China Jushi FY2009: Operating risks and business commitments

The report presents other comprehensive income of negative CNY 223,345,582.75, combining a foreign-currency translation gain of CNY 7,642,304.93 and a minority-equity acquisition premium of negative CNY 230,987,887.68. It allocates negative CNY 115,872,414.92 to owners of the parent and negative CNY 107,473,167.83 to minority interests. These items are presented outside the ordinary net-profit subtotal in this historical report. They should not be inserted as another operating expense or presumed cash payment. Combined with the consolidated net loss, they produced total comprehensive loss of CNY 489,645,189.34. The acquisition premium is distinct from the acquired stake, the purchase payable and the full investment consideration; the note does not provide a bridge equating those figures.

Reported other comprehensive income / 2009 / consolidated oci

RMB -223,345,582.75

Translation oci / 2009 / consolidated oci

RMB 7,642,304.93

Minority acquisition premium / 2009 / consolidated oci

RMB -230,987,887.68

Owner oci / 2009 / consolidated oci

RMB -115,872,414.92

Minority owners other comprehensive income / 2009 / consolidated oci

RMB -107,473,167.83

Reported consolidated total comprehensive income / 2009 / consolidated comprehensive

RMB -489,645,189.34

The FY2009 report names the listed issuer as CHINA FIBERGLASS CO., LTD, with Shanghai A-share code 600176. It identifies China National Building Material Co., Ltd. as the controlling shareholder, holding 154,502,208 shares, or 36.15%, with the same reported voting percentage. Zhenshi Holding Group held 85,631,040 shares, or 20.04%. The named ultimate controller was China National Building Material Group Corporation, and the report states that control did not change during FY2009. Its ownership diagram shows the ultimate controller holding 65% of Beixin Building Materials Group, which held 30.46% of the controlling shareholder; a separate direct arrow shows 13.67%. These are distinct historical ownership links. They are not percentages of the listed issuer to be added together or evidence of present-day control. The report says that relationships or concerted action among its top shareholders were unknown.

Total shares remained 427,392,000 throughout FY2009. The shareholder chapter reports that 154,654,848 previously restricted shares became tradable on August 17, 2009, comprising 111,763,008 held by China National Building Material and 42,891,840 by Zhenshi. It lists zero restricted shares at year-end. Separately, both shareholders had voluntarily promised not to reduce their holdings in the secondary market before August 17, 2010, covering their full respective stakes of 154,502,208 and 85,631,040 shares. Formal trading classification and the voluntary no-sale commitment therefore differ. Zhenshi also had 50,022,240 shares pledged. A pledge is not a disclosed sale or change of voting control. The financial-statement share-capital note still presents 154,654,848 restricted and 272,737,152 unrestricted shares at closing, unlike the shareholder chapter. The report does not reconcile those classifications; both retain the same total share count.

The listed parent reported a FY2009 net loss of CNY 7,176,393.97 and accumulated undistributed losses of CNY 131,645,174.82 at year-end. Its capital reserve was CNY 53,696,990.29. These parent-company amounts differ from consolidated earnings and reserves, which include subsidiaries and minority interests. The board proposed no FY2009 profit distribution and no conversion of capital reserves into share capital; the report explicitly says the proposal required the annual shareholders’ meeting. It is a proposal at the filing date, not evidence of a subsequent shareholder vote. Separately, consolidated capital reserves fell by CNY 117,803,822.71 to CNY 70,949,173.93. The note attributes that reduction to the Chengdu minority-stake acquisition consideration exceeding the corresponding book net assets. This reserve movement is distinct from ordinary operating expense and the separately reported other-comprehensive-income acquisition premium.

Parent-only net profit / 2009 / listed parent

RMB -7,176,393.97

Reported parent retained earnings / 2009 / listed parent

RMB -131,645,174.82

Reported capital reserve / 2009 / listed parent

RMB 53,696,990.29

Reported capital reserve / 2009 / consolidated

RMB 70,949,173.93

Capital reserve decrease / 2009 / consolidated

RMB 117,803,822.71

The financial auditor concluded that the FY2009 consolidated and parent financial statements fairly presented, in all material respects, financial position, results and cash flows under the Chinese Accounting Standards for Business Enterprises issued in 2006. The financial audit expressly did not aim to give an opinion on internal-control effectiveness. A separate assurance report concluded that financial-reporting-related controls were effective in all material respects at December 31, 2009; it also described inherent limitations and the risk of projecting effectiveness into future periods. Both reports are dated March 29, 2010. The board’s own full-year control self-assessment is a separate management statement. The issuer said it changed auditors to align with its controlling group’s common-auditor requirement, without reporting an audit dispute as the reason. These opinions do not provide assurance on every production risk or on this website’s research. The separate control report states a restricted annual-report-disclosure purpose, which is recorded for source-use review.

A proposed share-swap absorption merger of Jushi Group did not proceed under the earlier shareholder authorization. In issuer announcement 2009-027, signed on 6 November 2009 and disclosed on 7 November, China Fiberglass explained that the proposal had been approved by its board on 7 December 2007 and by an extraordinary shareholder meeting on 27 December 2007. The shareholder resolution was valid for twelve months, and the company filed its application with the China Securities Regulatory Commission (CSRC) on 28 December 2007. It did not obtain all required approvals within the resolution's validity period, so the merger preconditions were not completed and the resolution automatically ceased to be effective. The company had disclosed that expiry on 30 December 2008 and subsequently submitted a request to withdraw the application. By the November 2009 announcement, it had received CSRC notice [2009]184 terminating review of the application. The announcement did not give an exact receipt date. This describes expiry, withdrawal and the end of regulatory review; it does not report completion of the proposed merger. It also does not identify every missing approval or quantify the cost of abandoning the application.