China Jushi FY2011: Debt and related-party balances

For FY 2011 the issuer proposed a cash dividend of CNY 1.38 per ten shares, before tax, totaling CNY 80,281,914 on 581,753,000 shares. It separately proposed five new shares per ten by capitalizing reserves. That implies 290,876,500 additional shares, a reserve transfer rather than fresh cash equity proceeds. The parent capital reserve was CNY 4,814,035,869.29, distinct from the consolidated reserve of CNY 1,650,525,907.35. Subtracting the implied transfer gives CNY 4,523,159,369.29, while the proposal prints CNY 4,532,159,369.29: a CNY 9,000,000 arithmetic difference that remains disclosed without changing either original figure. The year-end parent equity statement has no completed reserve-to-capital transfer for this proposal. The post-balance-sheet note dates board approval 15 March 2012 and says shareholder approval was still needed. This is therefore a proposal concerning FY 2011 profit, not proof of FY 2011 cash payment or implemented bonus shares. Parent net profit of CNY 288,759,609.36 also differs from consolidated owner profit and is not itself available cash.

Reported cash dividend per ten shares / 2011 / fy2011 proposed before tax

1.38 CNY/10 shares

Reported shareholder cash dividend / 2011 / fy2011 proposed before tax

RMB 80,281,914

Reported reserve conversion per ten shares / 2011 / fy2011 proposed

5 shares/10 shares

Reported capital reserve / 2011 / parent year end fy2011

RMB 4,814,035,869.29

Reported capital reserve / 2011 / consolidated year end fy2011

RMB 1,650,525,907.35

Reported proposed capital reserve after conversion / 2011 / fy2011 proposal as printed

RMB 4,532,159,369.29

Parent-only net profit / 2011 / parent fy2011 distribution context

RMB 288,759,609.36

At 31 December 2011, consolidated monetary funds were CNY 1,457,555,554.74, while cash and cash equivalents in the cash-flow statement were CNY 1,110,653,687.30. The CNY 346,901,867.44 difference equals restricted other monetary funds in the asset-restriction note. The available-cash table consists of cash on hand, bank deposits available for payment and available other monetary funds; restricted margins and deposits therefore should not be counted again as freely available liquidity. This distinction matters for financing construction, working capital and debt repayment. It does not establish that the entire available balance could be transferred between subsidiaries or jurisdictions immediately. The restricted-asset table also contains noncash collateral, which is a separate measure from usable cash. The opening cash-and-equivalent balance of CNY 1,395,847,478.08 is a beginning-of-year stock, not cash generated during FY2011.

Reported monetary funds / 2011 / consolidated year end fy2011

RMB 1,457,555,554.74

Reported cash equivalents / 2011 / consolidated year end fy2011

RMB 1,110,653,687.3

Reported monetary funds restricted for bill deposits and term deposits / 2011 / consolidated other monetary funds fy2011

RMB 346,901,867.44

Reported available cash component / 2011 / cash on hand fy2011

RMB 513,456.02

Reported available cash component / 2011 / bank deposits fy2011

RMB 1,065,817,838.77

Reported available cash component / 2011 / other funds fy2011

RMB 44,322,392.51

Reported cash equivalents / 2011 / consolidated opening fy2011

RMB 1,395,847,478.08

Consolidated operations generated CNY 1,270,759,508.65 of cash in FY2011, compared with CNY 783,662,952.34 in FY2010. Net investing cash flow was negative CNY 1,590,177,792.79. Cash paid to acquire or construct fixed, intangible and other long-lived assets was CNY 1,534,311,710.26; this is an annual payment measure across the group, not an allocation to any single production line. Construction-accounting additions can include transfers of existing assets and cannot be substituted for this cash payment. Acquiring subsidiaries and other businesses used CNY 86,130,362.11 net cash, after CNY 94,578,432 of cash consideration less CNY 8,448,069.89 of cash acquired. That differs from the share-funded purchase of the remaining Jushi interest. Financing supplied net CNY 40,629,326.15 and exchange movements reduced cash by CNY 6,404,832.79. Together these flows explain the CNY 285,193,790.78 decline in cash and equivalents. The cash-reconciliation adjustments for inventories and payables describe cash effects; they are not automatically identical to opening-to-closing balance-sheet changes.

Reported operating cash flow / 2011 / consolidated annual

RMB 1,270,759,508.65

Reported comparative operating cash flow / 2010 / consolidated fy2010 comparative

RMB 783,662,952.34

Reported investing cash flow / 2011 / consolidated annual

RMB -1,590,177,792.79

Reported long lived asset cash payments / 2011 / consolidated annual

RMB 1,534,311,710.26

Reported acquisition net cash payments / 2011 / consolidated annual

RMB 86,130,362.11

Reported acquisition cash payments / 2011 / consolidated annual

RMB 94,578,432

Reported acquired business cash / 2011 / consolidated annual

RMB 8,448,069.89

Reported financing cash flow / 2011 / consolidated annual

RMB 40,629,326.15

Reported cash fx effect / 2011 / consolidated annual

RMB -6,404,832.79

Reported cash equivalent increase / 2011 / consolidated annual

RMB -285,193,790.78

The cash-flow statement records CNY 9,586,088,908.82 of borrowing receipts and CNY 9,467,754,407.45 of debt repayments during FY2011. These large annual flows describe funding and refinancing activity; they are not additional amounts to add to year-end debt. Closing short-term borrowings were CNY 5,838,513,680.72, current maturities of long-term loans CNY 1,289,515,247.37 and noncurrent long-term loans CNY 4,161,849,668.22. The broader current-noncurrent-liability line of CNY 1,289,795,039.37 also includes CNY 279,792 of deferred-grant amortization, which is not an interest-bearing loan. The cash-flow statement separately labels CNY 700,000,000 as cash received from issuing bonds. Yet the balance sheet shows no closing bonds-payable balance, and the short-financing-instrument note has only an opening balance; the explanatory note says those instruments were repaid and none remained at year-end. The cited notes do not bridge the cash-receipt line to an instrument or closing balance. Each original disclosure is retained without inventing a new year-end bond or assuming a current repayment guarantees future refinancing.

Reported consolidated borrowing cash receipts / 2011 / consolidated annual

RMB 9,586,088,908.82

Reported debt cash repayments / 2011 / consolidated annual

RMB 9,467,754,407.45

Reported bond cash receipts / 2011 / consolidated cash flow label fy2011

RMB 700,000,000

Reported short-term borrowings / 2011 / consolidated year end fy2011

RMB 5,838,513,680.72

Reported current long term borrowings / 2011 / consolidated year end fy2011

RMB 1,289,515,247.37

Reported noncurrent long term borrowings / 2011 / consolidated year end fy2011

RMB 4,161,849,668.22

Reported current noncurrent liabilities / 2011 / consolidated year end fy2011

RMB 1,289,795,039.37

Reported current deferred grant amortization / 2011 / consolidated year end fy2011

RMB 279,792

The consolidated receivable note reports CNY 191,125,994.30 of gross receivables transferred to banks with recourse, a CNY 189,214,734.35 net carrying amount and CNY 285,582,433.38 of associated short-term loans. Recourse means the transfer should not be presented as an unconditional exit from the underlying obligation. The detailed export-financing contract reports CNY 241,951,264.38 of gross transferred invoices, including CNY 136,243,977.35 due from subsidiaries within the consolidation. Removing that internal amount and adding the three other invoice-financing balances reproduces the consolidated gross total; the same treatment reconciles net receivables. The four disclosed loan amounts also sum to the consolidated associated-loan total. Their different invoice and loan amounts are retained rather than assuming a one-for-one advance rate. A CNY 63,135,018 cash margin in the export contract is collateral, not fresh financing and not an extra addition to the total restricted-cash balance. The loans are part of reported borrowings, so counting them again as separate debt would overstate financing exposure.

Reported recourse receivable gross / 2011 / consolidated year end fy2011

RMB 191,125,994.3

Reported recourse receivable net / 2011 / consolidated year end fy2011

RMB 189,214,734.35

Reported recourse financing borrowings / 2011 / consolidated year end fy2011

RMB 285,582,433.38

Reported recourse receivable gross / 2011 / export bank of china contract

RMB 241,951,264.38

Reported recourse receivable internal / 2011 / export bank of china contract

RMB 136,243,977.35

Reported recourse receivable net / 2011 / export bank of china contract

RMB 240,894,191.51

Reported recourse receivable gross / 2011 / export construction bank contract

RMB 56,714,931.69

Reported recourse receivable gross / 2011 / domestic jushi bank of china contract

RMB 11,741,444.9

Reported recourse receivable gross / 2011 / domestic panding bank of china contract

RMB 16,962,330.68

Reported recourse financing borrowings / 2011 / export bank of china contract

RMB 211,120,491.32

Reported recourse financing borrowings / 2011 / export construction bank contract

RMB 49,462,065

Reported recourse financing borrowings / 2011 / domestic jushi bank of china contract

RMB 9,999,953.79

Reported recourse financing borrowings / 2011 / domestic panding bank of china contract

RMB 14,999,923.27

Reported financing cash margin / 2011 / export bank of china contract

RMB 63,135,018

The group held CNY 498,309,961.54 of receivable bills at year-end. It separately disclosed CNY 159,200,402.89 pledged and CNY 468,524,533.56 already endorsed to others but not yet due. Holding, pledging and endorsing are different disclosed states; these numbers are not three additive pools of liquid assets. Pledged bills comprise CNY 123,853,223.87 securing loans, CNY 33,048,969.02 used for discounting and CNY 2,298,210 supporting bank-acceptance issuance. The asset-restriction table reports CNY 4,260,199,460.80 in total, including CNY 3,528,507,538.10 of fixed assets and CNY 36,374,918.02 of intangible assets used as collateral, together with restricted cash, net recourse receivables and pledged bills. The latter amounts are components already explained in the financing notes, not additional exposures to count again. These arrangements show how production assets and working capital support financing. They do not show that collateral has been seized, that a guarantee has been called or that the restricted-asset amount equals cash debt.

Reported receivable bills / 2011 / consolidated year end fy2011

RMB 498,309,961.54

Reported pledged bills / 2011 / consolidated year end fy2011

RMB 159,200,402.89

Reported endorsed unexpired bills / 2011 / consolidated year end fy2011

RMB 468,524,533.56

Reported pledged bill use / 2011 / loan security fy2011

RMB 123,853,223.87

Reported pledged bill use / 2011 / discount fy2011

RMB 33,048,969.02

Reported pledged bill use / 2011 / bank acceptance issuance fy2011

RMB 2,298,210

Reported restricted assets / 2011 / consolidated total fy2011

RMB 4,260,199,460.8

Reported restricted assets / 2011 / fixed assets fy2011

RMB 3,528,507,538.1

Reported restricted assets / 2011 / intangible assets fy2011

RMB 36,374,918.02

Closing long-term payables were CNY 237,474,832.34, which the issuer explains arose mainly from buying platinum-rhodium alloy. The table identifies Standard Chartered Bank with CNY 227,986,840.50, Fournier Group with CNY 9,386,875 and Cathay Bank with CNY 101,116.84; these sum to the reported balance. The original table also preserves foreign-currency initial amounts and contractual terms, rather than treating every original-currency amount as a CNY balance. This financing relates to valuable production materials and explains why capital needs extend beyond furnace construction alone. It is not automatically a finance lease, an extra disclosed plant or new production capacity. The same explanatory note attributes the large reduction in trade payables mainly to paying platinum-rhodium amounts. It does not provide a complete bridge between those payments, long-term payables and the annual cash-flow lines. Their separate scopes are kept without attributing all working-capital cash movements to one purchase.

Reported long term payables / 2011 / consolidated year end fy2011

RMB 237,474,832.34

Reported long term payable counterparty / 2011 / standard chartered fy2011

RMB 227,986,840.5

Reported long term payable counterparty / 2011 / fournier fy2011

RMB 9,386,875

Reported long term payable counterparty / 2011 / cathay fy2011

RMB 101,116.84

The listed parent had negative operating cash flow of CNY 36,166,333.89 and closing cash and equivalents of CNY 208,026,608.78, compared with positive operating cash generated by the consolidated group. Its investment-income note records CNY 347,085,693.03 overall, including CNY 348,000,000 under the cost method from Jushi declaring a dividend. Recognition of that subsidiary dividend is not itself evidence of cash received in the year: the parent cash-flow statement has no amount on the investment-income-cash-receipt line. Internal balances also require a separate perimeter. The parent reports CNY 620,000,000 due from Jushi, CNY 125,298,790.50 from Beixin and CNY 6,000,000 from its home-market subsidiary. These are parent claims on subsidiaries, not additional consolidated outside-customer receivables. They help explain how the holding company and operating subsidiaries relate, without assuming all group cash is available for a parent dividend or adding internal claims to group assets.

Reported operating cash flow / 2011 / parent annual

RMB -36,166,333.89

Reported cash equivalents / 2011 / parent year end fy2011

RMB 208,026,608.78

Reported parent-only investment income / 2011 / parent annual

RMB 347,085,693.03

Reported parent declared subsidiary dividend / 2011 / jushi parent cost method fy2011

RMB 348,000,000

Reported parent subsidiary receivable / 2011 / jushi year end fy2011

RMB 620,000,000

Reported parent subsidiary receivable / 2011 / beixin year end fy2011

RMB 125,298,790.5

Reported parent subsidiary receivable / 2011 / home market year end fy2011

RMB 6,000,000

Management links the purchase of Jushi Group’s minority interest with the subsidiary’s change from foreign-invested to domestic status. The management discussion refers to the acquisition in August, while the detailed tax notes describe the previous status through July; these passages should not be compressed into an invented common effective date for every tax consequence. Consolidated business taxes and surcharges were CNY 43,899,223.36, compared with CNY 17,004,033.47 in the preceding year. Management attributes the increase principally to urban maintenance and construction tax and education surcharges following the change in status. These are different from income-tax expense and should not be described as a blanket change in every subsidiary’s income-tax rate. The closing balance explanations also associate higher other payables with supplementary taxes following the status change and unpaid consideration for Xinfu, and lower other noncurrent liabilities with repayment of domestic-equipment tax rebates offsetting previously recognized deferred income. Separately, the report says Jushi Jiujiang became profitable and reversed deferred tax assets previously recognized on losses, increasing income-tax expense alongside higher profit. It does not quantify the subsidiary-specific use of tax losses. At Jiujiang, management also links higher taxes payable to the gradual offset of construction-period input VAT after normal production began. Each explanation has its own entity and accounting scope.

Reported business taxes surcharges / 2011 / consolidated annual fy2011

RMB 43,899,223.36

The closing financial-statement explanations say Beixin Technology Development fully collected its entrusted loan during FY2011. The comparative balance table shows an opening loans-and-advances amount of CNY 22,322,382.44 and a decrease of the same amount. This existing loan collection is compatible with the investment discussion’s statement that there were no entrusted-loan activities during the year; the latter should not be expanded into a claim that no opening loan existed. The closing table’s empty loan balance is interpreted alongside the explicit full-collection explanation, rather than routinely converting blank financial-table cells to zero. A different explanation attributes the decline in other receivables chiefly to Jushi Jiujiang receiving relocation-into-the-industrial-park compensation. The cash-flow notes disclose such receipts separately. Collection of an opening financial asset and receipt of relocation compensation have different business and cash classifications, so neither should be described as product sales, new customer demand or a recurring improvement in operating margin. These specific explanations supplement the financing and operating-support notes without extending research into borrowers or other counterparties.

Reported opening entrusted loans / 2011 / beixin opening fy2011

RMB 22,322,382.44

The report identifies Tongxiang Jinshi Precious Metal Equipment and Tongxiang Leishi Micropowder as parties sharing key management personnel. It reports CNY 102,048,477.01 of platinum-rhodium purchases and bushing-processing charges from Jinshi, representing 20.94% of the disclosed transaction category, and CNY 228,048,085.15 of pyrophyllite purchases from Leishi, representing 65.54% of that category. Their disclosed FY2011 related-party status must not be replaced with ownership acquired in a later year. Zhejiang Yushi International Logistics, disclosed as controlled by the second-largest shareholder, supplied CNY 87,166,160.62 of sales freight at 79.69% of its category and CNY 37,613,558.16 of materials and engineering-equipment freight at 31.28% of that different category. The percentages therefore cannot be added or interpreted as shares of all group expenditure. These roles show the operating dependence represented by connected procurement and distribution. The issuer states that pricing used market prices and describes director and shareholder approval; these statements are attributed to the issuer rather than presented as an independent fairness finding. The full related-transaction table mixes sales, purchases, rentals, asset disposals and financing fees, so its total is not group revenue or a single production-input cost.

Reported related input purchase / 2011 / jinshi alloy and bushing processing fy2011

RMB 102,048,477.01

Reported related input purchase / 2011 / leishi pyrophyllite fy2011

RMB 228,048,085.15

Reported related logistics cost / 2011 / zhejiang yushi sales freight fy2011

RMB 87,166,160.62

Reported related logistics cost / 2011 / zhejiang yushi material and engineering freight fy2011

RMB 37,613,558.16

The related-party settlement table reports CNY 23,656,306.88 of gross trade receivables and CNY 623,749.99 of allowances, plus CNY 19,207,327.28 of other receivables and CNY 1,257,700.46 of allowances. The trade category concerns goods sold, whereas the other-receivable category includes CNY 13,282,103.45 of equipment amounts due from CNBM's import-export company. Their purposes and allowance bases remain separate. These balances are subsets of the respective consolidated receivable categories, not additional assets to add on top of the group balance sheet. The separate other-receivable table also names CNY 26,496,800 due from Jianning Real Estate, the purchaser in the Junan cement-equity transaction. The cited disclosures do not prove that this entire receivable equals unpaid consideration on that sale; no cash collected is calculated by subtracting it from the equity sale price. This preserves the distinction between a named relationship and a verified transaction-level cash bridge.

Reported related trade receivables / 2011 / consolidated year end fy2011

RMB 23,656,306.88

Reported related trade allowance / 2011 / consolidated year end fy2011

RMB 623,749.99

Reported related other receivables / 2011 / consolidated year end fy2011

RMB 19,207,327.28

Reported related other allowance / 2011 / consolidated year end fy2011

RMB 1,257,700.46

Reported related equipment receivable / 2011 / cnbm import export year end fy2011

RMB 13,282,103.45

Reported named other receivable / 2011 / jianning year end fy2011

RMB 26,496,800

The related-party settlement schedule reports closing trade payables of CNY 6,136,567.56, customer advances of CNY 3,543,872.18 and other payables of CNY 527,116.31. These are related-party subsets, not the consolidated totals for the same liability categories. The trade-payable entries include purchases and freight, with a separate valuation-fee entry, while the advance receipts chiefly concern trading-channel settlement. Other payables include a balance with Zhejiang Yushi International Logistics and a small balance with Surest Finance. This presentation should not turn all related liabilities into loans or assume that a freight balance has the same role as an equipment purchase. The separately disclosed long-term payable to Fournier remains part of the financing explanation and should not be added again simply because it also appears in the related-party note. Received shareholder guarantees are another distinct form of support, rather than company cash or a fresh liability on top of the borrowing already recognized. The schedule helps connect operating relationships with year-end settlement exposure. It does not by itself establish settlement timing, independent pricing fairness or a future default, and research stops at the issuer’s disclosed relationship.

Reported related-party trade payables / 2011 / consolidated year end fy2011

RMB 6,136,567.56

Related customer advances and contract liabilities / 2011 / consolidated year end fy2011

RMB 3,543,872.18

Related-party other payables / 2011 / consolidated year end fy2011

RMB 527,116.31