China Jushi FY2009: Cash generation and working capital

The consolidated group reported FY2009 operating cash flow of negative CNY 126,622,041.82, compared with negative CNY 456,898,932.05 in FY2008. Cash inflows from operations of CNY 2,690,804,098.36 were below operating payments of CNY 2,817,426,140.18. Cash collected from sales and services was CNY 2,345,433,265.16, compared with CNY 3,300,158,103.66 in the prior year. The cash-flow table records actual cash receipts and payments; it does not measure revenue, sales volumes or customer orders. The parent company separately reported positive operating cash flow of CNY 17,780,971.27. Its cash flows are part of a different reporting perimeter and cannot be added to the consolidated group amount. The smaller group cash deficit therefore represents an improvement on the prior year, while operations still consumed cash.

Reported operating cash flow / 2009 / consolidated annual

RMB -126,622,041.82

Operating cash inflows / 2009 / consolidated annual

RMB 2,690,804,098.36

Operating cash outflows / 2009 / consolidated annual

RMB 2,817,426,140.18

Reported sales cash receipts / 2009 / consolidated annual

RMB 2,345,433,265.16

Reported operating cash flow / 2009 / parent annual

RMB 17,780,971.27

Cash paid to acquire or construct fixed assets, intangible assets and other long-term assets was CNY 1,321,692,805.15 in FY2009, compared with CNY 2,841,827,219.79 in FY2008. These payments span the consolidated group and are not an allocation to a particular furnace or construction project. Investment payments were a further CNY 150,756,340.33, and net investing cash flow was negative CNY 1,346,493,028.92. Net financing cash inflow of CNY 2,091,391,843.13 exceeded the combined operating and investing cash outflows. After an exchange-rate effect of negative CNY 445,922.09, cash increased by CNY 617,830,850.30 to CNY 1,896,421,270.78. This cash increase was supported by financing rather than positive operating cash generation. Parent-company investing cash flow of CNY 112,756,856.76 and financing cash flow of negative CNY 198,239,322.34 are separate from these consolidated measures.

Reported capital expenditure cash / 2009 / consolidated long term assets

RMB 1,321,692,805.15

Reported investing cash flow / 2009 / consolidated annual

RMB -1,346,493,028.92

Reported financing cash flow / 2009 / consolidated annual

RMB 2,091,391,843.13

Cash net change / 2009 / consolidated annual

RMB 617,830,850.3

Year-end monetary funds totaled CNY 1,896,421,270.78: cash on hand of CNY 597,692.60, bank deposits of CNY 1,541,437,834.68 and other monetary funds of CNY 354,385,743.50. The other-funds note identifies letter-of-credit margins of CNY 215,947,179.36, pledged-loan deposits of CNY 114,500,000.00, bank-acceptance-bill margins of CNY 23,684,643.97 and credit-card deposits of CNY 253,920.17. However, the cash-and-cash-equivalents supplement labels the full other-funds balance as available for payment at any time and shows a dash in the restricted-cash row. A separate restricted-assets note reports pledged monetary funds of CNY 327,543,940.87. The disclosures do not explain how that pledge balance overlaps with the deposit categories. Both presentations are retained: the total is not labeled wholly unrestricted, and no unrestricted-cash or net-debt amount is calculated by assuming an overlap.

Reported monetary-funds balance / 2009 / consolidated monetary funds

RMB 1,896,421,270.78

Bank deposits / 2009 / consolidated monetary funds

RMB 1,541,437,834.68

Reported other monetary funds / 2009 / consolidated monetary funds

RMB 354,385,743.5

Letter credit margin / 2009 / consolidated other funds

RMB 215,947,179.36

Pledged loan deposit / 2009 / consolidated other funds

RMB 114,500,000

Acceptance bill margin / 2009 / consolidated other funds

RMB 23,684,643.97

Pledged monetary funds / 2009 / restricted assets note

RMB 327,543,940.87

The indirect reconciliation starts with a consolidated net loss of CNY 266,299,606.59 and reaches operating cash flow of negative CNY 126,622,041.82 after noncash adjustments and changes in operating balances. It adds depreciation of CNY 644,557,951.24 and a finance-expense adjustment of CNY 516,661,597.64, while increases in operating receivables and decreases in operating payables reduce cash by CNY 398,935,777.60 and CNY 581,516,598.40 respectively. These reconciliation adjustments are not additional cash payments, and the finance-expense adjustment is not a cash-interest figure. The depreciation adjustment differs from the fixed-asset note annual depreciation of CNY 354,117,043.18 by CNY 290,440,908.06. The report supplies no explicit numerical bridge between the two roles, so the difference is preserved without assigning it to an assumed asset category or maintenance cost.

Cashflow depreciation adjustment / 2009 / consolidated indirect cash

RMB 644,557,951.24

Cashflow finance expense adjustment / 2009 / consolidated indirect cash

RMB 516,661,597.64

Cashflow operating receivable change / 2009 / consolidated indirect cash

RMB -398,935,777.6

Cashflow operating payable change / 2009 / consolidated indirect cash

RMB -581,516,598.4

The monetary-funds note explicitly states that CNY 354,131,823.33 was used for letter-of-credit, pledged-loan and bank-acceptance-bill guarantee deposits at the balance-sheet date. The company could use these funds after satisfying the relevant contract terms. That amount equals the three margin categories in the deposit table; the remaining CNY 253,920.17 of other monetary funds consists of credit-card deposits. This contractual condition is relevant when assessing funding available for operations and investment. It differs from the cash supplement, which labels the full other-funds balance as available for payment at any time. The report does not reconcile the availability descriptions or explain the overlap with the separate pledged-funds balance. The contractual restriction is therefore retained without calculating an assumed unrestricted-cash total.

Contract restricted cash / 2009 / contract conditioned guarantee deposits

RMB 354,131,823.33

Closing bills receivable totaled CNY 256,955,377.87, comprising bank-acceptance bills of CNY 253,857,692.09 and commercial-acceptance bills of CNY 3,097,685.78. The comparable opening total was CNY 78,532,877.90. These balances describe payment instruments held at year-end rather than cash already collected. The company also disclosed 1,304 endorsed bills that had not yet matured, totaling CNY 298,209,403.74. The listed examples matured in April and May 2010. Endorsement transfers a bill to another holder; the endorsed amount is a separate disclosure and is not added to the closing bills balance as another asset. The issuer names support the reported settlement relationships but do not establish new sales amounts, subsequent collections or undisclosed customer defaults.

Reported bills receivable / 2009 / consolidated closing

RMB 256,955,377.87

Bank acceptance receivables / 2009 / consolidated closing

RMB 253,857,692.09

Commercial acceptance receivables / 2009 / consolidated closing

RMB 3,097,685.78

Reported endorsed unmatured bills / 2009 / consolidated endorsed unmatured

RMB 298,209,403.74

Gross trade receivables closed at CNY 1,220,088,346.37, up from CNY 936,104,235.66. The closing bad-debt allowance was CNY 48,898,147.69, giving net receivables of CNY 1,171,190,198.68, consistent with the balance sheet. The opening allowance of CNY 32,832,235.28 similarly reconciles to opening net receivables of CNY 903,272,000.38. The ageing table places CNY 150,533,298.84 in the one-to-two-year category, compared with CNY 30,479,766.00 at opening. Ageing and provision balances describe collection exposure, without proving that every older balance was in default. The five largest debtors accounted for CNY 338,839,256.45, or a reported 27.77% of gross receivables; two were identified as related parties. These debtor balances are distinct from annual customer-sales concentration. The note prints a closing total allowance rate of 3.51%, whereas its amounts imply approximately 4.01%; the opening total prints 4.00% versus approximately 3.51% by calculation. Its opening smaller-balance category prints 5.63% versus approximately 5.93% from the corresponding amounts. The original amounts and printed rates remain separate rather than silently corrected.

Reported gross trade receivables / 2009 / consolidated closing

RMB 1,220,088,346.37

Reported trade-receivable allowance / 2009 / consolidated closing

RMB 48,898,147.69

Reported net trade receivables / 2009 / consolidated closing

RMB 1,171,190,198.68

Receivables one two years / 2009 / consolidated trade closing

RMB 150,533,298.84

Top five debtors / 2009 / consolidated trade closing

RMB 338,839,256.45

Receivables allowance percentage / 2009 / consolidated closing printed rate

3.51%

Prepayments closed at CNY 281,840,276.82, compared with CNY 454,121,475.92 at opening. The five largest recipients together accounted for CNY 37,991,823.75 and included construction, electrical-system, logistics-equipment, installation and container-engineering suppliers. The note describes their work as unfinished and not yet settled, including CNY 22,838,000.00 advanced to the Tongxiang office of a construction contractor. These advances help explain funds committed before work was completed or settled. They are not evidence of completed production capacity, customer orders or an allocation to a named furnace. The year-end balance and its change are also distinct from total supplier cash payments during FY2009.

Reported supplier prepayments / 2009 / consolidated closing

RMB 281,840,276.82

Top five prepayments / 2009 / consolidated closing

RMB 37,991,823.75

Supplier prepayment / 2009 / construction tongxiang office

RMB 22,838,000

Other receivables had a closing gross balance of CNY 91,750,554.89 and an allowance of CNY 20,647,299.87, yielding net assets of CNY 71,103,255.02 as shown in the balance sheet. This category is separate from trade receivables. The five largest debtors represented CNY 33,376,524.70, or a reported 36.38% of gross other receivables. A related glass-engineering company accounted for CNY 23,960,292.67 in the one-to-two-year category, and a related building-materials company for CNY 2,215,926.47. The reported relationships and ageing identify exposures within the historical business perimeter, but the table does not establish the purpose, repayment timetable or subsequent recovery of every balance. The allowance is an accounting estimate rather than proof that those specific named debts were wholly unrecoverable.

Reported gross other receivables / 2009 / consolidated closing

RMB 91,750,554.89

Reported other-receivable allowance / 2009 / consolidated closing

RMB 20,647,299.87

Reported other receivables net / 2009 / consolidated closing

RMB 71,103,255.02

Top five debtors / 2009 / consolidated other closing

RMB 33,376,524.7

Related other receivable / 2009 / luoyang glass engineering closing

RMB 23,960,292.67

Related other receivable / 2009 / shenzhen building materials closing

RMB 2,215,926.47

Closing inventory had gross cost of CNY 910,895,752.76 and a write-down allowance of CNY 111,506.25, giving net inventory of CNY 910,784,246.51. The opening net amount was CNY 916,903,486.89. Finished goods had closing gross cost of CNY 777,322,547.17, compared with CNY 742,072,622.65 at opening, while raw materials declined from CNY 168,787,160.92 to CNY 122,744,175.60. The mix therefore changed even though total inventory fell slightly. The same allowance amount appears against finished goods at opening and closing; the movement table shows dashes for additions, reversals and write-offs, which are not converted into separately reported numerical zeros. These are accounting balances, not tonnes of fiber, utilization rates or evidence that all finished goods had been sold or could be realized at cost.

Reported gross inventory / 2009 / consolidated closing

RMB 910,895,752.76

Reported inventory allowance / 2009 / consolidated closing

RMB 111,506.25

Reported net inventory / 2009 / consolidated closing

RMB 910,784,246.51

Reported finished goods gross / 2009 / consolidated closing

RMB 777,322,547.17

Reported raw material inventory / 2009 / consolidated closing

RMB 122,744,175.6

Trade payables declined from CNY 1,723,218,477.74 to CNY 383,491,749.77; CNY 81,364,197.51 of the closing balance was more than one year old and described as unsettled. Bank-acceptance bills payable were a separate CNY 25,338,848.24, disclosed as due in the next accounting period. Customer advances increased from CNY 150,346,308.01 to CNY 174,879,984.53, including CNY 7,468,831.98 outstanding for more than one year. Advance balances are not a disclosed order backlog or recognized sales. Other payables increased from CNY 87,478,429.87 to CNY 486,398,468.81 and included the separately identified Chengdu acquisition payable of CNY 351,764,794.10. The categories explain different operating and integration obligations; their balance changes cannot simply be treated as annual cash payments or attributed entirely to one transaction.

Reported trade payables / 2009 / consolidated closing

RMB 383,491,749.77

Trade payables over one year / 2009 / consolidated closing

RMB 81,364,197.51

Acceptance bills payable / 2009 / consolidated closing

RMB 25,338,848.24

Customer advances in contract liabilities / 2009 / consolidated closing

RMB 174,879,984.53

Customer advances over one year / 2009 / consolidated closing

RMB 7,468,831.98

Reported other payables / 2009 / consolidated closing

RMB 486,398,468.81

Net intangible assets totaled CNY 212,111,574.77, including land-use rights of CNY 183,882,784.37, trademark-use rights of CNY 21,272,808.98, intellectual property of CNY 3,198,873.60 and software of CNY 3,757,107.82. Annual amortization was CNY 7,675,795.11. These carrying amounts describe rights and systems within the historical operation; land-use rights are not a claim of freehold land ownership, and the balances are not market valuations or measures of product sales. Goodwill of CNY 16,678,380.56 arose from acquisitions of Jushi Group, Jushi Jiujiang, Junan Cement and Baoyu Industrial. The issuer states that the goodwill was allocated to relevant asset groups and that its impairment tests identified no impairment. This is the company’s reported accounting assessment, without a disclosed detailed valuation model or a guarantee of future profitability.

Reported consolidated intangible assets net carrying value / 2009 / consolidated intangibles

RMB 212,111,574.77

Reported consolidated land-use rights net carrying value / 2009 / consolidated intangibles

RMB 183,882,784.37

Trademark use rights net / 2009 / consolidated intangibles

RMB 21,272,808.98

Intellectual property net / 2009 / consolidated intangibles

RMB 3,198,873.6

Software net / 2009 / consolidated intangibles

RMB 3,757,107.82

Reported goodwill / 2009 / consolidated goodwill

RMB 16,678,380.56

Deferred-tax assets closed at CNY 55,811,185.96, comprising CNY 18,462,099.76 related to impairment allowances and CNY 37,349,086.20 related to deductible losses. These are recognised tax-asset amounts, not cash refunds received in FY2009. Separately, the note lists CNY 19,630,229.31 of deductible losses for which no deferred-tax asset was recognised: CNY 16,136,195.70 was scheduled to expire in 2013 and CNY 3,494,033.61 in 2014, as disclosed at the FY2009 reporting date. The unrecognised loss amounts are tax bases, not another tax asset to add to the recognised balance. The report does not provide a bridge turning these figures into a common pool or a forecast of cash savings. Their recognition and expiry distinctions matter when assessing how accounting tax benefits depend on future taxable results.

The group recognised positive investment income of CNY 27,234,888.24, comprising equity-method losses of CNY 12,985,444.80, a loss of CNY 767.14 on disposal of long-term investments, and CNY 40,221,100.18 described as income obtained while holding trading financial assets. Separately, fair-value changes in trading financial assets produced a gain of CNY 11,883,032.87, compared with a loss of CNY 92,746,942.87 in FY2008. The monetary-funds note states that all trading equity investments were sold during FY2009. These accounting categories are retained as disclosed; the report does not supply a complete bridge separating the investment-income line into realized disposal gains, dividends and cash receipts. The amounts do not measure fiber selling prices, manufacturing margin or recurring customer revenue.

Equity method result / 2009 / consolidated equity method

RMB -12,985,444.8

Consolidated investment income or loss / 2009 / consolidated investment income

RMB 27,234,888.24

Trading asset holding income / 2009 / consolidated investment income

RMB 40,221,100.18

Fair value income / 2009 / consolidated trading financial assets

RMB 11,883,032.87

Government subsidies recognised in nonoperating income totaled CNY 96,746,264.44. The largest categories were an industrial-development-zone investment reward of CNY 50,009,280.00, an industrial-park entry reward of CNY 13,480,000.00 and a combined natural-gas subsidy and local-tax refund of CNY 11,370,000.00. Other specific support included CNY 5,000,000.00 for a major industrialization project, CNY 2,000,000.00 for a glass-fiber laboratory and CNY 400,000.00 for water reuse. These items explain support linked to investment, energy costs and industrial development. The cash-flow note separately reports government-grant cash receipts of CNY 92,243,512.30, while the liability note carries CNY 31,489,730.27 of deferred income from domestic-equipment tax refunds. Income recognised, cash received and deferred income are different measures. The report does not fully reconcile them, so the difference is not labeled unpaid grants or assumed to recur in future years.

Reported government subsidy income / 2009 / consolidated nonoperating

RMB 96,746,264.44

Government subsidy cash received / 2009 / consolidated operating cash

RMB 92,243,512.3

Reported government subsidy income / 2009 / industrial zone investment reward

RMB 50,009,280

Reported government subsidy income / 2009 / industrial park entry reward

RMB 13,480,000

Reported government subsidy income / 2009 / gas subsidy local tax refund

RMB 11,370,000

Deferred equipment tax income / 2009 / consolidated equipment refund deferred income

RMB 31,489,730.27

The consolidated income statement reports an operating loss of CNY 399,182,841.99. Nonoperating income of CNY 104,432,274.16, including the government subsidies, and nonoperating costs of CNY 5,254,946.49 resulted in a loss before tax of CNY 300,005,514.32. The costs included asset-disposal losses of CNY 2,105,036.24 and penalties of CNY 1,540,514.35; the note does not specify the cause or regulator of every penalty. Current tax expense of CNY 6,735,806.26 was offset by a deferred-tax adjustment of negative CNY 40,441,713.99, producing a net tax benefit of CNY 33,705,907.73. The resulting consolidated net loss was CNY 266,299,606.59. The deferred-tax benefit improved the accounting result, without demonstrating a matching cash refund or recovery in manufacturing earnings. Consolidated, listed-owner and minority results remain separate.

Operating profit / 2009 / consolidated income statement

RMB -399,182,841.99

Reported profit before tax / 2009 / consolidated income statement

RMB -300,005,514.32

Nonoperating income / 2009 / consolidated income statement

RMB 104,432,274.16

Reported nonoperating expense / 2009 / consolidated income statement

RMB 5,254,946.49

Current income-tax expense / 2009 / consolidated tax expense

RMB 6,735,806.26

Signed deferred income-tax expense / 2009 / consolidated tax expense

RMB -40,441,713.99

Reported consolidated income-tax expense / 2009 / consolidated tax expense

RMB -33,705,907.73

Management attributed the increase in gross trade receivables partly to longer customer credit and payment periods during the economic downturn. That matters for cash conversion: reported sales and customer collections can fall in different periods. The abnormal-change table compares opening gross receivables of CNY 932,850,521.66 with closing CNY 1,220,088,346.37, while the detailed receivables note gives a different opening gross amount, CNY 936,104,235.66. The filing does not reconcile the two opening figures. Its explanation of credit extensions can be retained, but the tables should not be merged into one comparative series. No specific payment-day increase or default rate is established by this narrative.

Comparative trade receivables gross / 2008 / abnormal change opening table

RMB 932,850,521.66