIES: | ||
Accrued expenses and other current liabilities | 2,791,099 | 3,786,955 |
Note payable | 20,000,000 | |
Consideration payable | 14,289,371 | |
TOTAL LIABILITIES | 46,752,684 | 23,846,783 |
SHAREHOLDERS' EQUITY: | ||
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 49,625,303 and 47,958,550 shares issued and 49,204,083 and 47,958,550 shares outstanding as of March 31, 2019 and 2018, respectively. | 4,963 | 4,796 |
Additional paid-in capital | 59,806,865 | 58,417,971 |
Treasury stock | (1,320,468) | |
Retained earnings | 69,768,756 | 77,241,073 |
Accumulated other comprehensive (loss) income | (1,756,958) | 4,379,229 |
TOTAL SHAREHOLDERS' EQUITY | 126,503,158 | 140,043,069 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 173,255,842 | $ 163,889,852 |
Ordinary shares, par value (in US dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued (in shares) | 49,625,303 | 47,958,550 |
Ordinary shares, shares outstanding (in shares) | 49,204,083 | 47,958,550 |
Parent Company | ||
ASSETS: | ||
Cash | $ 24,828,067 | $ 47,387,922 |
Prepayment and other assets | 349,990 | 9,995 |
Investments in subsidiaries, VIEs and VIEs' subsidiaries | 135,632,715 | 95,543,469 |
TOTAL ASSETS | 160,810,772 | 142,941,386 |
LIABILITIES: | ||
Accrued expenses and other current liabilities | 18,243 | 2,898,317 |
Note payable | 20,000,000 | |
Consideration payable | 14,289,371 | |
TOTAL LIABILITIES | 34,307,614 | 2,898,317 |
SHAREHOLDERS' EQUITY: | ||
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 49,625,303 and 47,958,550 shares issued and 49,204,083 and 47,958,550 shares outstanding as of March 31, 2019 and 2018, respectively. | 4,963 | 4,796 |
Additional paid-in capital | 59,806,865 | 58,417,971 |
Treasury stock | (1,320,468) | |
Retained earnings | 69,768,756 | 77,241,073 |
Accumulated other comprehensive (loss) income | (1,756,958) | 4,379,229 |
TOTAL SHAREHOLDERS' EQUITY | 126,503,158 | 140,043,069 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 160,810,772 | $ 142,941,386 |
Ordinary shares, par value (in US dollars per share) | $ 0.0001 | $ 0.0001 |
Ordinary shares, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Ordinary shares, shares issued (in shares) | 49,625,303 | 47,958,550 |
Ordinary shares, shares outstanding (in shares) | 49,204,083 | 47,958,550 |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
PARENT COMPANY CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | |||
General administrative expense and others | $ (9,928,512) | $ (5,816,130) | $ (2,645,605) |
NET INCOME ATTRIBUTABLE TO HEXINDAI'S SHAREHOLDERS | 5,532,581 | 65,481,973 | 8,570,864 |
OTHER COMPREHENSIVE INCOME | |||
Foreign currency translation adjustment | (6,136,187) | 6,028,143 | (1,080,036) |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO HEXINDAI'S SHARESHOLDERS | (603,606) | 71,405,954 | 7,490,828 |
Parent Company | |||
PARENT COMPANY CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | |||
Equity in earnings of subsidiaries, VIEs and VIEs' subsidiaries | 14,725,415 | 68,117,762 | 8,570,978 |
General administrative expense and others | (9,192,834) | (2,607,137) | (114) |
NET INCOME ATTRIBUTABLE TO HEXINDAI'S SHAREHOLDERS | 5,532,581 | 65,510,625 | 8,570,864 |
OTHER COMPREHENSIVE INCOME | |||
Foreign currency translation adjustment | (6,136,187) | 6,028,143 | (1,080,036) |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO HEXINDAI'S SHARESHOLDERS | $ (603,606) | $ 71,538,768 | $ 7,490,828 |
CONDENSED FINANCIAL INFORMATI_5
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CONDENSED STATEMENTS OF CASH FLOWS (Details) - USD ($) | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 5,532,581 | $ 65,481,973 | $ 8,570,864 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share-based compensation | 6,585,386 | 1,828,868 | |
Changes in operating assets and liabilities: | |||
Prepayments and other assets | (2,168,873) | 3,111,369 | (2,456,342) |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (1,731,075) | 87,723,007 | 8,189,744 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of long term investments | (16,500,465) | ||
NET CASH USED IN INVESTING ACTIVITIES | (68,106,557) | (27,623,791) | (287,765) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from private placement offering, net of offering cost | 2,000,000 | ||
Proceeds from IPO, net of offering costs | 43,273,702 | ||
Exercise of share options | 1,156,623 | ||
Proceeds from issuance of unsecured note | 20,000,000 | ||
Repurchase of treasury stock | (1,320,468) | ||
Payments for offering cost | (318,000) | ||
Dividend paid | (19,547,532) | ||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (29,377) | 47,516,258 | 4,288,646 |
NET (DECREASE) INCREASE IN CASH | (75,250,339) | 113,390,192 | 11,413,339 |
CASH AND CASH EQUIVALENTS - beginning of year | 132,622,467 | 19,232,275 | 7,818,936 |
CASH AND CASH EQUIVALENTS - end of year | 57,372,128 | 132,622,467 | 19,232,275 |
SUPPLEMENTAL CASH FLOW DISCLOSURES: | |||
Cash paid for income tax | 12,248,230 | 1,016,958 | 300,601 |
Parent Company | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 5,532,581 | 65,510,625 | 8,570,864 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in subsidiaries, VIEs and VIEs' subsidiaries | (14,725,415) | (68,117,762) | (8,570,978) |
Share-based compensation | 6,585,386 | 1,828,868 | |
Changes in operating assets and liabilities: | |||
Prepayments and other assets | (339,995) | 44,295 | (50,009) |
Accrued expenses and other current liabilities | (2,562,074) | 2,898,317 | |
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES | (5,509,517) | 2,164,343 | (50,123) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Increase in investment in subsidiaries, VIEs and VIE's subsidiaries | (15,420,961) | ||
Purchase of long term investments | (1,600,000) | ||
NET CASH USED IN INVESTING ACTIVITIES | (17,020,961) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from private placement offering, net of offering cost | 2,000,000 | ||
Proceeds from IPO, net of offering costs | 43,273,702 | ||
Exercise of share options | 1,156,623 | ||
Proceeds from issuance of unsecured note | 20,000,000 | ||
Repurchase of treasury stock | (1,320,468) | ||
Payments for offering cost | (318,000) | ||
Dividend paid | (19,547,532) | ||
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (29,377) | 43,273,702 | 2,000,000 |
NET (DECREASE) INCREASE IN CASH | (22,559,855) | 45,438,045 | 1,949,877 |
CASH AND CASH EQUIVALENTS - beginning of year | 47,387,922 | 1,949,877 | |
CASH AND CASH EQUIVALENTS - end of year | $ 24,828,067 | $ 47,387,922 | $ 1,949,877 |