China Jushi FY2009: Debt and related-party balances

The consolidated financing table reports borrowing receipts of CNY 7,533,387,092.68 and debt repayments of CNY 4,915,798,926.12. These are gross annual cash movements, not the closing borrowing balance. Cash received from investors was CNY 28,051,735.00, all identified as minority-shareholder investment into subsidiaries; it is not evidence of new shares issued by the listed parent. Payments of CNY 553,451,458.43 combine dividends, profit distributions and interest, so the whole figure cannot be presented as dividends or as interest alone. A further CNY 796,600.00 was identified as financial-adviser fees. The cash-flow row for bond-issuance proceeds is a dash, while a separate debt note describes a short-term financing-note issue. The report provides no classification bridge that would support assigning those note proceeds to a particular cash-flow row.

Reported consolidated borrowing cash receipts / 2009 / consolidated annual

RMB 7,533,387,092.68

Reported consolidated debt repayment cash / 2009 / consolidated annual

RMB 4,915,798,926.12

Minority investment cash / 2009 / subsidiary minority consolidated

RMB 28,051,735

Distribution interest cash / 2009 / consolidated combined distribution interest

RMB 553,451,458.43

The restricted-assets note reports CNY 2,302,993,862.59 of assets used as security at year-end, comprising buildings of CNY 121,476,588.56, land-use rights of CNY 41,379,507.09 and machinery of CNY 2,140,137,766.94. Together with pledged monetary funds of CNY 327,543,940.87, its total restricted carrying amount was CNY 2,630,537,803.46. These are accounting carrying values and security arrangements, rather than additional borrowing proceeds or a market valuation of the factories. The disclosure helps explain financing constraints on the operating asset base; it does not establish that the assets were unavailable for production or that lenders had enforced their security.

Secured asset carrying value / 2009 / assets used as security

RMB 2,302,993,862.59

Restricted asset carrying value / 2009 / restricted assets note total

RMB 2,630,537,803.46

Short-term borrowings closed at CNY 3,778,685,088.65, comprising credit loans of CNY 1,639,141,147.78, guaranteed loans of CNY 1,797,000,000.00, mortgage-backed loans of CNY 15,000,000.00 and pledged loans of CNY 327,543,940.87. Separately, CNY 1,253,809,902.47 of long-term loans was due within one year, while long-term borrowings outside that current category were CNY 4,315,150,188.32. Jushi Group issued a one-year short-term financing note with face value CNY 500,000,000.00 on 1 May 2009, maturing on 1 May 2010. Its closing liability of CNY 509,294,444.47 includes accrued interest of CNY 9,294,444.47; adding the face value again would double count the note. Current long-term-loan maturities and this note together formed CNY 1,763,104,346.94 of current non-current liabilities. These maturity categories explain refinancing needs, without implying that a disclosed loan had defaulted or that refinancing was assured.

Reported short-term borrowings / 2009 / consolidated short term loans

RMB 3,778,685,088.65

Short term credit loans / 2009 / consolidated short term loans

RMB 1,639,141,147.78

Short term guaranteed loans / 2009 / consolidated short term loans

RMB 1,797,000,000

Short term mortgaged loans / 2009 / consolidated short term loans

RMB 15,000,000

Short term pledged loans / 2009 / consolidated short term loans

RMB 327,543,940.87

Reported current long term borrowings / 2009 / consolidated current maturities

RMB 1,253,809,902.47

Reported long term borrowings / 2009 / consolidated noncurrent loans

RMB 4,315,150,188.32

Financing note face value / 2009 / jushi one year note

RMB 500,000,000

Financing note accrued interest / 2009 / jushi one year note

RMB 9,294,444.47

Financing note closing liability / 2009 / jushi one year note

RMB 509,294,444.47

Reported current noncurrent liabilities / 2009 / consolidated current maturities

RMB 1,763,104,346.94

Other payables included CNY 351,764,794.10 owed to Sichuan Chengdu Zhenshi Investment for the acquisition of the minority interest in Jushi Chengdu. This is a closing acquisition-related payable, distinct from the purchase agreement, the resulting ownership stake and cash actually paid during FY2009. It therefore describes a payment obligation following the business integration, rather than an additional cash outflow to insert into the annual cash-flow totals. The note does not provide a payment timetable or a bridge allocating the amount across cash-flow rows.

Interest payable on short-term and long-term loans closed at CNY 12,834,009.32, divided among Jushi Group, Jushi Jiujiang and Jushi Chengdu. This closing accrual is separate from annual finance expense, cash interest paid and the financing-note interest included in another debt category. The employee-benefit payable note also identifies CNY 68,208,636.44 of unused welfare and reward funds accumulated by Jushi Group from historical after-tax profits. That explanation matters when interpreting the payable: the whole balance is not described as overdue wages or a current-year training budget. The table does not establish a withdrawal timetable for those funds.

Related procurement included CNY 190,955,929.60 of raw materials from Tongxiang Leishi Micropowder and CNY 15,552,833.40 from Tongxiang Juzhen Mining. The report states shares of 18.08% and 1.47% of the relevant transaction category. Tongxiang Jinshi Precious Metal Equipment supplied platinum-rhodium alloy and bushing processing for CNY 95,648,169.88, reported as 28.71% of its corresponding category and classified in fixed assets in the detailed transaction note. That accounting treatment distinguishes production-equipment investment from raw materials consumed in the period. The historical related-party network therefore affected both operating inputs and productive assets. The company describes prices as market-based; that is its stated pricing policy, not a separate verification of every contract. Percentages for raw materials, equipment and sales have different denominators and cannot be combined into one procurement-concentration figure.

Related raw material purchases / 2009 / leishi

RMB 190,955,929.6

Related raw material purchases / 2009 / juzhen

RMB 15,552,833.4

Related equipment purchases / 2009 / jinshi

RMB 95,648,169.88

Related trade receivables totaled CNY 163,152,944.90 at closing, including CNY 69,267,419.19 due from Pandeng and CNY 68,930,802.25 from GIBSON ENTERPRISES INC. Other related receivables were a separate CNY 28,503,181.85. They included an entrusted-loan balance of CNY 23,960,292.67 due from Luoyang Xinjingrun Engineering Glass. Beixin Technology had arranged the loan through Shanghai Pudong Development Bank with an original CNY 24,000,000.00 principal. The contract expired on September 29, 2009; the note states that it was not renewed formally and the parties continued performance by mutual tacit agreement. It reports an interest rate of 5.31% from February 2009, compared with the original 7.56%, and a separate annual funding-use fee of CNY 1,218,294.56. The principal, closing receivable and fee are distinct measures. Continued performance does not establish repayment, a new written maturity date or a proven default. Related purchase payables, sales advances and the Chengdu acquisition payable remain separate liabilities.

Reported related trade receivables / 2009 / consolidated

RMB 163,152,944.9

Reported related trade receivables / 2009 / pandeng

RMB 69,267,419.19

Reported related trade receivables / 2009 / gibson

RMB 68,930,802.25

Reported related other receivables / 2009 / consolidated

RMB 28,503,181.85

Entrusted loan receivable / 2009 / luoyang xinjingrun

RMB 23,960,292.67

Entrusted loan fee / 2009 / luoyang xinjingrun

RMB 1,218,294.56

Original entrusted loan principal / 2008 / beixin original 2008 contract

RMB 24,000,000

The report presents closing guarantee balances of CNY 1,357,868,200.17 in category A, headed guarantees excluding controlled subsidiaries, and CNY 1,190,046,000.00 in category B for controlled subsidiaries. Together they totaled CNY 2,547,914,200.17. The A table nevertheless includes Jushi Jiujiang and Jushi Chengdu as lower-tier controlled companies, alongside the Pandeng joint venture; its classification is preserved rather than converted into a claim that every guarantee was outside the consolidated business. The printed guarantee-to-net-assets ratio of 209.19% agrees with calculation using equity attributable to owners of the parent, CNY 1,217,984,305.63. Total consolidated equity including minorities was a different CNY 2,592,911,550.86. The report also prints CNY 581,053,847.18 as guarantees exceeding 50% of net assets, but that amount cannot be reconciled using either closing equity measure. Its basis remains unresolved. Guarantees are contingent support obligations; they are not additional drawn debt to add to group borrowings or evidence that every guarantee had been called.

Outgoing guarantee balance / 2009 / issuer category a

RMB 1,357,868,200.17

Outgoing guarantee balance / 2009 / issuer category b

RMB 1,190,046,000

Outgoing guarantee balance / 2009 / issuer total a b

RMB 2,547,914,200.17

Equity / 2009 / consolidated owner

RMB 1,217,984,305.63

Equity / 2009 / consolidated total

RMB 2,592,911,550.86

Guarantee above half equity / 2009 / issuer e unreconciled basis

RMB 581,053,847.18

Zhenshi provided guarantees for Jushi Group loans including USD 38,400,000.00, shown as CNY 262,202,880.00, and USD 16,500,000.00, shown as CNY 112,665,300.00, as well as several yuan loans. Beixin Building Materials Group also supported yuan and dollar borrowing. These incoming guarantees are separate from guarantees the listed group provided to other entities and from cash actually received. A maximum guarantee agreement, a supported loan balance and a loan maturity describe different contractual measures; overlapping security is not added as another loan. The credit note separately lists a CNY 500,000,000.00 facility and three CNY 150,000,000.00 facilities. Facilities describe permitted borrowing limits, not proven undrawn cash at year-end. One facility prints an April 9, 2009 start and April 8, 2009 expiry, which is inconsistent as written. No replacement expiry is assumed, and the disclosure does not justify adding all listed limits to available liquidity.

Credit facility limit / 2009 / beijing rural commercial agreement

RMB 500,000,000

Credit facility limit / 2009 / minsheng agreement

RMB 150,000,000