China Jushi FY2013: Debt and related-party balances

The consolidated cash-flow statement reports borrowing proceeds of CNY 11,994,619,300.63 and repayments of CNY 12,397,036,924.64. These gross flows describe financing turnover, rather than the amount of new year-end debt. Bond proceeds were CNY 1,400,000,000. Cash paid for fixed assets, intangible assets and other long-term assets was CNY 1,314,847,449.34, while cash paid to acquire minority interests was CNY 248,269,610.20. The latter is an ownership transaction and must not be relabeled as factory construction expenditure. Net investing cash flow was negative CNY 1,507,418,255.54 and net financing cash flow positive CNY 270,867,510.96. The statement separately reports a negative CNY 130,197,862.03 exchange-rate effect on cash; this differs from an income-statement foreign-exchange gain or loss. The combined cash-flow movements reconcile to the increase in cash. The other financing-receipts note identifies sale-and-leaseback proceeds of CNY 120,503,728.37, which represent funding against existing production assets rather than sales of glass-fiber products.

Reported borrowing proceeds / 2013 / consolidated

RMB 11,994,619,300.63

Reported borrowing repayments / 2013 / consolidated

RMB 12,397,036,924.64

Reported capital expenditure cash / 2013 / long term assets

RMB 1,314,847,449.34

Reported minority purchase cash / 2013 / consolidated

RMB 248,269,610.2

Reported sale leaseback cash / 2013 / consolidated

RMB 120,503,728.37

The lease note describes two sale-and-leaseback arrangements covering furnace equipment or glass-fiber production equipment. Jushi Group transferred equipment valued at CNY 400,189,851.46 to CMB Financial Leasing and leased it back for three years; the contract includes a CNY 24,000,000 deposit and a guarantee from Jushi Group Chengdu. Chengdu transferred assets valued at CNY 125,645,400 to BOCOM Financial Leasing, with total rent of CNY 143,161,216.75 over 60 months and a guarantee from Jushi Group. In both arrangements the report states that the equipment remained with the manufacturing company and was not physically delivered to the lessor. They therefore do not show a factory shutting down or transferring production to a customer. The lease maturity table gives minimum future payments of CNY 305,464,126.96, including CNY 148,155,355.44 within one year. Unrecognized financing charges were CNY 28,416,073.19. Subtracting those charges gives CNY 277,048,053.77, which reconciles to current lease obligations of CNY 130,415,515.23 plus noncurrent finance-lease obligations of CNY 146,632,538.54. The broader long-term-payables total includes other arrangements and is not all lease debt.

Reported lease minimum payments / 2013 / finance leases

RMB 305,464,126.96

Reported lease minimum payments / 2013 / finance leases within one year

RMB 148,155,355.44

Reported unrecognized lease finance / 2013 / finance leases

RMB 28,416,073.19

Reported finance lease obligations / 2013 / current

RMB 130,415,515.23

Reported finance lease obligations / 2013 / noncurrent

RMB 146,632,538.54

The financial note says this capital-intensive producer relies on loans for working and operating capital. At year end, consolidated short-term borrowings were CNY 5,849,998,644, long-term borrowings excluding the current portion were CNY 4,674,119,534.50 and long-term borrowings due within one year were CNY 606,708,000.82. The aggregate current portion of noncurrent liabilities was CNY 737,123,516.05, including the finance-lease obligations already explained separately; it is not all additional bank borrowing. Jushi Group issued two unsecured 365-day commercial-paper tranches of CNY 700,000,000 each on January 22 and November 14,2013, at stated coupon rates of 4.86% and 6.03%. Their CNY 1,437,953,999.99 closing carrying balance is a different measure from the combined issued principal. The listed parent's 2012 seven-year corporate bond had CNY 1,200,000,000 face value and CNY 1,190,990,081.86 closing carrying value; the report says no new corporate bond was issued during 2013. This does not mean there was no subsidiary commercial-paper financing. Noncurrent long-term payables were CNY 229,462,147.27, including CNY 146,632,538.54 of finance-lease obligations, which are part of that amount rather than another liability to add again. Current and noncurrent leases, gross annual borrowing turnover, guarantee exposures and debt carrying balances retain their separate perimeters. The passages disclose balances and terms, not proof that future refinancing or repayment had already succeeded.

Borrowing carrying amount / 2013 / consolidated short term

RMB 5,849,998,644

Borrowing carrying amount / 2013 / consolidated noncurrent long term

RMB 4,674,119,534.5

Borrowing carrying amount / 2013 / consolidated current long term

RMB 606,708,000.82

Reported current noncurrent liabilities / 2013 / consolidated current portions

RMB 737,123,516.05

Reported commercial paper carrying balance / 2013 / jushi group short term paper

RMB 1,437,953,999.99

Reported commercial paper coupon / 2013 / jushi group january2013 tranche

4.86 percent

Reported commercial paper coupon / 2013 / jushi group november2013 tranche

6.03 percent

Reported bond face value / 2013 / listed parent 2012 bond

RMB 1,200,000,000

Reported bond carrying balance / 2013 / listed parent 2012 bond

RMB 1,190,990,081.86

Reported long term payables / 2013 / consolidated noncurrent

RMB 229,462,147.27

The restricted-asset note records CNY 4,647,566,203.07 of closing assets used to secure the company's debt. It includes CNY 4,286,849,594.37 of fixed assets, CNY 12,769,030.03 of receivables CNY 49,411,989.78 of intangible assets and CNY 78,818,325.58 of construction in progress, alongside the restricted cash already explained in the cash section. The original table has an empty closing cell for bills receivable. The printed aggregate reconciles to the five categories with reported closing amounts, but these blank cells are not stored as reported zeros. The aggregate is a collateral book-value measure, not a second debt principal amount or freely available cash. Assets recorded as owned and used in production can still be pledged or otherwise restricted; the note does not establish a realized foreclosure or assign each collateral item to a separately verified factory address.

Reported restricted asset balance / 2013 / consolidated total

RMB 4,647,566,203.07

Reported restricted asset balance / 2013 / fixed assets

RMB 4,286,849,594.37

Reported restricted asset balance / 2013 / receivables

RMB 12,769,030.03

Reported restricted asset balance / 2013 / intangible assets

RMB 49,411,989.78

Reported restricted asset balance / 2013 / construction in progress

RMB 78,818,325.58

The consolidated goodwill balance was CNY 472,512,501.24 at both the beginning and end of FY2013. The two largest named components were CNY 176,839,725.90 for Tongxiang Jinshi Precious Metal Equipment and CNY 189,612,641.95 for Tongxiang Leishi Micro Powder, businesses discussed separately in the minority-interest purchase and acquisition-commitment explanations. The note describes acquisition consideration above assessed fair value as the origin of these balances. It says goodwill was allocated to related asset groups and impairment testing identified no impairment. That is the issuer's historical accounting conclusion, rather than proof that future recoverability is assured; unchanged goodwill also does not measure FY2013 acquisition cash paid. The intangible-asset note separately reports CNY 109,374,560.90 of mining rights and says they were not yet being mined, so no amortization was recorded in the period. Rights on the balance sheet do not establish mine output, and the aggregate is not assigned entirely to the Jianshi Juhong acquisition. These accounting balances help explain the assets supporting the group, while remaining distinct from furnace capacity, sales and operating cash.

Reported goodwill balance / 2013 / consolidated total

RMB 472,512,501.24

Reported goodwill balance / 2013 / tongxiang jinshi

RMB 176,839,725.9

Reported goodwill balance / 2013 / tongxiang leishi

RMB 189,612,641.95

Reported mining rights balance / 2013 / consolidated intangible rights

RMB 109,374,560.9

The year-end consolidated deferred-tax asset balance was CNY 24,107,447.56, compared with CNY 27,515,406.02 at the start of the year. Its closing components include receivables, inventory, fixed assets, construction in progress and CNY 8,343,801.46 associated with deductible operating losses. The long-term-equity-investment amount in this asset table appears in the opening column only; the closing cell is blank and is not recorded as a reported zero. Deferred-tax liabilities totaled CNY 42,713,505.57 at year end, compared with CNY 16,427,284.08 initially, and included CNY 31,224,217.10 associated with intangible assets as well as fixed-asset and long-term-investment items. These are recognized accounting tax balances, not cash tax refunds received or the gross amount of tax losses available for use. The note does not provide a site-by-site forecast of taxable earnings or a common tax rate to apply to every asset. Asset and liability components therefore retain their respective accounting perimeters rather than being treated as immediately available financing.

Deferred-tax assets before offset / 2013 / consolidated closing

RMB 24,107,447.56

Deferred-tax assets before offset / 2013 / recognized operating loss component

RMB 8,343,801.46

Deferred-tax liabilities before offset / 2013 / consolidated closing

RMB 42,713,505.57

Deferred-tax liabilities before offset / 2013 / intangible asset component

RMB 31,224,217.1

The unrecognized-deferred-tax-asset schedule lists CNY 451,102,104.61 of underlying deductible items at year end, of which CNY 428,387,960.48 was deductible operating losses. These underlying amounts are not recognized deferred-tax assets or guaranteed cash recoveries. The expiry schedule allocates that same closing loss balance to CNY 12,623,836.45 expiring in 2014, CNY 60,695,020.87 in 2015, CNY 66,981,893.82 in 2016, CNY 134,446,927.46 in 2017 and CNY 153,640,281.88 in 2018. The five amounts reconcile to the loss total. The dates describe the remaining use periods as disclosed at December 31, 2013; they are not losses forecast to arise in those future years or current tax advice. The note does not establish that enough taxable income would arise in the relevant entities before expiry. Applying a single assumed tax rate to the total would not demonstrate recognition or realization. This explains a limit on potential tax benefits alongside the separate recognized loss-related tax asset.

Reported unrecognized tax basis / 2013 / consolidated total deductible items

RMB 451,102,104.61

Reported unrecognized tax basis / 2013 / operating losses

RMB 428,387,960.48

Reported tax loss expiry / 2013 / closing loss balance expires2014

RMB 12,623,836.45

Reported tax loss expiry / 2013 / closing loss balance expires2015

RMB 60,695,020.87

Reported tax loss expiry / 2013 / closing loss balance expires2016

RMB 66,981,893.82

Reported tax loss expiry / 2013 / closing loss balance expires2017

RMB 134,446,927.46

Reported tax loss expiry / 2013 / closing loss balance expires2018

RMB 153,640,281.88

Consolidated income-tax expense was CNY 109,157,300.48, comprising CNY 105,005,145.76 of current tax and CNY 4,152,154.72 of deferred tax. This expense is not the amount of cash tax paid. The reconciliation starts with CNY 442,775,477.66 of accounting profit before tax and CNY 110,693,869.41 of tax at the stated base rate; those numbers correspond to 25% after rounding. It separately shows a CNY 54,491,443.59 reduction associated with subsidiaries using different rates and a CNY 47,806,836.84 increase from unrecognized deductible temporary differences and losses. Other disclosed reconciling items complete the bridge to the reported expense. Thus a single rate on consolidated profit does not describe the group's actual charge, and loss-related effects can offset preferential-rate benefits. The additional-deduction amount appears only in the prior-period column, while the current-period cell is blank. These are the report's FY2013 accounting explanations, not an assertion that the same rates, eligibility or losses apply today or to every production location.

Reported consolidated income-tax expense / 2013 / consolidated total

RMB 109,157,300.48

Reported consolidated income-tax expense / 2013 / consolidated current tax

RMB 105,005,145.76

Reported consolidated income-tax expense / 2013 / consolidated deferred tax

RMB 4,152,154.72

Reported profit before tax / 2013 / consolidated

RMB 442,775,477.66

Reported tax reconciliation adjustment / 2013 / subsidiary different rate effect

RMB -54,491,443.59

Reported tax reconciliation adjustment / 2013 / unrecognized deductible differences and losses

RMB 47,806,836.84

The consolidated nonoperating-expense note reports CNY 4,528,008.03 of expense, compared with CNY 2,164,427.16 a year earlier. Management mainly attributes the increase to scrapping old production equipment during cold-repair upgrades of several lines. Within the expense table, the fine-expense category is CNY 243,340.24, and a separate combined compensation, contractual-penalty and fine category is CNY 333,391.18. The latter is not identified entirely as a regulatory fine. The note does not provide the individual cases, affected plants or a bridge from these categories to a specific governance sanction or operating suspension. These amounts therefore cannot be used to invent an environmental breach or to assert that every group entity had no penalty. Equipment-disposal and scrapping costs are also distinct from the cash invested in refurbishment and the capacity achieved by the upgraded lines. The source expense categories are retained to bound profit quality and compliance interpretation; routine donation and miscellaneous lines need not each become a reader section.

Reported nonoperating expense / 2013 / consolidated total

RMB 4,528,008.03

Reported nonoperating expense / 2013 / fine expense category

RMB 243,340.24

Reported nonoperating expense / 2013 / compensation contractual penalty and fine category

RMB 333,391.18

Year-end related-party trade receivables were CNY 68,836,225.50 before CNY 705,103.40 of allowances. Large named gross balances included CNY 40,027,098.05 from Lianyungang Zhongfu Lianzhong and CNY 26,477,065.78 from CNBM Group Import and Export. These are closing claims, not those customers' annual purchases. Related prepayments were CNY 3,801,857.44, including equipment and freight items. Other related receivables totaled CNY 1,050,000 with CNY 546,000 of allowances and were listed separately from trade receivables. The Shenzhen cement-company other-receivable amount appears only in the opening column; its empty closing cell is not recorded as a reported zero or carried forward into year-end exposure. On the liability side, related trade payables were CNY 8,400,090.39, advances received were CNY 5,965,443.70 and other payables were CNY 3,668,307.18. These categories retain their gross scopes and are not all netted into one related-party loan or added to annual sales and purchases. The table documents settlement exposure, while supplying no guarantee that each balance was collected or paid after year end.

Reported related receivables / 2013 / trade gross

RMB 68,836,225.5

Reported related receivables allowance / 2013 / trade

RMB 705,103.4

Related-party supplier prepayments / 2013 / consolidated closing

RMB 3,801,857.44

Reported related receivables / 2013 / other gross

RMB 1,050,000

Reported related receivables allowance / 2013 / other

RMB 546,000

Reported related payables / 2013 / trade

RMB 8,400,090.39

Reported related payables / 2013 / advances received

RMB 5,965,443.7

Reported related payables / 2013 / other

RMB 3,668,307.18

Jushi Group recognized CNY 1,045,560 of annual rental income from buildings leased to Zhenshi Hotel and Zhenshi Holding Group. The separate tenant-side table reports CNY 7,602,147.40 of annual rental charges: the listed parent rented buildings from Hengshi Fiber, Zhejiang Yushi Logistics and Zhejiang Meishi New Materials, while Tongxiang Jinshi rented from Zhenshi Holding. The named lessor, lessee and annual recognition perimeter matters; rental income and rental charges are not interchangeable or automatically net cash payments. These property arrangements describe related-party use of premises, rather than a verified factory street address or the sale-and-leaseback financing obligations already explained elsewhere. The source reports a market-price basis but does not establish an independently assessed market rent or a post-expiry renewal.

Reported related rent / 2013 / jushi group lessor income

RMB 1,045,560

Reported related rent / 2013 / parent and jinshi tenant charges

RMB 7,602,147.4

The related-party guarantee table identifies Zhenshi Holding as guarantor and Jushi Group as beneficiary. It lists USD 31,000,000 and USD 12,600,000 guarantee amounts for two historical lending arrangements, neither marked fully performed at year end. Under the first arrangement, the note describes a maximum guarantee over the 2011-to-2016 lending period and reports USD 17,400,000 of outstanding borrowing at December 31, 2013, including USD 6,800,000 due within one year. Under the second arrangement, it reports USD 2,520,000 of outstanding borrowing. The source's numeral for the second loan's current repayment is malformed, so that repayment split is retained as unresolved rather than silently repaired. Guarantee limits, outstanding loans and current maturities are different measures; they are not added together as fresh borrowing or converted into renminbi at an assumed rate. This is credit support received from a related shareholder, distinct from the company's separately disclosed guarantees for its own subsidiaries. The disclosed support does not establish that actual repayment had occurred.

Reported guarantee received / 2013 / zhenshi first contract limit

31,000,000 USD

Reported guarantee received / 2013 / zhenshi second contract amount

12,600,000 USD

Reported guaranteed borrowing / 2013 / zhenshi first contract outstanding

17,400,000 USD

Reported guaranteed borrowing / 2013 / zhenshi first contract current portion

6,800,000 USD

Reported guaranteed borrowing / 2013 / zhenshi second contract outstanding

2,520,000 USD

The tax notes identify several manufacturing entities using a 15% income-tax rate in FY2013. Jushi Group retained high-technology status for a tax-preference period ending December 31, 2013. Jushi Group Jiujiang received renewed recognition valid from July 8, 2013 through July 7, 2016. Chengdu used the disclosed western-region encouraged-industry basis, while Panding used high-technology recognition. These named rates help explain the subsidiary-rate adjustment in the consolidated tax reconciliation; they do not establish one rate for every group company. A separate Jiujiang arrangement provided a refund of 50% of the locally retained portion of its income tax for 2009 through 2013, rather than 50% of all tax or profit. The passage does not quantify an actual FY2013 refund under that arrangement. Overseas entities paid under their registration jurisdictions. The eligibility and dates are historical disclosures; renewal after the stated periods is not established here.

FY2013 consolidated finance expense was CNY 659,060,034.04. Its components were CNY 676,429,881.74 of interest expense, less CNY 25,285,873.23 of interest income, a negative CNY 18,515,772.65 exchange-loss line and CNY 26,431,798.18 of other charges. The negative exchange line reduces this expense total. Separately, CNY 64,633,090.91 of borrowing costs was capitalized at a disclosed rate of 6.38% to 6.43%. Under the filing's policy, qualifying borrowing costs enter the related asset cost; other borrowing costs enter current profit or loss. Capitalized costs therefore differ from the interest-expense line and from cash interest paid. They are not allocated here to a particular construction project. The cash-flow statement's separate exchange effect on cash is a different measure. The foreign-currency schedule reports closing financial assets of CNY 674,905,815.11 and liabilities of CNY 2,390,604,061.72 in the renminbi reporting context; these are not original US-dollar amounts or a complete net currency-risk calculation.

Consolidated net finance expense / 2013 / consolidated annual

RMB 659,060,034.04

Reported interest expense / 2013 / consolidated annual

RMB 676,429,881.74

Reported interest income / 2013 / consolidated annual

RMB 25,285,873.23

Reported exchange loss / 2013 / consolidated profit loss

RMB -18,515,772.65

Reported capitalized borrowing cost / 2013 / consolidated annual

RMB 64,633,090.91

Reported foreign currency financial assets / 2013 / consolidated closing reporting currency

RMB 674,905,815.11

Reported foreign currency financial liabilities / 2013 / consolidated closing reporting currency

RMB 2,390,604,061.72

The consolidated long-term-investment schedule lists CNY 89,430,949.70 before a separate CNY 13,140,539.02 impairment allowance. Named balances include CNY 59,425,200.77 for Nanjing Huafu and CNY 16,269,972.24 for Luoyang Xinjingrun Engineering Glass. Luoyang's own total net loss was CNY 8,350,871.31; the group's equity-method loss from that investment was CNY 3,941,611.26. The investee's whole-company result is not the same as the shareholder's accounting share or investment carrying value. Total equity-method investment losses were CNY 5,099,933.86, within the separately explained consolidated investment-income total. The Yantai Bohai Chemical Building Materials investment had CNY 12,327,935.72 of recorded investment and the same amount of impairment. The schedule also reflects Jianshi Juhong becoming a subsidiary and the Shenzhen cement investment being disposed of, transactions explained in their dated control and disposal records. Investment book values do not establish new fiber-production capacity or cash distributions.

Reported long term investments / 2013 / consolidated before allowance

RMB 89,430,949.7

Reported long term investments allowance / 2013 / consolidated closing

RMB 13,140,539.02

Consolidated equity-method investment income / 2013 / consolidated annual

RMB -5,099,933.86

The parent-only investment schedule reports CNY 7,821,605,071.93 before the separately disclosed impairment allowance. Its largest component is the CNY 7,661,620,009.39 cost-method investment in wholly owned Jushi Group. This represents the parent's investment account, rather than an additional factory asset to add to consolidated property and equipment. Parent-only other receivables were CNY 104,405,598.77 gross with CNY 2,542,970.27 of allowances. Of the gross amount, CNY 101,616,802.84 was due from Jushi Group and Beixin Technology Development, or 97.33%. These subsidiary claims are a different perimeter from the consolidated related-party settlement table. Parent operating cash flow was CNY 93,319,407.37 and closing cash CNY 189,104,081.98. The existing dividend explanation records Jushi Group's distribution to the parent separately from consolidated outside earnings and dividends to listed-company shareholders. Reading these scopes together avoids counting internal investments, claims and distributions again as additional group operating resources.

Reported long term investments / 2013 / listed parent before allowance

RMB 7,821,605,071.93

Reported other receivables / 2013 / listed parent gross

RMB 104,405,598.77

Reported other-receivable allowance / 2013 / listed parent closing

RMB 2,542,970.27

Reported subsidiary receivables / 2013 / listed parent closing

RMB 101,616,802.84

Reported operating cash flow / 2013 / listed parent annual

RMB 93,319,407.37

Reported monetary-funds balance / 2013 / listed parent closing

RMB 189,104,081.98

The intangible-asset schedule reports a consolidated net book value of CNY 397,373,581.23. It includes CNY 241,983,168.82 of land-use rights, CNY 10,054,679.97 of patented technology and CNY 14,132,223.74 of nonpatented technology. Land-use rights are accounted for separately from factory buildings and equipment. Technology book values do not quantify product performance, granted product certifications or sales from a particular new grade. The separate mining-rights balance and its not-yet-mined status are explained in the asset-recoverability section. These figures describe the accounting assets supporting operations, without establishing independently verified street locations, additional line capacity or current market values.

Reported intangible assets / 2013 / consolidated net

RMB 397,373,581.23

Reported land use rights / 2013 / consolidated net

RMB 241,983,168.82

Reported technology rights / 2013 / consolidated patented net

RMB 10,054,679.97

Reported technology rights / 2013 / consolidated nonpatented net

RMB 14,132,223.74

The shareholder-meeting record approved Jushi Group's proposed USD 66,000,000 contribution to Panding, alongside the electronic-grade glass-fiber fabric expansion. It also approved a CNY 240,000,000 contribution to Jushi Group Chengdu and the 50,000-tonne line upgrade, and a USD 60,000,000 contribution to Jushi Group Hong Kong alongside the remaining-interest purchases in Jinshi and Leishi. These are distinct subsidiary-funding decisions in different currencies. Approval establishes a governance step, without proving that each full amount had been paid by year end. Contributions are not added again to project budgets, construction balances or acquisition cash flow. The existing project records retain metres for electronic fabric, tonnes for the Chengdu design scale, and their separate construction or trial-production stages. The existing ownership records explain the completed minority-interest purchases. No exchange rate or allocation of each approved contribution among specific cash uses is inferred.

Approved subsidiary capital contribution / 2013 / jushi group to panding approved

66,000,000 USD

Approved subsidiary capital contribution / 2013 / jushi group to chengdu approved

RMB 240,000,000

Approved subsidiary capital contribution / 2013 / jushi group to hong kong approved

60,000,000 USD