China Jushi FY2013: Cash generation and working capital

Consolidated operating cash flow was CNY 1,425,846,462.25. The year-end cash-flow cash balance was CNY 1,841,420,934.84, compared with CNY 2,061,138,198.15 of balance-sheet monetary funds. The monetary-funds note identifies CNY 219,717,263.31 as restricted: this amount exactly explains the difference between the two reported balances. Other monetary funds of CNY 221,387,749.03 are not entirely restricted. The cash composition includes CNY 1,832,269,922.13 of bank deposits available for payment and CNY 1,670,485.72 of other available monetary funds. A year-end liquidity reading must distinguish funds available for payment from restricted deposits; it cannot treat the whole balance-sheet amount as freely deployable cash. Net cash increased CNY 59,097,855.64 over the year. The operating cash-flow reconciliation separately reports depreciation of CNY 697,252,380.74, whereas the fixed-asset movement note reports current depreciation of CNY 464,376,028.21. Both are retained as source-specific measures because the cited notes do not supply a bridge; their difference is not assigned to an invented expense category.

Reported operating cash flow / 2013 / consolidated

RMB 1,425,846,462.25

Reported monetary funds / 2013 / consolidated

RMB 2,061,138,198.15

Reported monetary funds restricted for bill deposits and term deposits / 2013 / consolidated

RMB 219,717,263.31

Reported monetary-funds balance / 2013 / cash flow composition

RMB 1,841,420,934.84

Reported other monetary funds / 2013 / consolidated

RMB 221,387,749.03

Reported depreciation / 2013 / operating cash flow reconciliation

RMB 697,252,380.74

Reported depreciation / 2013 / fixed asset movement

RMB 464,376,028.21

Year-end trade receivables were CNY 1,534,169,354.72 before bad-debt allowances of CNY 55,794,393.03, leaving a net carrying value of CNY 1,478,374,961.69. The report also records receivable write-offs of CNY 19,973,415.72; write-offs are separate from the closing allowance. The five largest receivable balances totaled CNY 250,192,978.59, or 16.31% of gross receivables. That concentration is a balance-sheet measure and is not the annual-sales concentration. Inventory was CNY 1,631,753,259.79 gross, with an impairment allowance of CNY 4,717,705.48 and a net carrying value of CNY 1,627,035,554.31. Finished goods accounted for CNY 1,275,800,240 of net inventory. The processing-materials row shows the same CNY 2,459,689.26 for gross inventory and allowance, while its net cell is blank; the blank cell is preserved rather than recorded as a reported zero. Management describes overseas credit periods and year-end sales promotion in explaining receivables, and stock preparation for later orders in explaining inventory. These explanations do not independently establish collection certainty or contracted future revenue.

Reported receivables gross / 2013 / trade receivables

RMB 1,534,169,354.72

Reported receivables allowance / 2013 / trade receivables

RMB 55,794,393.03

Reported receivables net / 2013 / trade receivables

RMB 1,478,374,961.69

Reported receivables writeoffs / 2013 / trade receivables

RMB 19,973,415.72

Reported gross inventory / 2013 / consolidated

RMB 1,631,753,259.79

Reported inventory allowance / 2013 / consolidated

RMB 4,717,705.48

Reported net inventory / 2013 / consolidated

RMB 1,627,035,554.31

Platinum-rhodium forming bushings are used in glass-fiber production. The accounting policy does not depreciate the precious-metal content; metal losses during repair are charged to production cost. This treatment applies to the specified bushings, rather than all plant machinery. The fixed-asset note reports CNY 5,607,740,229.40 for metal forming bushings at year end, within total fixed-asset net carrying value of CNY 9,591,453,422.83. These are monetary book values, not the weight of recoverable metal or evidence of immediately saleable inventory. CNY 1,257,437,189.86 was transferred from construction in progress to fixed assets during the year. The transfer is an accounting movement and differs from cash capital expenditure. Finance-leased fixed assets had a net book value of CNY 338,223,473.42. The report says that the second phase of the Bettere factory building, completed in June 2012, was still obtaining its ownership certificate, with completion expected in 2014. That certificate statement is narrower than a finding about operating legality or a completed transfer of title.

Reported net fixed assets / 2013 / consolidated

RMB 9,591,453,422.83

Reported forming bushings book value / 2013 / metal forming bushings

RMB 5,607,740,229.4

Reported cip transfer / 2013 / fixed assets

RMB 1,257,437,189.86

Reported finance leased assets net / 2013 / consolidated

RMB 338,223,473.42

Profit attributable to listed-company shareholders was CNY 319,128,114.98, while profit excluding nonrecurring items was CNY 130,691,336.71. The difference was CNY 188,436,778.27 of attributable nonrecurring items. The annual summary reports total attributable profit growth of 16.39% but a 34.88% decline in profit excluding nonrecurring items. The detailed nonrecurring schedule reports CNY 73,703,114.03 from noncurrent-asset disposals, CNY 131,565,408.92 of qualifying government grants and CNY 7,667,557.65 of other nonoperating income and expense, before tax and ownership attribution. Consolidated investment income of CNY 67,929,667.03 includes a CNY 26,461,233.39 gain on remeasurement of a previously held interest when control of Jianshi Juhong was obtained. That remeasurement gain is not cash received from a sale. These distinctions explain why growth in reported shareholder profit cannot alone establish stronger recurring glass-fiber operations. The source definitions of nonrecurring items are retained; they are not presented as an independent estimate of sustainable earnings.

Reported attributable profit / 2013 / listed company shareholders

RMB 319,128,114.98

Reported profit ex nonrecurring / 2013 / listed company shareholders

RMB 130,691,336.71

Reported nonrecurring profit / 2013 / listed company shareholders

RMB 188,436,778.27

Consolidated investment income or loss / 2013 / consolidated

RMB 67,929,667.03

Reported remeasurement gain / 2013 / jianshi juhong control acquisition

RMB 26,461,233.39

The income note recognizes CNY 136,585,408.92 of government grants during FY2013; the cash-receipts note separately reports the same amount received. The nonrecurring-items schedule includes CNY 131,565,408.92, a narrower measure than total recognized grants. Material named items include a CNY 40,000,000 industrial-upgrade grant and a CNY 20,000,000 capital-contribution reward for Panding, a CNY 12,000,000 headquarters-relocation reward, CNY 11,000,000 of financing-cost compensation and a CNY 10,000,000 research-institute grant. These disclosed purposes help explain support for industrial development and financing; they are not evidence of completed technological commercialization or a customer contract. A separate waste-utilization grant received in 2012 was deferred: CNY 463,439.24 was released to income in FY2013 and CNY 6,536,560.76 remained deferred at year end. That release is not another FY2013 grant receipt. Grant recognition, cash receipt and the nonrecurring classification therefore remain separately dated and scoped.

Reported government grants / 2013 / recognized in income

RMB 136,585,408.92

Reported government grants / 2013 / cash receipts

RMB 136,585,408.92

Reported government grants / 2013 / nonrecurring schedule

RMB 131,565,408.92

Reported deferred grant release / 2013 / waste utilization

RMB 463,439.24

Reported deferred grant balance / 2013 / waste utilization

RMB 6,536,560.76

Consolidated year-end bill receivables totaled CNY 880,002,747.13, comprising CNY 841,333,052.19 of bank-acceptance bills and CNY 38,669,694.94 of commercial-acceptance bills. The reported balance rose 39.94% from the beginning of the year. Management attributes the increase to more customers choosing bank-acceptance bills to settle purchases. This is settlement-instrument exposure alongside the separate trade-receivable balance. Bills held at year end are not cash already collected, annual revenue or new sales to add to the income statement. The table does not establish their individual maturity schedules or later payment. Its narrow statement about no bill balances from shareholders holding at least 5% does not erase other related-party settlement categories.

Reported bill receivables / 2013 / consolidated total

RMB 880,002,747.13

Reported bill receivables / 2013 / consolidated bank acceptance

RMB 841,333,052.19

Reported bill receivables / 2013 / consolidated commercial acceptance

RMB 38,669,694.94

Consolidated prepayments were CNY 288,406,497.01 before CNY 392,807.22 of allowances. The five largest named balances totaled CNY 78,830,774.60. Their stated unsettled reason was that delivery had not yet occurred under the agreements; the list includes refractory materials, construction, calcium materials, textile machinery and equipment installation suppliers. This identifies funds committed ahead of delivery rather than inventory already received or proof of a cancelled project. The note separately records CNY 8,882,140.58 of prepayment write-offs during FY2013 because the amounts could not be recovered. Annual write-offs and the closing allowance are different measures. The disclosed supplier balances are not assigned to individual furnaces without a source link, and the table does not establish later refunds or delivery completion.

Reported supplier prepayments / 2013 / consolidated gross

RMB 288,406,497.01

Reported supplier prepayments allowance / 2013 / consolidated closing

RMB 392,807.22

Reported supplier prepayments writeoffs / 2013 / consolidated annual

RMB 8,882,140.58

The consolidated other-receivable note reports CNY 103,857,012.59 gross and CNY 6,443,373.80 of allowances. The five largest balances totaled CNY 39,270,433.75, or 37.81% of the gross category. They include CNY 24,000,000 associated with CMB Financial Leasing and CNY 6,000,000 with BOCOM Financial Leasing, alongside a CNY 5,942,858.75 export-tax claim. The lease explanation separately identifies the CMB amount as a deposit. These items differ from fiber-customer trade invoices, and a tax receivable is not a cash refund already received. The note also records CNY 12,818,420.37 of annual other-receivable write-offs. Gross balances, allowances, deposits and write-offs remain distinct; the source does not support treating every claim as freely available liquidity or assuming subsequent recovery.

Reported other receivables / 2013 / consolidated gross

RMB 103,857,012.59

Reported other-receivable allowance / 2013 / consolidated closing

RMB 6,443,373.8

Reported other receivables writeoffs / 2013 / consolidated annual

RMB 12,818,420.37

At year end, consolidated trade payables were CNY 773,202,306.76, customer advances CNY 127,864,626.22 and other payables CNY 114,649,443.37. Bank-acceptance bills payable were CNY 89,951,426.07, with that amount due in the next accounting period. These balances explain operating settlement and funding obligations alongside borrowing, rather than another measure of bank-loan principal. The note identifies CNY 176,269,336.64 of large trade payables older than one year and CNY 37,459,899.95 of large other payables older than one year, saying their contractual payment dates had not yet arrived. Age alone therefore does not establish default. Large customer advances older than one year were CNY 4,667,226.19 for goods not yet dispatched, rather than sales already recognized. Named large other payables include equity-transfer consideration, electricity, natural gas and freight, so the category is not entirely unpaid production inputs. Accrued interest payable was CNY 52,814,572.76; this closing liability differs from annual interest expense and cash interest paid. The related-party subsets described separately are included within their categories and cannot be added again.

Reported trade payables / 2013 / consolidated closing

RMB 773,202,306.76

Customer advances in contract liabilities / 2013 / consolidated closing

RMB 127,864,626.22

Reported other payables / 2013 / consolidated closing

RMB 114,649,443.37

Bills payable / 2013 / consolidated closing

RMB 89,951,426.07

Reported aged trade payables / 2013 / consolidated over one year large not yet due

RMB 176,269,336.64

Reported aged other payables / 2013 / consolidated over one year large not yet due

RMB 37,459,899.95

Reported aged customer advances / 2013 / consolidated over one year large undispatched

RMB 4,667,226.19

Reported interest payable / 2013 / consolidated closing

RMB 52,814,572.76

The consolidated employee-compensation liability schedule records CNY 512,711,561.19 of additions during FY2013 and CNY 518,190,491.22 of payments, leaving CNY 12,735,774.96 payable at year end. Additions and payments are different measures: the movement also uses the opening liability, and neither amount is the closing debt to employees. The schedule includes wages and bonuses, welfare, social insurance, housing contributions, union and education funds, and termination compensation. It does not allocate the full amount to glass-fiber production, each factory or research activity. The company says no amounts in this category were overdue and reports the closing wage, bonus and allowance portion was paid in January 2014. This historical assertion is not a general finding about all labor conditions. The operating workforce explanation separately describes production and technical staffing; training activity counts are not used as evidence of measured productivity improvement.

Reported employee compensation additions / 2013 / consolidated liability movement

RMB 512,711,561.19

Reported employee compensation payments / 2013 / consolidated liability movement

RMB 518,190,491.22

Reported employee compensation payable / 2013 / consolidated closing

RMB 12,735,774.96

Consolidated selling expense was CNY 173,195,284.28 in FY2013, compared with CNY 174,633,902.79 a year earlier. Freight was its largest disclosed component at CNY 131,443,408.93, compared with CNY 133,477,126.10. This is expense recognized for distribution, distinct from the annual related-logistics transaction amounts and the cost of glass-fiber products. Management expense totaled CNY 505,129,816.92, compared with CNY 485,659,782.96. Its separate staff-compensation and technical-development lines provide overhead context; the already explained research-expenditure figure is not added again as an additional expense. Management attributes lower selling expense to reduced freight and travel costs, and higher management expense to staff compensation and intangible-asset amortization. These cost categories help explain why a product gross margin is not the same as operating profit. The notes do not establish how freight or overhead was allocated among individual grades, markets or factories, and routine travel, meeting and promotional sublines need no separate operating narrative.

Reported selling expense / 2013 / consolidated annual

RMB 173,195,284.28

Reported distribution freight expense / 2013 / consolidated annual

RMB 131,443,408.93

Reported management expense / 2013 / consolidated annual

RMB 505,129,816.92