China Jushi FY2003: Cash generation and working capital

The FY2003 consolidated statements report CNY 852.23100095 million of main-business revenue, compared with CNY 651.26487813 million in the report's 2002 comparison. Main-business profit was CNY 272.07260408 million after CNY 578.88367834 million of cost and CNY 1.27471853 million of main-business taxes and surcharges. This historical measure differs from revenue less cost alone. Operating profit was CNY 125.91237186 million. CNY 2.81313059 million of investment income, CNY 4.94322411 million of subsidy income and net non-operating expenses brought profit before tax to CNY 133.09131993 million. After income tax of CNY 13.02271810 million and minority shareholders' earnings of CNY 48.81338216 million, net profit belonging to the listed shareholders was CNY 71.25521967 million. These are the figures as presented in this annual report; later-year restated comparisons have separate source versions. Subsidiaries' own net profits and the parent's investment income are different reporting layers and must not be added again to consolidated earnings.

Reported business revenue / 2003 / consolidated main business revenue

RMB 852,231,000.95

Reported business cost / 2003 / consolidated main business cost

RMB 578,883,678.34

Reported consolidated operating profit / 2003 / consolidated operating profit

RMB 125,912,371.86

Reported profit before tax / 2003 / consolidated profit before tax

RMB 133,091,319.93

Profit attributable to subsidiary minority / 2003 / consolidated minority profit

RMB 48,813,382.16

Reported consolidated owner profit / 2003 / consolidated historical owner profit

RMB 71,255,219.67

Consolidated investment income or loss / 2003 / consolidated investment income

RMB 2,813,130.59

Consolidated operating activities generated CNY 122.35969052 million of net cash in 2003. Cash paid for fixed, intangible and other long-lived assets was CNY 150.40885720 million, with a separate CNY 6.69949659 million paid for investments. These cash payments are not construction carrying balances, project budgets or output capacity. After investment recoveries and other stated flows, investing activities used CNY 142.90507611 million net, exceeding operating cash generation. Financing provided CNY 95.13497744 million net: gross borrowing receipts were CNY 630.88 million, debt repayments CNY 517.6645 million and capital contributions CNY 40.33755139 million. The CNY 25.34370081 million payment combines dividends, profits and interest; it is not all a listed-company cash dividend. Including a negative CNY 0.33697989 million currency effect, cash and cash equivalents increased by CNY 74.25261196 million. Year-end short-term borrowings were CNY 486.02 million and long-term borrowings CNY 204.35623268 million, with CNY 63.26733039 million separately shown as current long-term liabilities. Gross loan receipts, closing debt, financing cash and guarantee obligations measure different things. These consolidated totals do not identify cash spent on a particular furnace or establish unrestricted liquidity.

Reported operating cash flow / 2003 / consolidated operating cash

RMB 122,359,690.52

Reported cash capital expenditure / 2003 / consolidated long lived asset acquisition cash

RMB 150,408,857.2

Reported cash investment payments / 2003 / consolidated investment payment cash

RMB 6,699,496.59

Reported investing cash flow / 2003 / consolidated investing net cash

RMB -142,905,076.11

Reported financing cash flow / 2003 / consolidated financing net cash

RMB 95,134,977.44

Reported cash borrowing receipts / 2003 / consolidated new borrowing cash

RMB 630,880,000

Reported cash debt repayments / 2003 / consolidated debt repayment cash

RMB 517,664,500

Reported cash fx effect / 2003 / consolidated exchange effect

RMB -336,979.89

Reported cash change / 2003 / consolidated cash change

RMB 74,252,611.96

Reported short-term borrowings / 2003 / consolidated short term borrowings

RMB 486,020,000

Reported long term borrowings / 2003 / consolidated long term borrowings

RMB 204,356,232.68

The parent's operating activities used CNY 46.56971247 million of net cash. Cash received as investment income was CNY 20.62274183 million, a different measure from CNY 67.41223277 million of recognised investment income. Investment recoveries of CNY 3.847902 million and CNY 20 million of other investing receipts, less CNY 3.69949659 million of investment payments and the other listed payments, produced CNY 40.35478861 million of net investing inflow. Borrowing receipts of CNY 90 million, debt repayments of CNY 36 million and CNY 13.25635495 million of combined dividend, profit-distribution and interest payments produced CNY 40.74364505 million of financing inflow. Together the categories increased parent cash and cash equivalents by CNY 34.52872119 million. The large other-operating receipts and payments cannot all be described as manufacturing sales and purchases. These parent flows are retained separately from the consolidated cash investment and borrowing totals.

Reported operating cash flow / 2003 / parent only operating cash

RMB -46,569,712.47

Reported investing cash flow / 2003 / parent only investing cash

RMB 40,354,788.61

Reported financing cash flow / 2003 / parent only financing cash

RMB 40,743,645.05

Reported cash investment payments / 2003 / parent only investment payment cash

RMB 3,699,496.59

Reported cash borrowing receipts / 2003 / parent only borrowing cash

RMB 90,000,000

Reported cash debt repayments / 2003 / parent only debt repayment cash

RMB 36,000,000

Gross trade receivables closed at CNY 298.96364460 million, with CNY 19.06780123 million of allowance, leaving CNY 279.89584337 million net. The prior comparison gives CNY 286.94195094 million gross and CNY 14.99895992 million allowance, or CNY 271.94299102 million net. Current balances include CNY 25.56748675 million aged two to three years and CNY 25.23716626 million aged more than three years. Age bands are not the same as contractual days overdue. The five largest closing accounts totalled CNY 112.49321219 million, or 37.63% of gross receivables, including the related US balance discussed separately. Bank-acceptance bills rose to CNY 23.53044114 million from CNY 4.281885 million. Management attributes this increase to Jushi's greater sales and a change in settlement methods. A bill receivable is not already received cash; these amounts are separate from trade-receivable and related-party totals.

Reported receivables gross / 2003 / group trade receivables

RMB 298,963,644.6

Reported receivables allowance / 2003 / group trade receivable allowance

RMB 19,067,801.23

Reported receivables gross / 2002 / comparative group trade receivables

RMB 286,941,950.94

Reported receivables allowance / 2002 / comparative group trade receivable allowance

RMB 14,998,959.92

Bank acceptance receivables / 2003 / group bank acceptance bills

RMB 23,530,441.14

Bank acceptance receivables / 2002 / comparative group bank acceptance bills

RMB 4,281,885

Gross inventories were CNY 183.50552298 million against CNY 179.17063799 million in the comparison. Finished goods remained the largest current component at CNY 134.80981469 million; raw materials were CNY 44.11393968 million. The note says the CNY 0.82211472 million opening finished-goods allowance was removed after the relevant stock was scrapped, rather than establishing a cash recovery. Supplier prepayments fell to CNY 34.62509085 million from CNY 45.13054899 million, which the report attributes to changed settlement methods. Major advances included CNY 10 million for land, CNY 5 million of engineering payments, CNY 1.60 million for equipment, CNY 1.56633 million for fuel and CNY 1.38592188 million of customs deposits. They total CNY 19.55225188 million, or 56.47% of prepayments. Land, equipment, fuel and deposits serve different purposes; the filing does not allocate all advances to a named production line or establish that a lower closing balance was a refund.

Reported gross inventory / 2003 / group inventories

RMB 183,505,522.98

Reported gross inventory / 2002 / comparative group inventories

RMB 179,170,637.99

Reported prepayments gross / 2003 / group supplier prepayments

RMB 34,625,090.85

Reported prepayments gross / 2002 / comparative group supplier prepayments

RMB 45,130,548.99

The monetary-funds note reports a closing total of CNY 172.62096662 million, compared with CNY 98.36835466 million. Its reported converted-CNY subtotals are CNY 0.46295325 million of cash, CNY 147.77024962 million of bank deposits and CNY 24.38776375 million of other monetary funds, which add to the printed total. The original-currency and converted-CNY entries for RMB cash and RMB bank deposits do not agree even though the printed exchange rate is one; the component table therefore remains unreconciled. The note identifies CNY 20.16472968 million of Jushi letter-of-credit guarantee deposits within other monetary funds, with the rest including securities-account balances. The reported aggregate is not described as wholly unrestricted operating cash, and the filing does not establish an independently reconciled freely available cash figure.

Reported monetary funds / 2003 / group reported monetary funds

RMB 172,620,966.62

Reported monetary funds / 2002 / comparative group reported monetary funds

RMB 98,368,354.66

The parent's reported income-tax rate was 15%. Subsidiaries had separate historical tax treatment: Jiujiang was in a tax-exempt year under its three-year exemption followed by two half-rate years from 2001. Jushi Group was in its first half-rate year in 2003 after a two-year exemption, with the report giving an actual 13.2% burden; Jiaxing composites was in the last year of its half-rate benefit, also quoted at 13.2%. These are historical disclosed arrangements, not a current tax-law guide or a single group statutory rate. Subsidy income totalled CNY 4.94322411 million. This included CNY 3 million of support linked to Jushi technical renovation, CNY 0.91586511 million of Jun'an Cement VAT relief on specified blocks using stone powder and fly ash, CNY 0.43 million of technology awards and CNY 0.597359 million of other support. The amounts are recognised support, not ordinary product sales or proof of recurring future awards. Consolidated tax expense was CNY 13.02271810 million; the tax mix and support are relevant to interpreting earnings.

Customer advances closed at CNY 22.27457257 million compared with CNY 40.82101832 million. The report says Jushi took payment before delivery from some customers and attributes the reduction to more timely shipments. Advances aged over one year totalled CNY 10.50176907 million; the note does not by itself establish cancelled orders, overdue refunds or a new backlog measure. Other payables included CNY 23.06996351 million of technical-development amounts accrued by Jushi at 3% of its sales under the cited provincial arrangement. The filing explicitly calls the balance accrued but not yet used for technical renovation. It is not described as cash already spent on R&D, a completed technology project or new investment available without conditions. Routine staff-fund and expense components are retained in source evidence without generating separate reader paragraphs.

Huazheng's audit report dated 2 April 2004 gives an unmodified opinion on the FY2003 consolidated and parent-company balance sheets, profit and profit-distribution statements and cash-flow statements under the Chinese Enterprise Accounting Standards and Enterprise Accounting System then applicable. These historical statements are not an IFRS restatement, and automatic comparability with later accounting frameworks is not assumed. The parent and consolidated scopes remain separate. An audit opinion on the financial statements is also separate from independent editorial review of this site's English explanations.

The filing changed Jushi Group's fixed-asset residual-value estimate from 5% to 10% and reports an increase of CNY 1.99 million in its current-period profit. This is an accounting-estimate effect at Jushi, not additional cash or automatically the same increase in listed-shareholder profit. Historical corrections also affect the opening comparison. The 2002 timing adjustment increased Jushi's prior-year revenue by CNY 20.97964297 million and cost by CNY 15.24195850 million, increasing its prior-year retained profit by CNY 5.73768447 million and the listed company's opening retained profit by CNY 3.84424859 million at the stated historical 67% interest. The two descriptions print different related receivable adjustments: CNY 24.54618227 million in the management discussion and CNY 24.54600227 million in the financial note. That CNY 180 discrepancy remains isolated; neither number is used as a silently reconciled trade-credit correction. Other disclosed opening-retained-profit corrections include the CNY 5.69169460 million impairment of the Yantai Bohai investment, prior tax, subsidiary-result and bonus adjustments. The change in treatment of proposed cash dividends reclassified CNY 11.13 million from the 2002 payable to proposed dividends within equity; it was not a cash payment. Corrections to historical equity-investment differences are also reported to increase current listed-company net profit by CNY 0.31581953 million. The 2002 comparison in this filing is adjusted under this filing's basis; figures later restated in another annual report remain distinct versions.