Impairment and Receivables Management - The company recognized impairment losses on receivables from finance leases amounting to RMB 14 million due to increased recovery risk from three default agreements[3]. - As of December 31, 2021, the total outstanding amount related to the impairment agreements was RMB 61.1 million, with an impairment loss provision of RMB 23.2 million[4]. - The company initiated legal or arbitration proceedings for all impairment agreements that have been overdue for more than 90 days[3]. - The company has written off a total of RMB 12.2 million in receivables due to six default agreements, with full impairment provisions made[25][27]. - The total amount of receivables written off is RMB 12.2 million, which has been fully provisioned for impairment and will not impact the company's current profit and loss[37]. - The board believes there is no reasonable expectation of recovering debts that have been overdue for more than 5 years, considering multiple claims against the counterparty[1]. - The board has assessed that there is no reasonable expectation of recovering debts that have been overdue for more than 6 years[32]. - The company has engaged in lengthy legal and arbitration procedures without recovering debts from counterparties due to a lack of enforceable assets[2]. - The board has determined that the costs of further litigation may exceed the remaining receivables, leading to the decision not to pursue these debts[1]. Credit Risk Assessment - The company assessed expected credit losses based on the expected credit loss model as of the reporting date, in accordance with Hong Kong Financial Reporting Standard 9[12]. - The financial instruments are categorized into three stages based on credit risk, with the first stage representing 12-month expected credit losses[14]. - The second stage includes financial instruments with significant increases in credit risk but not yet recognized as impaired, typically involving assets overdue by 30 to 90 days[14]. - The third stage involves financial instruments recognized as impaired, typically those overdue by more than 90 days[14]. - The estimated expected credit loss for impaired receivables is based on the estimated recoverable value of collateral, adjusted by a discount rate ranging from approximately 19% to 37%[15]. Collateral and Recovery Efforts - The total value of collateral for 38 parking lots is estimated at RMB 7.1 million, with each parking lot starting at a price of RMB 188,000 in public auction[16]. - The collateral valuation considers factors such as geographical location, disposal difficulty, estimated disposal time and costs, and the present value of cash flows generated by the collateral[18][19]. - The company has recovered part of the receivables in previous cases but has faced challenges in enforcing collection due to a lack of assets[3]. - The company has initiated legal proceedings to recover debts when other recovery methods have failed, including applying for enforcement procedures in court[46]. Risk Management and Due Diligence - The company has implemented a comprehensive and effective risk management system, including multi-layered assessment and approval procedures based on the credit status of customers[38]. - The company has conducted due diligence and risk assessments before signing any financing lease agreements, ensuring compliance with business process management regulations[38]. - The company has implemented a comprehensive due diligence and risk assessment process for potential projects, including background checks on counterparties and financial data analysis[39]. - Background checks on the ultimate beneficial owners of counterparties include their education, employment, and entrepreneurial experience[41]. - The company has conducted SWOT analysis on counterparties to assess their business environment[41]. - The company has maintained strict post-authorization management and regular reviews of write-off agreements[46]. Financial Performance and Reporting - The company expects to receive a total of RMB 15 million from a settlement agreement with a related party, with the first payment due on January 10, 2022[11]. - The company has established a payment schedule under a settlement agreement, totaling RMB 15 million, to be paid in six installments[20]. - The company has ensured that all information in the performance announcement is accurate and complete, with no misleading or fraudulent elements[47]. - The financial data analysis includes monthly revenue, sales inventory, and profit margins over the last two years[41]. - The company has analyzed the profitability and operational costs of sale and leaseback assets, including projected profitability[41].
百应控股(08525) - 2021 Q4 - 年度财报