China Jushi FY2005: Projects and construction progress

The construction note explicitly identifies Project 210 as Jushi Group's combined 80,000-tonne and 20,000-tonne production lines. Its carrying balance increased from CNY 0.110 million to CNY 370.235 million during 2005, with CNY 370.125 million of additions and no transfer to fixed assets shown for this project. Total consolidated construction in progress rose from CNY 9.088 million to CNY 379.035 million: CNY 378.080 million of additions, less CNY 7.834 million transferred to fixed assets and CNY 0.299 million transferred out otherwise. These accounting movements are not identical to cash paid for capital expenditure. The fixed-asset note separately reports CNY 1,901.623 million of original cost and CNY 1,582.418 million of net carrying value after accumulated depreciation. The business discussion's fixed-asset figure uses original cost and should not be read as the net balance-sheet amount. The report records commissioning of the 80,000-tonne line on 18 March 2006, after the reporting date; it does not establish that both lines were already operating on 31 December 2005.

Reported construction opening balance / 2004 / consolidated construction opening comparative 2004

RMB 9,088,118.1

Reported construction carrying-value additions / 2005 / consolidated construction additions

RMB 378,079,669.03

Reported construction transfer to fixed assets / 2005 / consolidated construction transfers

RMB 7,834,304.21

Reported construction closing balance / 2005 / consolidated construction closing

RMB 379,034,946.77

Reported construction opening balance / 2004 / jushi project210 construction opening comparative 2004

RMB 110,000

Reported construction carrying-value additions / 2005 / jushi project210 construction additions

RMB 370,124,714.21

Reported construction closing balance / 2005 / jushi project210 construction closing

RMB 370,234,714.21

Beyond the combined 80,000-tonne and 20,000-tonne project, Jushi Group and Germany's P-D group planned an electronic-materials base with 10,000 tonnes a year of electronic yarn and 50 million square metres a year of electronic cloth. The report expected commissioning in the fourth quarter of 2006 and describes the project as supporting higher-grade glass-fiber cloth and printed-circuit-board products. This is an intended application and timetable, not evidence of realized sales or customer orders. Two further projects were a 40,000-tonne medium-alkali glass-fiber tank-furnace line at Chengdu and a 30,000-tonne alkali-free line at Jiujiang, both expected to commission in the third quarter of 2006. Jushi Group held 57% of the Chengdu subsidiary and 99% of Jiujiang; the listed company's 59.90% interest in Jushi is a different ownership level. Chengdu shareholders planned a proportional CNY 30 million capital increase, including CNY 17.1 million from Jushi. This capital contribution is not stated as the line's full construction budget. The projects retain their distinct products, capacities, ownership levels and planned dates rather than being treated as a single completed expansion.

In its FY2005 annual report, management kept glass fiber and related products at the center of business and investment priorities for the next three to five years, covering research and development, production and sales. It planned to complete a 300,000-tonne Jushi glass-fiber industrial base in Tongxiang, Zhejiang, and to reach approximately 500,000 tonnes of total company capacity around 2010. The strategy also called for extending the glass-fiber product chain and acquiring, introducing and developing product technology. These are management's forward-looking capacity and business-development aims at the time of this filing. The 300,000-tonne base target is a location-level ambition; the approximately 500,000-tonne figure is company-wide. Neither is a reported 2005 output, a confirmed order volume or evidence that the later target was achieved. Individual disclosed construction lines and their subsequent commissioning remain separately dated.