Impairment and Credit Losses - The company recognized impairment losses of RMB 7.8 million, RMB 7.3 million, and RMB 10.8 million for loans to an associate, a non-controlling shareholder of a subsidiary, and receivables from a non-controlling shareholder of a subsidiary, respectively[2]. - The company plans to monitor the financial conditions of its associates and subsidiaries to assess the need for further impairment provisions[42]. - The company has recognized an impairment provision for loans to Jin Ping Guo, amounting to RMB 1,880,000 in unpaid interest and RMB 20,414,000 in overdue trade receivables as of December 31, 2021[43]. - The expected credit loss for loans to a non-controlling shareholder of a subsidiary is calculated at approximately RMB 7,300,000, based on a principal amount of RMB 18,000,000 and a default rate of 48.48%[54]. - The expected credit loss for receivables from a non-controlling shareholder of a subsidiary is estimated at approximately RMB 10,800,000, calculated from RMB 22,324,000 at a default rate of 48.48%[54]. Loans and Financial Support - The total loans to the associate company amounted to RMB 16 million, with the associate reporting a net loss of approximately RMB 5.6 million for the year ended December 31, 2021[42]. - The company provided a loan of RMB 18 million to a non-controlling shareholder, with an interest receivable of RMB 1.88 million as of December 31, 2021[41]. - The loans to the associate and non-controlling shareholder are intended for operational funding needs[12][30]. - The company has established a 36-month term for the loan to the non-controlling shareholder with an annual interest rate of 8%[37]. - The company expects to recover the loans and interest within one year from the respective borrowers[41]. Credit Risk Management - The company will continue to evaluate the credit risk associated with its loans and receivables based on historical experience and financial conditions[42]. - The company employs an expected credit loss model for assessing credit risk and impairment of financial assets, considering the financial conditions of borrowers[46]. - The internal credit rating for loans to a joint venture company is classified as Ca-C, with a corresponding default rate of 48.48% based on Moody's 2021 default report[50]. - The internal credit rating for receivables from related parties is assessed as Caa1 to Ca-C, depending on the financial condition of the borrowers[48]. - The company’s credit risk exposure primarily arises from trade receivables, loans to joint ventures, and loans to non-controlling shareholders[45]. - The company’s management has determined that the credit ratings for borrowers are based on historical loss experience and market data[49]. Legal and Recovery Actions - Legal correspondence was issued on July 5, 2021, regarding unpaid interest from a non-controlling shareholder of a subsidiary, Guangdong Jinpingguo Co., Ltd.[57]. - The company is coordinating with its legal advisors on recovery actions against the debtor[57]. - The company is in ongoing discussions regarding loans to Guangdong Quancheng Health Beverage Co., Ltd. with the borrower and guarantor[57]. Credit Risk Mitigation - The company has no collateral or other credit enhancements for its financial assets, but some credit risk has been mitigated through collateral from local private companies[45]. - The company will continuously review and negotiate with counterparties of loans and advances to mitigate financial impacts[55].
嘉士利集团(01285) - 2021 Q4 - 年度财报