China Jushi FY2012: Debt and related-party balances

The FY2012 distribution proposal uses the 872,629,500 shares outstanding at 31 December 2012 and CNY 1 per ten shares, before tax. The 40,868,900 compensation shares are excluded from dividend entitlement. Subtraction gives 831,760,600 eligible shares, which reconcile to the proposed CNY 83,176,060 cash distribution. The exclusion affects the proposed payment base; it does not prove that those shares had already been canceled. Parent-company net profit was CNY 96,631,025.38, whereas consolidated profit attributable to listed-company owners was CNY 274,183,405.08. These are distinct accounting perimeters, not interchangeable measures of distributable cash. No capital-reserve conversion was proposed for FY2012. The financial note dates the resolution 13 March 2012 while using share capital at 31 December 2012; the report is signed 13 March 2013. That inconsistent source date is retained without inventing a corrected event date. This account explains a proposal, rather than evidence that the FY2012 dividend had been paid.

Reported shareholder share base / 2012 / fy2012 distribution year end base

872,629,500 shares

Reported cash dividend per ten shares / 2012 / fy2012 proposed before tax

1 CNY/10 shares

Reported shareholder cash dividend / 2012 / fy2012 proposed before tax

RMB 83,176,060

The historical note describes the 27 April 2012 shareholder approval for the FY2011 distribution on a 581,753,000-share base: CNY 1.38 per ten shares and five additional shares per ten through capitalization of reserves. The financial note says CNY 80,281,914 was distributed in cash; dividing that amount by the share base gives CNY 1.38 per ten shares. The dividend-summary row nevertheless prints CNY 1.39 per ten shares. Both source rates are retained, with the arithmetic explaining why the note rate matches the disclosed total. The reserve conversion added 290,876,500 shares, bringing share capital to 872,629,500. It was a transfer from reserves, rather than a fresh cash equity issue. The cash dividend and the increase in share count therefore have different effects on company cash and per-share comparisons. The FY2011 entitlement, its FY2012 approval/implementation account and the separate FY2012 dividend proposal are kept apart.

Reported shareholder share base / 2012 / fy2011 distribution approved fy2012

581,753,000 shares

Reported shareholder cash dividend / 2012 / fy2011 distribution paid fy2012

RMB 80,281,914

Reported cash dividend per ten shares / 2011 / fy2011 distribution financial note

1.38 CNY/10 shares

Reported cash dividend per ten shares / 2011 / fy2011 distribution summary table

1.39 CNY/10 shares

Reported reserve conversion shares / 2012 / fy2011 conversion implemented fy2012

290,876,500 shares

Reported reserve conversion per ten shares / 2012 / fy2011 conversion implemented fy2012

5 shares/10 shares

The group received CNY 12,138,148,035.15 in borrowing cash and paid CNY 12,631,589,252.22 to repay debt during FY2012. These are gross annual cash flows: they show financing turnover but do not measure closing debt or imply that all borrowing receipts were new net debt. Bond issuance contributed CNY 1,900,000,000 of cash, alongside the other financing rows. Payments for dividends, profit distributions and interest together totaled CNY 755,896,842.79; that combined row cannot be labeled as dividends alone. Net financing cash was CNY 878,458,575.40. Operating cash of CNY 1,128,842,340.70, net investing cash of negative CNY 1,330,941,131.96, this financing flow and the negative CNY 4,690,392.24 exchange-rate effect reconcile to a CNY 671,669,391.90 increase in cash and cash equivalents. Adding that increase to opening cash of CNY 1,110,653,687.30 gives closing cash of CNY 1,782,323,079.20. The bridge explains cash funding across the year; it does not establish future refinancing availability.

Reported consolidated borrowing cash receipts / 2012 / consolidated fy2012

RMB 12,138,148,035.15

Reported debt cash repayments / 2012 / consolidated fy2012

RMB 12,631,589,252.22

Reported bond cash receipts / 2012 / consolidated fy2012

RMB 1,900,000,000

Reported dividend profit interest cash payments / 2012 / consolidated combined fy2012

RMB 755,896,842.79

Reported financing cash flow / 2012 / consolidated fy2012

RMB 878,458,575.4

Reported cash fx effect / 2012 / consolidated fy2012

RMB -4,690,392.24

Reported cash equivalent increase / 2012 / consolidated fy2012

RMB 671,669,391.9

Reported cash equivalents / 2012 / consolidated opening fy2012

RMB 1,110,653,687.3

Consolidated year-end short-term borrowings were CNY 5,450,126,725.92. Current maturities of long-term borrowings were a separate CNY 1,537,802,437.77, while noncurrent long-term borrowings were CNY 3,939,439,246.53. These distinguish short-term loans from the portion of longer loans falling due within one year and the remaining noncurrent balance. The current-maturity note says none of the loans in that disclosed category was an overdue loan that had obtained an extension; that statement does not prove there was no refinancing risk elsewhere. Financing-lease payables were CNY 99,709,501.05 in the current category and CNY 157,683,042.05 in the noncurrent long-payables schedule. Total noncurrent long-term payables of CNY 386,937,724.52 include other obligations and should not all be called bank loans or added again to the lease component. Debt balances are distinct from annual cash repayments and from guarantees supporting subsidiaries.

Reported short-term borrowings / 2012 / consolidated year end

RMB 5,450,126,725.92

Reported current long term borrowings / 2012 / consolidated year end

RMB 1,537,802,437.77

Reported noncurrent long term borrowings / 2012 / consolidated year end

RMB 3,939,439,246.53

Reported finance lease payables / 2012 / consolidated current year end

RMB 99,709,501.05

Reported finance lease payables / 2012 / consolidated noncurrent year end

RMB 157,683,042.05

Reported long term payables / 2012 / consolidated noncurrent year end

RMB 386,937,724.52

Jushi Group issued CNY 700,000,000 of unsecured short-term financing bills, or commercial paper, on 21 February 2012, with a 366-day term and 6% coupon. The year-end other-current-liability balance for this instrument was CNY 736,633,333.34. The listed company separately issued a CNY 1,200,000,000 corporate bond on 17 October 2012 with a seven-year term and an unsecured 5.56% fixed coupon for the first five years. At the end of year five, the issuer could increase the coupon and investors could exercise a put; 17 October 2017 was the repayment date for the portion put back. The last two years could therefore carry an increased coupon, and the seven-year term did not mean every holder had to wait until 2019. Its year-end carrying balance was CNY 1,189,706,342.33 and reported interest payable was CNY 13,861,917.81. The two issuers and instruments are therefore not interchangeable, even though their stated issuance amounts together match CNY 1,900,000,000 of bond cash receipts in the consolidated cash-flow statement. Face amounts, carrying balances and separately disclosed interest payable remain distinct. The difference between face amount and carrying balance is not given an invented bridge or described as additional cash received. The short-term instrument places funding obligations on a different timetable from the corporate bond and its fifth-year put option.

Reported debt security face amount / 2012 / jushi group commercial paper issued fy2012

RMB 700,000,000

Reported debt security carrying amount / 2012 / jushi group commercial paper year end

RMB 736,633,333.34

Reported debt security face amount / 2012 / listed company corporate bond issued fy2012

RMB 1,200,000,000

Reported debt security carrying amount / 2012 / listed company corporate bond year end

RMB 1,189,706,342.33

Reported debt security interest payable / 2012 / listed company corporate bond year end

RMB 13,861,917.81

Reported debt security coupon / 2012 / jushi group commercial paper

6%

Reported debt security term / 2012 / jushi group commercial paper

366 days

Reported debt security coupon / 2012 / listed company corporate bond initial five years

5.56%

Reported debt security term / 2012 / listed company corporate bond put at year five

7 years

The shareholder-meeting record approved a CNY 800,000,000 contribution to Jushi Group in July 2012 alongside the Jinshi and Leishi acquisitions, and a CNY 1,150,000,000 contribution in November 2012 alongside the Chengdu line-conversion and other decisions. The approvals sum to CNY 1,950,000,000. The parent investment-account table also records that amount of annual additions for Jushi Group, whose closing investment cost was CNY 7,661,620,009.39. These are approval and investment-account measures. The already-described parent cash-flow table separately shows CNY 1,400,000,000 paid for investments during FY2012, so the accounting addition and cash payment must not be silently equated or added as two separate project budgets. The passages cited here do not demonstrate a complete timing or settlement bridge between them. The group's manufacturing projects retain their own design capacity, budgets and construction stages; the shareholder funding decisions do not prove that those projects were all commissioned.

Reported approved subsidiary contribution / 2012 / jushi july 2012

RMB 800,000,000

Reported approved subsidiary contribution / 2012 / jushi november 2012

RMB 1,150,000,000

Reported parent investment addition / 2012 / jushi fy2012

RMB 1,950,000,000

Reported parent subsidiary investment cost / 2012 / jushi year end

RMB 7,661,620,009.39

The closing related-party schedule reports gross trade receivables of CNY 63,636,341.31 with CNY 5,852,280.88 of allowances, prepayments of CNY 14,780,231.56 and gross other receivables of CNY 20,477,402.32 with CNY 1,699,851.29 of allowances. On the payable side it reports trade payables of CNY 14,617,211.37, customer advances of CNY 3,330,582.43 and other payables of CNY 5,045,674.79. Each category is a subset of the corresponding group account, not an additional layer of assets, debt or revenue. Related sales, equipment advances, logistics settlements and other balances therefore should not be collapsed into one net funding number without a demonstrated right and basis to offset. The sales note identifies transactions with newly acquired Jinshi and Leishi before acquisition as related-party transactions. The change in group scope matters when comparing trading flows with year-end balances; it does not establish that all related trade continued outside the consolidated group or that every amount represents improper funds occupation. Relationships are recorded to the extent disclosed here, without extending research recursively to counterparties.

Reported related receivables gross / 2012 / trade year end

RMB 63,636,341.31

Reported related receivable allowance / 2012 / trade year end

RMB 5,852,280.88

Related-party supplier prepayments / 2012 / year end

RMB 14,780,231.56

Reported related receivables gross / 2012 / other year end

RMB 20,477,402.32

Reported related receivable allowance / 2012 / other year end

RMB 1,699,851.29

Reported related payables / 2012 / trade year end

RMB 14,617,211.37

Related customer advances and contract liabilities / 2012 / year end

RMB 3,330,582.43

Reported related payables / 2012 / other year end

RMB 5,045,674.79

Lianyungang Zhongfu Lianzhong Composite Materials Group is identified as a related customer. The leading-receivable table shows a closing gross balance of CNY 44,957,287.21, whereas the related-party receivable schedule reports CNY 46,255,657.21 for the same named company, before its separately listed allowance. The numerical difference is CNY 1,298,370. Both values and their source-table scopes are retained. The cited pages provide no demonstrated bridge between them, so neither amount is silently substituted for the other and the difference is not attributed to tax, a subsequent payment or allowance netting. This limits exact counterparty comparisons while still showing the disclosed trading and credit relationship. The two balances are alternative source representations, not two amounts to add together.

Reported counterparty receivable balance / 2012 / zhongfu lianzhong leading table year end

RMB 44,957,287.21

Reported counterparty receivable balance / 2012 / zhongfu lianzhong related table year end

RMB 46,255,657.21

The related-guarantee schedule records Zhenshi Holding Group as guarantor for borrowings of Jushi Group and the Jinshi and Leishi businesses. For one Jushi Group facility, the maximum guarantee is CNY 900,000,000, while the year-end underlying loans are CNY 500,000,000 and USD 24,200,000. The amounts falling due within one year under that facility are CNY 500,000,000 and USD 13,600,000, subsets of those loans. A separate dollar-denominated Jushi Group facility has a stated guarantee amount of USD 12,600,000 and year-end borrowing of USD 7,560,000. These are shareholder guarantees received by group companies, distinct from guarantees the listed company gives to subsidiaries. Facility limits, outstanding loans and current maturities must not be added as three layers of borrowing, and the original currencies are retained without an unsupported conversion or company-wide debt total. The disclosed support does not by itself prove continued facility availability, a guarantee payment or absence of refinancing risk.

Reported received guarantee limit / 2012 / zhenshi jushi facility one year end

RMB 900,000,000

Reported guaranteed borrowing balance / 2012 / zhenshi jushi facility one year end cny

RMB 500,000,000

Reported guaranteed borrowing balance / 2012 / zhenshi jushi facility one year end usd

24,200,000 USD

Reported guaranteed current borrowing / 2012 / zhenshi jushi facility one year end cny

RMB 500,000,000

Reported guaranteed current borrowing / 2012 / zhenshi jushi facility one year end usd

13,600,000 USD

Reported received guarantee limit / 2012 / zhenshi jushi facility two year end

12,600,000 USD

Reported guaranteed borrowing balance / 2012 / zhenshi jushi facility two year end usd

7,560,000 USD

Jushi Group transferred furnace and other production equipment to CMB Financial Leasing and leased it back. The contract describes an equipment transfer value and total rent of CNY 400,189,851.46, a first rent installment of CNY 100,189,851.46, a three-year term and quarterly rent payments. Their numerical difference is CNY 300,000,000, matching the financing-lease cash inflow separately reported for FY2012. A CNY 24,000,000 one-time lease deposit is already explained among other receivables; it is not an extra item of available cash. Jushi Chengdu provided an irrevocable joint-liability guarantee for the contract. The equipment remained in Jushi Group's possession without physical delivery, while ownership was treated as transferred when the lessor paid the transfer consideration. This is a financing arrangement using existing productive equipment, not newly commissioned manufacturing capacity. The group minimum-payment schedule totals CNY 276,213,294.80, compared with unrecognized financing charges of CNY 18,820,751.70. Subtraction gives CNY 257,392,543.10, reconciling to the already-described current and noncurrent lease principal. Minimum payments, outstanding principal, interest charges, deposit and guarantor support are different measures and should not be added as separate layers of debt.

Reported sale leaseback transfer value / 2012 / jushi cmb contract

RMB 400,189,851.46

Reported sale leaseback first rent / 2012 / jushi cmb contract

RMB 100,189,851.46

Reported lease financing cash inflow / 2012 / consolidated fy2012

RMB 300,000,000

Reported minimum lease payments / 2012 / year end future schedule

RMB 276,213,294.8

Reported unrecognized lease charges / 2012 / year end

RMB 18,820,751.7

The parent-company other-receivable note reports gross year-end balances of CNY 217,775,990.89 and allowances of CNY 16,010,235.30. These are not the group's consolidated other receivables. The related-party subset totals CNY 214,511,030.81, including CNY 140,511,030.81 from Beixin Technology Development, CNY 70,000,000.00 from Jushi Group and CNY 4,000,000.00 from the Beijing Luxin home-market subsidiary. Such parent-to-subsidiary balances help explain capital deployed through operating subsidiaries alongside the already-described parent cash flows. They must not be added again to consolidated external assets, or automatically labeled external sales, available cash or improper funds occupation. The note records distinct aging and impairment measures, but the selected figures do not establish repayment schedules or that every remaining balance is collectible. The named relationships are retained at the extent disclosed, without extending the study to counterparties.

Reported parent other receivables / 2012 / gross year end

RMB 217,775,990.89

Reported parent other receivable allowance / 2012 / year end

RMB 16,010,235.3

Reported parent related receivables / 2012 / subsidiary subset year end

RMB 214,511,030.81

Reported parent subsidiary receivable / 2012 / beixin year end

RMB 140,511,030.81

Reported parent subsidiary receivable / 2012 / jushi year end

RMB 70,000,000

Reported parent subsidiary receivable / 2012 / beijing luxin year end

RMB 4,000,000