China Jushi FY2010: Debt and related-party balances

The consolidated financial statements report short-term borrowings of CNY 4,764,577,303.49, long-term borrowings falling due within one year of CNY 1,792,363,771.19 and noncurrent long-term borrowings of CNY 3,344,185,284.24 at December 31, 2010. The current-maturity borrowing note agrees with the financial-statement amount and divides it into unsecured, guaranteed and mortgaged loans. The management summary instead displays CNY 2,307,433,200 for noncurrent liabilities due within one year. That summary amount is not silently substituted into the financial-statement maturity series: the two source presentations are retained with their roles, and no reconciliation is inferred. These balances describe historical funding and refinancing exposure, rather than subsequent repayment outcomes or a current forecast. Borrowing inflows and repayments during the year are separate flow measures, and collateral values do not increase the loan principal a second time.

Reported short-term borrowings / 2010 / consolidated

RMB 4,764,577,303.49

Reported current long term borrowings / 2010 / consolidated

RMB 1,792,363,771.19

Reported long term borrowings / 2010 / consolidated

RMB 3,344,185,284.24

Reported management current maturity summary / 2010 / management summary

RMB 2,307,433,200

Jushi issued one-year commercial paper with CNY 500,000,000 face value on February 25, 2010, with a contractual maturity of February 25, 2011. The year-end balance was CNY 515,069,444.40, comprising the principal and CNY 15,069,444.40 of accrued interest. The interest-paid column is blank, so accrued interest is not presented as an observed cash payment. The issue connects the bond receipt in the annual cash-flow statement to a specific historical funding instrument; its closing balance should not all be labeled principal. The current-maturity loan table separately identifies a USD 38,400,000 loan due September 24, 2011 and translates it to CNY 254,311,680 at the reporting date. That foreign-currency exposure belongs to loans rather than this commercial-paper issue, and neither contractual date proves what occurred after the report period.

Reported commercial paper principal / 2010 / jushi commercial paper

RMB 500,000,000

Reported commercial paper balance / 2010 / jushi commercial paper

RMB 515,069,444.4

Reported commercial paper accrued interest / 2010 / jushi commercial paper

RMB 15,069,444.4

The restricted-asset note reports CNY 3,070,980,083.85 of assets supporting loan guarantees at year-end. This includes property, plant and equipment, intangible assets, pledged monetary funds, mortgaged receivables and pledged bills; it is an asset measure, not additional debt. The noncurrent long-term loan table separates CNY 1,001,121,689.51 of unsecured borrowing, CNY 2,026,530,668 of guaranteed borrowing, CNY 302,532,926.73 of mortgaged borrowing and CNY 14,000,000 of pledged borrowing. Guaranteed loans include guarantees by the listed parent for subsidiaries and cross-guarantees among subsidiaries. The collateral descriptions connect funding to the operating footprint: machinery and platinum-rhodium production components at Tongxiang, and warehouses, workshops and production components at Chengdu. These descriptions explain financing encumbrances; they do not establish another production project, an independently verified factory address or a second loan balance. Guarantee limits, actual borrowing and collateral carrying values require their own scopes.

Reported restricted assets / 2010 / consolidated

RMB 3,070,980,083.85

Reported unsecured long term borrowings / 2010 / consolidated

RMB 1,001,121,689.51

Reported guaranteed long term borrowings / 2010 / consolidated

RMB 2,026,530,668

Reported mortgaged long term borrowings / 2010 / consolidated

RMB 302,532,926.73

Reported pledged long term borrowings / 2010 / consolidated

RMB 14,000,000

The group sold receivables to banks with recourse and obtained CNY 37,000,000 of short-term borrowing. The receivables had a gross balance of CNY 43,217,118.93 and a net balance of CNY 42,784,947.74. The borrowing note identifies two Panding arrangements: CNY 15,000,000 backed by CNY 18,451,727.55 gross receivables, and CNY 22,000,000 backed by CNY 24,765,391.38. Their gross and net collateral amounts reconcile to the aggregate note. Separately, CNY 26,598,349.14 of unmatured discounted bank-acceptance bills produced borrowing of the same amount, split between Panding and Chengdu. The source explicitly describes bank borrowing, so this financing is not relabeled customer payment or a completed release from credit exposure. Collateral carrying amounts, facility limits and actual borrowings remain separate: adding the receivable collateral again to loan principal would count the same financing support twice. These mechanisms connect working capital to the operating subsidiaries' funding needs.

The annual guarantee table reports closing A-category guarantees of CNY 1,401,209,734.17 and guarantees to subsidiaries of CNY 1,485,095,000, totaling CNY 2,886,304,734.17. Its reported total-to-net-assets ratio was 202.93%. The A heading says subsidiaries are excluded, yet its detailed rows name Jiujiang, Chengdu and Panding, which were subsidiaries of Jushi. This presentation difference prevents treating every A amount as an unrelated external guarantee. The table reports annual new guarantees of CNY 2,153,628,000 in A and CNY 2,015,000,000 to subsidiaries; annual new activity is not substituted for closing outstanding balances. Guarantees to shareholders or controllers were reported as zero. Other disclosed risk categories include CNY 739,500,000 for borrowers with liability-to-asset ratios above 70% and CNY 1,435,642,733.05 above the stated half-net-assets threshold. Those overlapping classifications are parts of the reported guarantee exposure, not additional balances to add again. Historical contract amounts and end dates also remain distinct from the closing exposure.

Closing subsidiary-guarantee balance / 2010 / reported a category

RMB 1,401,209,734.17

Closing subsidiary-guarantee balance / 2010 / reported subsidiary b category

RMB 1,485,095,000

Closing subsidiary-guarantee balance / 2010 / reported a plus b

RMB 2,886,304,734.17

Reported annual new guarantees / 2010 / reported a category

RMB 2,153,628,000

Reported annual new guarantees / 2010 / reported subsidiary b category

RMB 2,015,000,000

Reported guarantee risk category / 2010 / borrower liability ratio above 70 percent

RMB 739,500,000

Reported guarantee risk category / 2010 / reported above half net assets threshold

RMB 1,435,642,733.05

Zhenshi provided a CNY 500,000,000 guarantee facility to Jushi, with actual borrowing of CNY 500,000,000 at year-end and a disclosed guarantee period from April 23, 2010 to June 30, 2012. This support runs into the operating group; it is not an outgoing guarantee to a shareholder and does not contradict the zero outgoing shareholder-guarantee category. Separate collateral arrangements disclose limits of CNY 79,797,000 for Panding property, CNY 370,368,000 for Jushi property and CNY 771,757,200 for Jushi equipment and precious-metal assets. Each of those three arrangements reports actual borrowing of zero at the reporting date. Their facility limits are therefore not imported as outstanding debt. The underlying collateral carrying amounts likewise support financing rather than creating another loan principal. These distinctions allow readers to assess both shareholder funding support and remaining secured borrowing capacity without inflating group debt by adding guarantees, asset values and unused limits.

Reported inbound guarantee limit / 2010 / zhenshi to jushi

RMB 500,000,000

Reported supported borrowing balance / 2010 / zhenshi to jushi

RMB 500,000,000

Reported undrawn collateral limit / 2010 / panding property

RMB 79,797,000

Reported undrawn collateral limit / 2010 / jushi property

RMB 370,368,000

Reported undrawn collateral limit / 2010 / jushi equipment and metals

RMB 771,757,200

Buildings for which title certificates had not been completed had original cost of CNY 474,297,418.66, accumulated depreciation of CNY 28,500,502.18 and net carrying value of CNY 445,796,916.48. The table identifies Jushi headquarters, Chengdu, Jiujiang, Jiujiang Mining, Zhejiang Beite and Baoyu Industrial. Their respective net amounts were CNY 103,768,672.12, CNY 41,332,522.56, CNY 258,024,927.51, CNY 7,722,473.46, CNY 9,682,956.84 and CNY 25,265,363.99. The note says certificates for the other subsidiaries were being processed, with completion timing uncertain. Baoyu was different: it did not own the land corresponding to its buildings and could not obtain the building certificates. These are disclosed title limitations relevant to asset rights and financing, rather than proof that all listed plants were unlawfully operating or had stopped production. They also do not identify an undisclosed physical address or establish that the buildings belong to a separately named expansion project. The distinct explanations and affected accounting balances are preserved.

Reported uncertificated building original / 2010 / consolidated

RMB 474,297,418.66

Reported uncertificated building depreciation / 2010 / consolidated

RMB 28,500,502.18

Reported uncertificated building net / 2010 / consolidated

RMB 445,796,916.48

Reported uncertificated building net / 2010 / jushi headquarters

RMB 103,768,672.12

Reported uncertificated building net / 2010 / chengdu

RMB 41,332,522.56

Reported uncertificated building net / 2010 / jiujiang

RMB 258,024,927.51

Reported uncertificated building net / 2010 / jiujiang mining

RMB 7,722,473.46

Reported uncertificated building net / 2010 / zhejiang beite

RMB 9,682,956.84

Reported uncertificated building net / 2010 / baoyu industrial

RMB 25,265,363.99

Restricted fixed assets used as bank-loan collateral had a net carrying amount of CNY 2,768,529,837.70. That included CNY 1,904,719,648.79 of platinum-rhodium alloy, CNY 468,476,745.11 of machinery and CNY 391,491,081.50 of buildings, with smaller transport and office-equipment balances. The restricted-asset note adds CNY 22,002,249.27 of intangible assets to give CNY 2,790,532,086.97 of assets in its collateral category. Restricted deposits, recourse receivables and discounted bills were separate categories in the wider restricted-asset total. Thus the fixed-asset table and the entire restricted-asset note do not use the same perimeter. A collateral carrying value describes assets supporting a loan; it is not the loan balance, a facility limit or an incremental liability. The balance also cannot be assumed to equal a realizable sale value. The manufacturing group therefore had a substantial portion of production assets supporting bank finance, with collateral amounts and actual debt retained separately for research.

Reported restricted fixed assets net / 2010 / consolidated

RMB 2,768,529,837.7

Reported restricted fixed assets net / 2010 / precious metal bushings

RMB 1,904,719,648.79

Reported restricted fixed assets net / 2010 / machinery

RMB 468,476,745.11

Reported restricted fixed assets net / 2010 / buildings

RMB 391,491,081.5

Reported restricted intangible assets / 2010 / collateral category

RMB 22,002,249.27

Reported collateral asset carrying value / 2010 / fixed and intangible assets

RMB 2,790,532,086.97

The borrowing notes identify actual secured arrangements tied to production assets. Jiujiang had CNY 30,000,000 borrowed against platinum-rhodium bushings with a disclosed carrying value of CNY 50,688,836.30. Jushi separately had CNY 200,000,000 of long-term borrowing secured by bushings valued at CNY 491,503,080.79, and USD 38,400,000 due within one year secured by alloy valued at CNY 326,855,589.77. The report translates the dollar loan to CNY 254,311,680; the dollar amount and reported yuan translation describe the same borrowing. Chengdu arrangements instead included mixed warehouses, workshops, machinery and bushings. One reports CNY 95,000,000 outstanding, including CNY 37,500,000 due within one year, and another CNY 80,000,000, including CNY 40,000,000 due within one year. Those current portions are included in the contract balances, not additional loans. Neither loan-to-collateral arithmetic nor historic facility dates establish the usable balance of every facility or an independently verified asset valuation.

Reported secured contract borrowing / 2010 / jiujiang metal contract

RMB 30,000,000

Reported secured contract collateral / 2010 / jiujiang metal contract

RMB 50,688,836.3

Reported secured contract borrowing / 2010 / jushi long term metal contract

RMB 200,000,000

Reported secured contract collateral / 2010 / jushi long term metal contract

RMB 491,503,080.79

Reported secured contract borrowing / 2010 / jushi current export bank metal contract

38,400,000 USD

Reported secured contract collateral / 2010 / jushi current export bank metal contract

RMB 326,855,589.77

Reported secured contract borrowing / 2010 / chengdu agricultural bank mixed contract

RMB 95,000,000

Reported secured contract borrowing / 2010 / chengdu bank of china mixed contract

RMB 80,000,000

Beixin entrusted a bank to lend CNY 24,000,000 to Luoyang Xinjingrun. The original contract expired in September 2009 and was not formally renewed; the report says the parties continued to execute the arrangement and applied a 5.31% rate from February 2009. This wording does not establish borrower default. Closing loan-loss allowance was CNY 1,677,617.56, with a FY2010 loan-impairment charge of CNY 237,617.56. The related-transaction charge was CNY 1,292,100, while the nonrecurring-income table reports CNY 1,274,400 of entrusted-loan income. These values retain their separate source roles because no complete bridge is disclosed. Principal, allowance, income and actual cash repayment remain distinct.

Reported entrusted loan principal / 2010 / beixin luoyang

RMB 24,000,000

Reported entrusted loan loss allowance / 2010 / beixin luoyang

RMB 1,677,617.56

Reported entrusted loan impairment charge / 2010 / consolidated annual

RMB 237,617.56

Reported related entrusted loan income / 2010 / luoyang related table

RMB 1,292,100

Reported nonrec entrusted loan income / 2010 / nonrec annual

RMB 1,274,400