China Jushi FY2009: Subsidiaries and invested companies

The listed issuer held 51% of Jushi Group, which manufactured and sold glass fiber and composite-material products. The management summary reports subsidiary assets of CNY 13,187,260,400 and a FY2009 net loss of CNY 236,531,900, converted from ten-thousand-yuan figures. These are subsidiary amounts, rather than the listed-company owner-profit measure or an additional layer to add to consolidated totals. The narrative gives registered capital of USD 256,208,100, while the subsidiary table displays USD 256,200,000. The different presentations are retained without assuming a capital change or a specific rounding explanation. The table also records actual contributed capital of USD 130,662,000, which is distinct from registered capital. Jushi owned its Jiujiang and Chengdu manufacturing subsidiaries outright at year-end, but the lower-tier 100% stakes do not mean that the listed issuer directly or economically owned 100% of those operations. Minority interests in Jushi remain relevant to the allocation of operating results.

Reported registered capital / 2009 / jushi management summary

256,208,100 USD

Reported subsidiary total assets / 2009 / jushi management summary

RMB 13,187,260,400

Reported subsidiary net profit / 2009 / jushi management summary

RMB -236,531,900

Reported ownership percentage / 2009 / jushi subsidiary

51%

Reported registered capital / 2009 / jushi consolidation table

256,200,000 USD

The listed issuer held 97.22% of Beixin Technology Development. Its management summary reports registered capital of CNY 90,000,000, assets of CNY 222,487,800 and a FY2009 net loss of CNY 24,445,800. The assets and loss are converted from the original ten-thousand-yuan presentation. The subsidiary table classifies Beixin as a trading enterprise and describes new-material research, technical consulting and industrial investment; the management narrative also includes production, sales and distribution. Those stated business scopes do not establish separately realized revenue from every activity. Lower-tier businesses include industrial trading, cement products, ceramics, home building materials and a home-furnishings market. These operations help explain the listed group’s historical business perimeter. Their subsidiary results are already reflected through consolidation and are not separate profits to add again to group totals.

Jushi Group signed an agreement to acquire the 43% interest in Jushi Chengdu held by Sichuan Chengdu Zhenshi Investment. The note uses 31 October 2009 as the transaction reference date and states that Jushi held 100% after the acquisition was completed. The reference date is retained without treating it as an independently disclosed legal completion date. The subsidiary table classifies Chengdu as a production enterprise whose business scope includes glass fiber, related products, composite materials, engineering plastics, fiber chemicals and specialized equipment, as well as relevant import and export activities. Registered capital is CNY 609,570,000. This organizational integration is separate from commissioning a new production line and does not itself establish an increase in capacity or sales. The listed issuer’s 51% stake in Jushi remains the higher-tier ownership boundary.

Jushi Jiujiang is classified as a production enterprise and wholly owned within Jushi, with registered capital of CNY 340,000,000. Its disclosed scope includes exports of its own products and technology, imports of production inputs and processing trade. Jiujiang Mining sits below Jiujiang and processes or sells calcium oxide, calcium carbonate and fluorite. The table records an 85% holding at that immediate parent layer and registered capital of CNY 1,000,000. This mineral-processing role connects the subsidiary structure to fiber-manufacturing inputs, but a business scope does not prove that all output was supplied internally or quantify material volumes and realized savings. The note includes the mining company among four newly registered entities entering consolidation during FY2009. Neither subsidiary registration nor a registered-capital amount establishes a new operating furnace or an exact factory address.

The subsidiary table classifies the South African Huaxia composite-material company as production, with glass-fiber and fiber-product manufacturing and sales in its stated scope. It records a 60% holding within Jushi and USD 4,000,000 of registered capital. A separately named South African Huaxia industrial company is classified as trading. Other overseas trading companies are registered in Hong Kong, Toronto, Seoul, Mumbai, Milan and Madrid, with scopes covering fiber products, equipment and raw-material trade. Canada is specifically identified as a subsidiary of the Hong Kong company; its 60% ownership entry belongs to that lower tier. The disclosed sales network therefore cannot be read as evidence of a factory in every sales market. Registration locations are not verified production-site addresses. Registered capital currencies also differ from functional currencies used to translate overseas accounts: the South African production company uses rand, while the industrial company uses dollars. Capital, ownership and currency columns retain their separate meanings.

The subsidiary table records 60% ownership and voting rights for the Italian company, the Hong Kong composite-material company and the South African Huaxia industrial company. The accompanying note nevertheless says their statements were consolidated on a 100% basis during the period because minority holders had not completed their actual contributions. This stated accounting treatment is retained without rewriting the ownership columns or asserting 100% direct ownership by the listed issuer. In the Beixin subgroup, Baoyu Industrial is recorded at 50% ownership and voting rights but is consolidated because Beixin held four of seven board seats, reported as 57.14%, and the note states that it exercised control. Shangmei Home Building Materials is recorded with 90% direct and 6% indirect ownership and 100% voting rights. The note explains that Beixin held 90% directly and its 60%-owned Qibai Ceramics subsidiary held the other 10%. These are distinct equity, governance and consolidation measures; the FY2010 voting-rights disclosures are not inserted into this FY2009 account.

The report says the consolidated subsidiary count increased by four and that all four additions were newly registered companies. The new-entity table lists the Hong Kong Huaxia composite-material company, South African Huaxia industrial company, Spanish company and Jiujiang Mining. Their closing net assets are CNY 4,096,920, CNY 512,115, CNY 4,893,705.64 and CNY 1,000,000 respectively. It reports a current-year net loss of CNY 12,238.26 for Spain and CNY 7,869.63 for Jiujiang Mining; the profit column for the other two entries contains a dash, which is not converted into a separately verified zero-profit figure. Closing net assets and current-year profit have different periods and meanings. The Hong Kong composite-material name appears with and without Huaxia in nearby tables. That source variation remains visible in organizational context without creating or merging an entity solely from a similar name. These additions are not described as four acquired production plants.

Reported subsidiary net assets / 2009 / hongkong huaxia newly included

RMB 4,096,920

Reported subsidiary net assets / 2009 / south africa industrial newly included

RMB 512,115

Reported subsidiary net assets / 2009 / spain newly included

RMB 4,893,705.64

Reported subsidiary net profit / 2009 / spain newly included

RMB -12,238.26

Reported subsidiary net assets / 2009 / jiujiang mining newly included

RMB 1,000,000

Reported subsidiary net profit / 2009 / jiujiang mining newly included

RMB -7,869.63

In FY2009, the investment note identified Jushi Pandeng Electronic Substrate as a joint venture with 50% ownership and 50% voting rights. Its stated business was production and sale of glass fiber and products for information technology and other high-technology applications. The note reports the investee’s revenue of CNY 160,099,071.36, net assets of CNY 165,621,381.04 and a net loss of CNY 21,640,801.00. The group recognised an equity-method loss of CNY 10,820,400.50 and carried its investment at CNY 82,810,690.52. The investee’s full-company figures, the group’s investment balance and the group’s share of its result are different measures, not additional consolidated sales or cash distributions. The wider associate portfolio included building-materials trading, real-estate development, coated and insulating glass engineering, and white cement. Those activities explain the historical business perimeter without establishing realized revenue from every registered activity or a completed later integration.

Reported investee revenue / 2009 / pandeng investee whole company

RMB 160,099,071.36

Reported investee net profit / 2009 / pandeng investee whole company

RMB -21,640,801

Investee net assets / 2009 / pandeng investee whole company

RMB 165,621,381.04

Equity method result / 2009 / pandeng group investment result

RMB -10,820,400.5

Investment carrying value / 2009 / pandeng group investment

RMB 82,810,690.52

The long-term-investment schedule closed at gross carrying value CNY 186,885,365.96, after an opening balance of CNY 199,990,810.76, additions of CNY 827,778.74 and reductions of CNY 13,933,223.54. Cumulative impairment of CNY 12,647,435.72 reconciles the schedule to net long-term investments of CNY 174,237,930.24 in the consolidated balance sheet. Most of that allowance, CNY 12,327,935.72, concerned the historical investment in Shandong Yantai Bohai Chemical Building Materials; smaller amounts concerned two other investments. The report table shows dashes for current impairment charges and cash dividends in the investment schedule. The closing allowance is not a new FY2009 expense, and accounting investment reductions are not all cash receipts.

Jushi Group acquired the remaining 43% of Jushi Chengdu from Sichuan Chengdu Zhenshi Investment for CNY 502,521,134.43. The report describes a related-party transaction because the listed company’s vice chairman also chaired the seller. It used a valuation dated October 31, 2009: total Chengdu equity was assessed at CNY 1,168,653,801.00 using a discounted-income method, and the price equaled 43% of that assessed value. This is a transaction valuation reported by the issuer, not a current market valuation or independently verified forecast. The acquisition table gives December 29, 2009 as the purchase date and states no contribution between purchase and year-end; a separate full-year common-control contribution is CNY 15,200,775.12. The board discussion reports shareholder approval in 2010 and registration completed on March 22, 2010. Those dates and contribution scopes are retained separately. The CNY 351,764,794.10 year-end purchase payable is an unpaid transaction balance, not another acquisition price or proof of completed cash settlement.

On November 24, 2009, the board approved a proposal for Beixin Technology’s subsidiary Zhujiang Junan Cement Products to form Shenzhen Xinjunjian Property Investment with China National Building Material Investment, an affiliate of the controlling shareholder. The planned contribution comprised CNY 8,000,000.00 in cash and land-use rights valued at CNY 8,000,000.00, for joint property development. The mixture of cash and rights matters for capital allocation: the entire proposed contribution was not a cash payment, and land-use rights were not freehold ownership. This disclosure establishes a proposed venture and its contribution terms. It does not establish a completed development, project sales, address, later operating result or commercial success. The four newly registered entities identified as entering FY2009 consolidation were different named entities.

Proposed contribution / 2009 / property venture cash

RMB 8,000,000

Proposed contribution / 2009 / property venture land rights

RMB 8,000,000