EX-99.3 4 xny_ex993.htm UNAUDITED PRO FORMA FINANCIAL STATEMENTS xny_ex993.htm

EXHIBIT 99.3

 

Unaudited Pro Forma Financial Statements

 

Assumptions

 

In December 2017, China Xiniya Fashion Limited (“CXFL”) (the “Company”) completed the divestiture of Xiniya Holding Limited (“XHL”), its wholly-owned subsidiary, to Qiming Investment Limited (“QIL”) with consideration of RMB228.0 million. At the same time, CXFL acquired True Silver Limited (“TSL”) with consideration of RMB228.0 million in cash and 772,283,308 newly issued ordinary shares at RMB1.00 per share.

 

The unaudited pro forma financial statements have been prepared by applying pro forma adjustments to CXFL’s historical Consolidated Financial Statements prepared in accordance with International Financial Reporting Standards (“IFRS”) and accounted for the divestiture of the XHL and acquisition of TSL. The unaudited pro forma Statements of Operations for the nine months ended September 30, 2017 and for the fiscal years ended December 31, 2016, 2015 and 2014 assume that the divestiture of the XHL occurred at the first day of each period. The unaudited pro forma Balance Sheet as of September 30, 2017 and for the fiscal years ended December 31, 2016, 2015 and 2014 assume that the divestiture of the XHL occurred at the first day of each period.

 

The unaudited pro forma financial statements are presented based on currently available information and are intended for informational purposes only. These unaudited pro forma financial statements are not necessarily indicative of what CXFL’s results of operations or financial condition would have been had the divestiture and acquisition been completed on the dates assumed. In addition, they are not necessarily indicative of CXFL’s future results of operations or financial condition.

 

 
1
 
 

 

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2017 (Expressed in Thousands)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments(a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

Current assets

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Cash and cash equivalents

 

 

 53,471

 

 

 

 174,529

 

 

 

 228,000

 

 

 

 10,917

 

 

 

 (230,157 )

 

b

 

 

 8,760

 

 

 

 1,316

 

Interest receivables

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 27,457

 

 

 

 

 

 

 

 

 

 27,457

 

 

 

 4,127

 

Trade receivables

 

 

 259,868

 

 

 

 (259,868 )

 

 

 -

 

 

 

 756,891

 

 

 

 

 

 

 

 

 

 756,891

 

 

 

 113,762

 

Other receivables

 

 

 114,030

 

 

 

 (114,030 )

 

 

 -

 

 

 

 32,234

 

 

 

 

 

 

 

 

 

 32,234

 

 

 

 4,845

 

Inventories

 

 

 69,721

 

 

 

 (69,721 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total current assets

 

 

 497,090

 

 

 

 (269,090 )

 

 

 228,000

 

 

 

 827,499

 

 

 

 

 

 

 

 

 

 825,342

 

 

 

 124,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 1,115

 

 

 

 (1,115 )

 

 

 -

 

 

 

 448

 

 

 

 

 

 

 

 

 

 448

 

 

 

 67

 

Intangible assets

 

 

 24,676

 

 

 

 (24,676 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Other long-term assets

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Prepaid expenses – non current

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total assets

 

 

 522,881

 

 

 

 (294,881 )

 

 

 228,000

 

 

 

 827,947

 

 

 

 

 

 

 

 

 

 825,790

 

 

 

 124,117

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan payables

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 198,410

 

 

 

 

 

 

 

 

 

 198,410

 

 

 

 29,821

 

Trade payables

 

 

 64,721

 

 

 

 (64,721 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Other payables

 

 

 116,229

 

 

 

 (116,229 )

 

 

 93

 

 

 

 33,784

 

 

 

 

 

 

 

 

 

 33,877

 

 

 

 5,092

 

Current income tax payable

 

 

 2,413

 

 

 

 (2,413 )

 

 

 -

 

 

 

 3,863

 

 

 

 

 

 

 

 

 

 3,863

 

 

 

 581

 

Total liabilities

 

 

 183,363

 

 

 

 (183,363 )

 

 

 93

 

 

 

 236,057

 

 

 

 

 

 

 

 

 

 236,150

 

 

 

 35,494

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

 339,518

 

 

 

 (111,518 )

 

 

 227,907

 

 

 

 591,890

 

 

 

 (230,157 )

 

c

 

 

 589,640

 

 

 

 88,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

 

 522,881

 

 

 

 (294,881 )

 

 

 228,000

 

 

 

 827,947

 

 

 

 

 

 

 

 

 

 825,790

 

 

 

 124,117

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
2
 
 

 

 

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Nine Months Ended September 30, 2017 (Expressed in Thousands, except per share information)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments

(a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Revenue

 

 

 244,870

 

 

 

 (244,870 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest income on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 46,752

 

 

 

 

 

 

 

 

 46,752

 

 

 

 7,027

 

Fees on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 1,063

 

 

 

 

 

 

 

 

 1,063

 

 

 

 160

 

Cost of sales

 

 

 (220,874 )

 

 

 220,874

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest expenses on loans

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (14,853 )

 

 

 

 

 

 

 

 (14,853 )

 

 

 (2,232 )

Provision for loan losses

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (276 )

 

 

 

 

 

 

 

 (276 )

 

 

 (42 )

Business related taxes and surcharges

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Gross (loss)/profit

 

 

 23,996

 

 

 

 (23,996 )

 

 

 -

 

 

 

 32,686

 

 

 

 

 

 

 

 

 32,686

 

 

 

 4,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 871

 

 

 

 (871 )

 

 

 -

 

 

 

 217

 

 

 

 

 

 

 

 

 217

 

 

 

 33

 

Selling and distribution expenses

 

 

 (57,783 )

 

 

 57,783

 

 

 

 -

 

 

 

 (1,787 )

 

 

 

 

 

 

 

 (1,787 )

 

 

 (269 )

Administrative expenses

 

 

 (14,055 )

 

 

 9,670

 

 

 

 (4,385 )

 

 

 (14,842 )

 

 

 2,157

 

 

d

 

 

 (17,070 )

 

 

 (2,566 )

(Loss)/income before income taxes

 

 

 (46,971 )

 

 

 42,586

 

 

 

 (4,385 )

 

 

 16,274

 

 

 

 

 

 

 

 

 

 14,046

 

 

 

 2,111

 

Income taxes

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (4,068 )

 

 

 

 

 

 

 

 

 (4,068 )

 

 

 (611 )

Net (loss)/income

 

 

 (46,971 )

 

 

 42,586

 

 

 

 (4,385 )

 

 

 12,206

 

 

 

 

 

 

 

 

 

 9,978

 

 

 

 1,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the company (80%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 9,765

 

 

 

 

 

 

 

 

 

 7,982

 

 

 

 1,200

 

Non-controlling interests (20%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 2,441

 

 

 

 

 

 

 

 

 

 1,996

 

 

 

 300

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 12,206

 

 

 

 

 

 

 

 

 

 9,978

 

 

 

 1,500

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
3
 
 

 

Unaudited Pro Forma Condensed Combined Balance Sheet

As of December 31, 2016 (Expressed in Thousands)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments (a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

Current assets

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Cash and cash equivalents

 

 

 35,168

 

 

 

 192,832

 

 

 

 228,000

 

 

 

 96,791

 

 

 

 (230,157 )

 

b

 

 

 94,634

 

 

 

 13,630

 

Interest receivables

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 18,730

 

 

 

 

 

 

 

 

 

 18,730

 

 

 

 2,697

 

Trade receivables

 

 

 281,634

 

 

 

 (281,634 )

 

 

 -

 

 

 

 675,341

 

 

 

 

 

 

 

 

 

 675,341

 

 

 

 97,269

 

Other receivables

 

 

 126,894

 

 

 

 (126,894 )

 

 

 -

 

 

 

 11,157

 

 

 

 

 

 

 

 

 

 11,157

 

 

 

 1,606

 

Inventories

 

 

 62,905

 

 

 

 (62,905 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total current assets

 

 

 506,601

 

 

 

 (278,601 )

 

 

 228,000

 

 

 

 802,019

 

 

 

 

 

 

 

 

 

 799,862

 

 

 

 115,204

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 2,172

 

 

 

 (2,172 )

 

 

 -

 

 

 

 778

 

 

 

 

 

 

 

 

 

 778

 

 

 

 112

 

Intangible assets

 

 

 36,934

 

 

 

 (36,934 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total assets

 

 

 545,707

 

 

 

 (317,707 )

 

 

 228,000

 

 

 

 802,797

 

 

 

 

 

 

 

 

 

 800,640

 

 

 

 115,316

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan payables

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 200,470

 

 

 

 

 

 

 

 

 

 200,470

 

 

 

 28,873

 

Trade payables

 

 

 16,812

 

 

 

 (16,812 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Other payables

 

 

 138,523

 

 

 

 (138,005 )

 

 

 518

 

 

 

 8,679

 

 

 

 

 

 

 

 

 

 9,198

 

 

 

 1,325

 

Current income tax payable

 

 

 2,413

 

 

 

 (2,413 )

 

 

 -

 

 

 

 13,963

 

 

 

 

 

 

 

 

 

 13,963

 

 

 

 2,011

 

Total liabilities

 

 

 157,748

 

 

 

 (157,230 )

 

 

 518

 

 

 

 223,112

 

 

 

 

 

 

 

 

 

 223,631

 

 

 

 32,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

 387,959

 

 

 

 (160,477 )

 

 

 227,482

 

 

 

 579,685

 

 

 

 (230,157 )

 

c

 

 

 577,010

 

 

 

 83,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

 

 545,707

 

 

 

 (317,707 )

 

 

 228,000

 

 

 

 802,797

 

 

 

 

 

 

 

 

 

 800,641

 

 

 

 115,316

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
4
 
 

 

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2016 (Expressed in Thousands)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments

(a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Revenue

 

 

 266,820

 

 

 

 (266,820 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest income on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 83,920

 

 

 

 

 

 

 

 

 83,920

 

 

 

 12,087

 

Fees on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 20,976

 

 

 

 

 

 

 

 

 20,976

 

 

 

 3,021

 

Cost of sales

 

 

 (365,066 )

 

 

 365,066

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest expenses on loans

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (22,151 )

 

 

 

 

 

 

 

 (22,151 )

 

 

 (3,190 )

Provision for loan losses

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (6,360 )

 

 

 

 

 

 

 

 (6,360 )

 

 

 (916 )

Business related taxes and surcharges

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (1,152 )

 

 

 

 

 

 

 

 (1,152 )

 

 

 (166 )

Gross (loss)/profit

 

 

 (98,246 )

 

 

 98,246

 

 

 

 -

 

 

 

 75,233

 

 

 

 

 

 

 

 

 75,233

 

 

 

 10,836

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 2,822

 

 

 

 (2,296 )

 

 

 526

 

 

 

 1,772

 

 

 

 

 

 

 

 

 2,298

 

 

 

 331

 

Selling and distribution expenses

 

 

 (229,247 )

 

 

 229,247

 

 

 

 -

 

 

 

 (4,899 )

 

 

 

 

 

 

 

 (4,899 )

 

 

 (706 )

Administrative expenses

 

 

 (20,618 )

 

 

 16,655

 

 

 

 (3,963 )

 

 

 (14,937 )

 

 

 2,157

 

 

d

 

 

 (16,743 )

 

 

 (2,411 )

(Loss)/income before income taxes

 

 

 (345,289 )

 

 

 341,852

 

 

 

 (3,437 )

 

 

 57,169

 

 

 

 

 

 

 

 

 

 55,889

 

 

 

 8,050

 

Income taxes

 

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 (15,221 )

 

 

 

 

 

 

 

 

 (15,221 )

 

 

 (2,192 )

Net (loss)/income

 

 

 (345,289 )

 

 

 341,852

 

 

 

 (3,437 )

 

 

 41,948

 

 

 

 

 

 

 

 

 

 40,668

 

 

 

 5,858

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the company (80%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 33,558

 

 

 

 

 

 

 

 

 

 32,534

 

 

 

 4,686

 

Non-controlling interests (20%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 8,390

 

 

 

 

 

 

 

 

 

 8,134

 

 

 

 1,172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 41,948

 

 

 

 

 

 

 

 

 

 40,668

 

 

 

 5,858

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
5
 
 

 

Unaudited Pro Forma Condensed Combined Balance Sheet

As of December 31, 2015 (Expressed in Thousands)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments

(a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

Current assets

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Cash and cash equivalents

 

 

 203,371

 

 

 

 24,629

 

 

 

 228,000

 

 

 

 65,741

 

 

 

 (230,157 )

 

b

 

 

 63,584

 

 

 

 9,819

 

Interest receivables

 

 

 14,479

 

 

 

 (14,479 )

 

 

 -

 

 

 

 3,856

 

 

 

 

 

 

 

 

 

 3,856

 

 

 

 595

 

Trade receivables

 

 

 569,522

 

 

 

 (569,522 )

 

 

 -

 

 

 

 466,995

 

 

 

 

 

 

 

 

 

 466,995

 

 

 

 72,114

 

Other receivables

 

 

 111,698

 

 

 

 (111,698 )

 

 

 -

 

 

 

 443

 

 

 

 

 

 

 

 

 

 443

 

 

 

 68

 

Inventories

 

 

 14,364

 

 

 

 (14,364 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total current assets

 

 

 913,434

 

 

 

 (685,434 )

 

 

 228,000

 

 

 

 537,035

 

 

 

 

 

 

 

 

 

 534,878

 

 

 

 82,596

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 3,843

 

 

 

 (3,843 )

 

 

 -

 

 

 

 1,305

 

 

 

 

 

 

 

 

 

 1,305

 

 

 

 202

 

Intangible assets

 

 

 17,462

 

 

 

 (17,462 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total assets

 

 

 934,739

 

 

 

 (706,739 )

 

 

 228,000

 

 

 

 538,340

 

 

 

 

 

 

 

 

 

 536,183

 

 

 

 82,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan payables

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 149,220

 

 

 

 

 

 

 

 

 

 149,220

 

 

 

 23,043

 

Trade payables

 

 

 6,913

 

 

 

 (6,913 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Other payables

 

 

 193,654

 

 

 

 (193,543 )

 

 

 111

 

 

 

 11,253

 

 

 

 

 

 

 

 

 

 11,364

 

 

 

 1,755

 

Current income tax payable

 

 

 2,413

 

 

 

 (2,413 )

 

 

 -

 

 

 

 16,360

 

 

 

 

 

 

 

 

 

 16,360

 

 

 

 2,526

 

Total liabilities

 

 

 202,980

 

 

 

 (202,869 )

 

 

 111

 

 

 

 176,833

 

 

 

 

 

 

 

 

 

 176,944

 

 

 

 27,324

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

 731,759

 

 

 

 (503,870 )

 

 

 227,889

 

 

 

 361,507

 

 

 

 (230,157 )

 

c

 

 

 359,239

 

 

 

 55,474

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

 

 934,739

 

 

 

 (706,739 )

 

 

 228,000

 

 

 

 538,340

 

 

 

 

 

 

 

 

 

 536,183

 

 

 

 82,798

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
6
 
 

 

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2015 (Expressed in Thousands)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments

(a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Revenue

 

 

 472,166

 

 

 

 (472,166 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest income on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 68,012

 

 

 

 

 

 

 

 

 68,012

 

 

 

 10,499

 

Fees on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 31,895

 

 

 

 

 

 

 

 

 31,895

 

 

 

 4,924

 

Cost of sales

 

 

 (741,172 )

 

 

 741,172

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest expenses on loans

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (16,075 )

 

 

 

 

 

 

 

 (16,075 )

 

 

 (2,481 )

Provision for loan losses

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (9,396 )

 

 

 

 

 

 

 

 (9,396 )

 

 

 (1,451 )

Business related taxes and surcharges

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (5,685 )

 

 

 

 

 

 

 

 (5,685 )

 

 

 (878 )

Gross (loss)/profit

 

 

 (269,006 )

 

 

 269,006

 

 

 

 -

 

 

 

 68,751

 

 

 

 

 

 

 

 

 68,751

 

 

 

 10,613

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 18,095

 

 

 

 (16,319 )

 

 

 1,776

 

 

 

 476

 

 

 

 

 

 

 

 

 2,252

 

 

 

 348

 

Selling and distribution expenses

 

 

 (269,448 )

 

 

 269,448

 

 

 

 -

 

 

 

 (4,236 )

 

 

 

 

 

 

 

 (4,236 )

 

 

 (654 )

Administrative expenses

 

 

 (25,220 )

 

 

 21,458

 

 

 

 (3,762 )

 

 

 (10,295 )

 

 

 2,157

 

 

d

 

 

 (11,900 )

 

 

 (1,837 )

(Loss)/income before income taxes

 

 

 (545,579 )

 

 

 543,593

 

 

 

 (1,986 )

 

 

 54,696

 

 

 

 

 

 

 

 

 

 54,867

 

 

 

 8,470

 

Income taxes

 

 

 (54,760 )

 

 

 54,760

 

 

 

 -

 

 

 

 (17,841 )

 

 

 

 

 

 

 

 

 (17,841 )

 

 

 (2,754 )

Net (loss)/income

 

 

 (600,339 )

 

 

 598,353

 

 

 

 (1,986 )

 

 

 36,855

 

 

 

 

 

 

 

 

 

 37,026

 

 

 

 5,716

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the company (80%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 29,484

 

 

 

 

 

 

 

 

 

 29,621

 

 

 

 4,573

 

Non-controlling interests (20%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 7,371

 

 

 

 

 

 

 

 

 

 7,405

 

 

 

 1,143

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 36,855

 

 

 

 

 

 

 

 

 

 37,026

 

 

 

 5,716

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
7
 
 

 

Unaudited Pro Forma Condensed Combined Balance Sheet

As of December 31, 2014 (Expressed in Thousands)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments(a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

Current assets

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Cash and cash equivalents

 

 

 1,055,097

 

 

 

 (827,097 )

 

 

 228,000

 

 

 

 15,270

 

 

 

 (230,157 )

 

b

 

 

 13,113

 

 

 

 2,113

 

Interest receivables

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 11,758

 

 

 

 

 

 

 

 

 

 11,758

 

 

 

 1,895

 

Trade receivables

 

 

 278,446

 

 

 

 (278,446 )

 

 

 -

 

 

 

 417,586

 

 

 

 

 

 

 

 

 

 417,586

 

 

 

 67,303

 

Other receivables

 

 

 106,246

 

 

 

 (106,246 )

 

 

 -

 

 

 

 418

 

 

 

 

 

 

 

 

 

 418

 

 

 

 68

 

Inventories

 

 

 97,800

 

 

 

 (97,800 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total current assets

 

 

 1,537,589

 

 

 

 (1,309,589 )

 

 

 228,000

 

 

 

 445,032

 

 

 

 

 

 

 

 

 

 442,875

 

 

 

 71,379

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 5,316

 

 

 

 (5,316 )

 

 

 -

 

 

 

 1,906

 

 

 

 

 

 

 

 

 

 1,906

 

 

 

 307

 

Intangible assets

 

 

 6,379

 

 

 

 (6,379 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Other long-term assets

 

 

 63,614

 

 

 

 (63,614 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Total assets

 

 

 1,612,898

 

 

 

 (1,384,898 )

 

 

 228,000

 

 

 

 446,938

 

 

 

 

 

 

 

 

 

 444,781

 

 

 

 71,686

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loan payables

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 80,040

 

 

 

 

 

 

 

 

 

 80,040

 

 

 

 12,900

 

Trade payables

 

 

 45,288

 

 

 

 (45,288 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Other payables

 

 

 234,093

 

 

 

 (232,853 )

 

 

 1,240

 

 

 

 11,246

 

 

 

 

 

 

 

 

 

 12,486

 

 

 

 2,013

 

Current income tax payable

 

 

 2,413

 

 

 

 (2,413 )

 

 

 -

 

 

 

 12,651

 

 

 

 

 

 

 

 

 

 12,651

 

 

 

 2,039

 

Total liabilities

 

 

 281,794

 

 

 

 (280,554 )

 

 

 1,240

 

 

 

 103,937

 

 

 

 

 

 

 

 

 

 105,177

 

 

 

 16,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

 

 1,331,104

 

 

 

 (1,104,344 )

 

 

 226,760

 

 

 

 343,001

 

 

 

 (230,157 )

 

c

 

 

 339,604

 

 

 

 54,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

 

 1,612,898

 

 

 

 (1,384,898 )

 

 

 228,000

 

 

 

 446,938

 

 

 

 

 

 

 

 

 

 444,781

 

 

 

 71,686

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
8
 
 

 

Unaudited Pro Forma Condensed Combined Statement of Operations

For the Year Ended December 31, 2014 (Expressed in Thousands)

 

 

 

CXFL

Historical

 

 

XHL Divestiture

Pro Forma Adjustments

(a)

 

 

Pro Forma Results (Adjusted for Divestiture of XHL)

 

 

TSL (Acquiree)

Historical

 

 

Pro Forma Adjustments (Acquisition of TSL)

 

 

 

Pro Forma Results

(Combined)

 

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

RMB

 

 

Note

 

RMB

 

 

USD

 

Revenue

 

 

 380,169

 

 

 

 (380,169 )

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest income on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 57,941

 

 

 

 

 

 

 

 

 57,941

 

 

 

 9,338

 

Fees on loan

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 27,778

 

 

 

 

 

 

 

 

 27,778

 

 

 

 4,477

 

Cost of sales

 

 

 (431,540 )

 

 

 431,540

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 -

 

 

 

 -

 

Interest expenses on loans

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (8,032 )

 

 

 

 

 

 

 

 (8,032 )

 

 

 (1,294 )

Provision for loan losses

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (5,756 )

 

 

 

 

 

 

 

 (5,756 )

 

 

 (928 )

Business related taxes and surcharges

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (4,921 )

 

 

 

 

 

 

 

 (4,921 )

 

 

 (793 )

Gross (loss)/profit

 

 

 (51,371 )

 

 

 51,371

 

 

 

 -

 

 

 

 67,010

 

 

 

 

 

 

 

 

 67,010

 

 

 

 10,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 22,271

 

 

 

 (21,185 )

 

 

 1,086

 

 

 

 12

 

 

 

 

 

 

 

 

 1,098

 

 

 

 177

 

Selling and distribution expenses

 

 

 (166,158 )

 

 

 164,440

 

 

 

 (1,718 )

 

 

 (2,150 )

 

 

 

 

 

 

 

 (3,868 )

 

 

 (623 )

Administrative expenses

 

 

 (30,178 )

 

 

 26,399

 

 

 

 (3,779 )

 

 

 (8,582 )

 

 

 2,157

 

 

d

 

 

 (10,204 )

 

 

 (1,645 )

(Loss)/income before income taxes

 

 

 (225,436 )

 

 

 221,025

 

 

 

 (4,411 )

 

 

 56,290

 

 

 

 

 

 

 

 

 

 54,036

 

 

 

 8,709

 

Income taxes

 

 

 54,760

 

 

 

 (54,760 )

 

 

 -

 

 

 

 (14,636 )

 

 

 

 

 

 

 

 

 (14,636 )

 

 

 (2,359 )

Net (loss)/income

 

 

 (170,676 )

 

 

 166,265

 

 

 

 (4,411 )

 

 

 41,654

 

 

 

 

 

 

 

 

 

 39,400

 

 

 

 6,350

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the company (80%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 33,323

 

 

 

 

 

 

 

 

 

 31,520

 

 

 

 5,080

 

Non-controlling interests (20%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 8,331

 

 

 

 

 

 

 

 

 

 7,880

 

 

 

 1,270

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 41,654

 

 

 

 

 

 

 

 

 

 39,400

 

 

 

 6,350

 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 
9
 
 

 

Notes to the Unaudited Pro Forma Financial Statements

 

 

 a. The XHL Divestiture Pro Forma Adjustments column in the unaudited pro forma information represents the historical financial results of the XHL and cash consideration of such transaction.

 

 

 

 

 b. Represents the payment of the estimated transaction costs related to the TSL acquisition and cash consideration of the transaction.

 

 

 

 

 c. Represents the elimination of the historical equity of TSL and the issuance of common shares to finance the acquisition. And the financial information for TSL has been adjusted to take into account the 20% non-controlling interest in Hubei Chutian Microfinance Co., Ltd., a variable interest entity of TSL.

 

 

 

 

 d. Represents the estimated transaction costs related to the TSL acquisition.

 

 

 

 

 e. Represents the increase in the weighted average shares in connection with the issuance of 772,283,308 common shares to finance the acquisition.

 

 

 

 

 f. The United States dollar ($) amounts disclosed in this pro-forma are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the exchange rate of:

 

 

 · $1 = RMB6.6533 on September 30, 2017 for unaudited pro forma condensed combined balance sheet as of September 30, 2017 and for unaudited pro forma condensed combined statement of operations for the nine months period ended September 30, 2017;

 

 

 · $1 = RMB6.9430 on December 31, 2016 for unaudited pro forma condensed combined balance sheet as of December 31, 2016 and for unaudited pro forma condensed combined statement of operations for the year ended December 31, 2016;

 

 

 · $1 = RMB6.4778 on December 31, 2015 for unaudited pro forma condensed combined balance sheet as of December 31, 2015 and for unaudited pro forma condensed combined statement of operations for the year ended December 31, 2015; and

 

 

 

 

 · $1 = RMB6.2046 on December 31, 2014 for unaudited pro forma condensed combined balance sheet as of December 31, 2014 and for unaudited pro forma condensed combined statement of operations for the year ended December 31, 2014; 

 

 

 

as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into $ at those rates mentioned above, or at any other date.

 

 

 

 

 g. Profit attributable to owners of the Company represents 80% controlling interest of our company through the VIE arrangement. Upon Closing, XNY will be deemed to control 80% of Chutian and have rights to consolidate only 80% of Chutian’s audited financial results, the remaining 20% non-controlling interests relates to 20% controlling interest of Hubei Daily Media Group.

 

 10