China Jushi FY2015: Cash generation and working capital

Operating cash flow was positive CNY 2,429,601,488.84, investing cash flow negative CNY 2,392,894,467.26 and financing cash flow positive CNY 1,866,578,209.07. Management links the operating increase to more cash received from goods sales, investing changes to treasury management of temporarily idle equity proceeds and financing changes to newly raised equity capital. These are net category flows, not construction payments for each named project. Net fixed assets ended at CNY 11,635,731,992.14 and construction in progress at CNY 1,726,806,137.51. The business overview attributes the fixed-asset decline partly to the transfer of the Tongxiang 360,000-tonne programme phase-I cold repair into construction in progress, while the management discussion explains the decline in the fixed-asset share of total assets through the larger asset denominator after fundraising. A fall in the amount and a fall in the asset ratio are separate comparisons. Egypt phase-II construction and Tongxiang refurbishment contributed to the increase in construction in progress. An accounting transfer does not establish a new cash payment, added operating capacity or the physical completion of a furnace. Overseas assets of CNY 4,403,250,066.15 represented 18.28% of assets, a stock of assets rather than overseas sales or unrestricted cash.

Net cash from operating activities / 2015 / consolidated

RMB 2,429,601,488.84

Net cash from investing activities / 2015 / consolidated

RMB -2,392,894,467.26

Net cash from financing activities / 2015 / consolidated

RMB 1,866,578,209.07

Net fixed assets / 2015 / consolidated

RMB 11,635,731,992.14

Consolidated construction in progress / 2015 / consolidated

RMB 1,726,806,137.51

Overseas assets / 2015 / consolidated

RMB 4,403,250,066.15

The entrusted-investment table lists four principal-protected bank products funded with temporarily idle placement proceeds. The Bank of China and China Construction Bank Tongxiang branch products each had a 5.00 hundred-million CNY principal and dates of 30 December 2015 to 30 December 2016. The China CITIC Bank Jiaxing Tongxiang branch product was 3.00 hundred-million CNY from 29 December 2015 to 29 December 2016; the Agricultural Bank of China Tongxiang branch product was 2.00 hundred-million CNY from 29 December 2015 to 28 December 2016. The total was 15.00 hundred-million CNY, equivalent to CNY 1.5 billion. These product principals and contractual dates are not additional sales or evidence that all proceeds remained freely available as cash. The actual recovered-principal, realized-return and impairment columns are blank; blanks are not zero yields or completed repayment. A separate overdue principal-and-return line explicitly reports zero. The principal-protected label and approval description are issuer disclosures, not an independent guarantee of future performance. The four-product list is kept separate from later reports’ differently dated placements.

Reported treasury product principal / 2015 / boc 20151230 20161230

RMB 500,000,000

Reported treasury product principal / 2015 / ccb 20151230 20161230

RMB 500,000,000

Reported treasury product principal / 2015 / citic 20151229 20161229

RMB 300,000,000

Reported treasury product principal / 2015 / abc 20151229 20161228

RMB 200,000,000

Reported treasury product principal / 2015 / four product total

RMB 1,500,000,000

The monetary-fund note reports CNY 3,290,275,794.34 at year end and CNY 436,490,494.30 subject to restrictions. Their difference is exactly the CNY 2,853,785,300.04 closing cash and cash-equivalents balance in the cash-flow statement. The restricted-assets table identifies pledges, deposits and litigation preservation as reasons. This is an availability boundary, not a cash loss. The CNY 433,735,165.27 held abroad is a location measure, not automatically another restricted amount. Available cash comprises CNY 92,058.91 cash on hand, CNY 2,851,202,106.66 bank deposits available for payment and CNY 2,491,134.47 other monetary funds available for payment. The separate financial-instrument classification table prints monetary funds of CNY 3,290,407,337.84, CNY 131,543.50 above the note. Both values were checked on original tables; the report provides no reconciliation here. The discrepancy remains explicit and must not be silently corrected or used to redefine available cash.

Restricted monetary funds / 2015 / consolidated

RMB 436,490,494.3

Monetary funds held abroad / 2015 / consolidated

RMB 433,735,165.27

Available bank deposits / 2015 / cash flow cash composition

RMB 2,851,202,106.66

Available other monetary funds / 2015 / cash flow cash composition

RMB 2,491,134.47

Consolidated monetary funds / 2015 / financial instrument table as printed

RMB 3,290,407,337.84

The audited statements cover the consolidated group and the listed parent under Chinese Accounting Standards for 2015. The financial auditor signed the report on 16 March 2016 and stated that the accounts present fairly, in all material respects, the financial position, results and cash flows under that framework. This opinion concerns the financial statements; it is not approval of this English research page. Consolidated operating profit was CNY 1,138,027,964.04, pretax profit CNY 1,181,093,236.06 and net profit CNY 986,531,563.69, including CNY 3,484,462.04 attributable to minority interests. The CNY 983,047,101.65 attributable to owners and the parent’s CNY 1,019,741,181.90 net profit are different reporting populations. Parent subsidiary investment income must not be added to consolidated profit. The report’s 2015 accounting policies are historical policies, rather than a description of current standards.

Reported operating profit / 2015 / consolidated

RMB 1,138,027,964.04

Consolidated pretax profit / 2015 / consolidated

RMB 1,181,093,236.06

Consolidated net profit / 2015 / consolidated

RMB 986,531,563.69

Profit attributable to minority owners / 2015 / consolidated

RMB 3,484,462.04

Consolidated trade receivables had gross value of CNY 1,866,966,743.95, an allowance of CNY 106,305,656.54 and net value of CNY 1,760,661,087.41 at year end. The allowance rolls forward from CNY 77,045,717.30, adding CNY 34,278,135.17 charged during the year and deducting CNY 5,018,195.93 written off. The named important write-offs form a subset of the total, not a second charge. Top-five closing receivables total CNY 164,931,741.87, or 8.83% of gross receivables, with provisions of CNY 23,371,453.94. This closing-balance concentration differs from the separately reported annual top-five customer sales. The parent receivable table also has a different population. In particular, Feicheng Sanying Fiber Industry in the consolidated list and Feicheng Lianyi Engineering Plastics in the parent list are different disclosed names; their common city does not establish identity. The issuer’s historical aging and individual-assessment policy does not guarantee collection and must not be relabeled as a modern expected-credit-loss model.

Trade receivables before allowance / 2015 / consolidated

RMB 1,866,966,743.95

Trade receivable expected-credit-loss allowance / 2015 / consolidated

RMB 106,305,656.54

Trade receivables after allowance / 2015 / consolidated

RMB 1,760,661,087.41

Trade receivable allowance charge / 2015 / consolidated

RMB 34,278,135.17

Actual trade receivable write-offs / 2015 / consolidated

RMB 5,018,195.93

Top-five closing trade receivables / 2015 / consolidated top five closing

RMB 164,931,741.87

The tax note sets out entity-specific historical tax treatment, including 15% concessions alongside the standard 25% rate; it does not imply that every group company used one rate. Income-tax expense was CNY 194,561,672.37, comprising current tax of CNY 189,288,539.28 and deferred tax of CNY 5,273,133.09. Deductible losses of CNY 510,162,568.81 were disclosed without recognition of a deferred-tax asset, rather than as cash available for recovery. Government grants recognized in earnings were CNY 59,875,946.16, while grant cash received was CNY 44,005,177.16. The nonrecurring-item schedule includes a different CNY 55,961,454.16 grant measure, because the issuer treats employment and social-security subsidies separately in that classification. Deferred capital grants, current cash receipts and grant income therefore must not be combined. Technology-project grants identify funded work; they are not proof of a commercial customer, completed qualification or sales volume.

Income-tax expense / 2015 / consolidated

RMB 194,561,672.37

Government grants in earnings / 2015 / consolidated

RMB 59,875,946.16

Government grant cash received / 2015 / consolidated

RMB 44,005,177.16

The supplementary schedule reports net nonrecurring gains of CNY 2,017,963.35 after its tax and minority adjustments. Its components include a negative CNY 20,949,407.16 from noncurrent-asset disposals, CNY 55,961,454.16 of qualifying government grants, a negative CNY 39,472,693.73 financial-instrument result, other nonoperating items and CNY 4,347,778.04 of other qualifying gains. Positive and negative components must retain their signs; gross grant income is not the net nonrecurring total. The separate CNY 3,914,492 medical-insurance subsidy was classified as recurring by the issuer because the social-security support followed local employment. That is the issuer’s classification, rather than a guarantee that support will continue. Adjusted and unadjusted earnings remain descriptive operating measures and do not imply a trading recommendation.

Nonrecurring gains net / 2015 / owners after tax and minority

RMB 2,017,963.35

Noncurrent-asset disposal result / 2015 / consolidated

RMB -20,949,407.16

Issuer-classified recurring medical-insurance subsidy / 2015 / issuer recurring classification

RMB 3,914,492

The intangible-asset note reports CNY 262,031,462.88 of land-use rights and CNY 116,067,640.70 of mining rights at carrying value, alongside software, patents, nonpatented technology, trademarks and concessions. These accounting assets do not independently establish the validity, remaining scope or renewal of any project permit. The internal-development additions row is blank in this table, so it does not support treating all technical-development expense as a capitalized asset. Goodwill was CNY 472,512,501.24, including CNY 176,839,725.90 attributed to Tongxiang Jinshi and CNY 189,612,641.95 to Tongxiang Leishi. The disclosed unchanged goodwill balances are acquisition accounting values, not new plant capacity, metal inventory or an independent current valuation. A separate available-for-sale investment impairment balance must not be described as goodwill impairment. Routine amortization and impairment rules remain in the source archive; asset carrying values alone do not prove future recoverability.

Land-use rights carrying value / 2015 / consolidated

RMB 262,031,462.88

Net mining rights / 2015 / consolidated

RMB 116,067,640.7

Goodwill carrying value / 2015 / consolidated

RMB 472,512,501.24

Bills receivable totaled CNY 1,444,383,789.78 at year end, comprising bank acceptances of CNY 1,432,262,064.18 and commercial acceptances of CNY 12,121,725.60. The separately disclosed pledged bills of CNY 218,240,430.19 remain part of the asset-restriction account, not an additional receivable or available cash. Other receivables were CNY 114,406,838.12 gross and CNY 112,197,383.79 net after CNY 2,209,454.33 of provisions. These include tax refunds and deposits rather than only customer sales. The note separately assesses CNY 27,000,000 due from a finance-lease counterparty and CNY 25,029,746.33 of export-tax refunds without a provision because the issuer expected recovery; that assessment is not an independent guarantee of collection. Other-receivable write-offs were CNY 3,420,408, of which the named important items total CNY 3,419,408. The named subset is not an exhaustive total. The income statement’s bad-debt expense of CNY 34,975,979.75 has a wider reporting scope than the trade-receivable note’s CNY 34,278,135.17 charge; no unsupported full provision bridge is inferred.

Bills receivable net / 2015 / consolidated

RMB 1,444,383,789.78

Gross other receivables / 2015 / consolidated

RMB 114,406,838.12

Net other receivables / 2015 / consolidated

RMB 112,197,383.79

Other receivable credit-loss allowance / 2015 / consolidated

RMB 2,209,454.33

The tax note reports deferred-tax assets of CNY 37,639,568.01 and deferred-tax liabilities of CNY 61,942,446.37 before offsetting. These reflect different temporary differences, including receivable provisions, depreciation, internal profit, tax losses and acquisition valuations; they are not the same as tax paid or an immediately recoverable refund. The unrecognized deductible-loss base remains separately disclosed. The waste-glass-fiber utilization project received CNY 7 million of construction support in 2012. Its deferred grant decreased from CNY 6,079,115.11 by CNY 420,162.95 recognized in 2015 earnings to CNY 5,658,952.16 at year end. The 2012 cash receipt, 2015 income release and closing deferred balance are different periods and measures. No new 2015 receipt of the original construction grant is inferred. The project grant supports the account of recycling assets; it does not independently verify environmental permits or operating performance.

Deferred tax assets before offset / 2015 / consolidated before offset

RMB 37,639,568.01

Deferred tax liabilities before offset / 2015 / consolidated before offset

RMB 61,942,446.37

Reported deferred asset-related grant balance / 2015 / waste glass fiber utilization

RMB 5,658,952.16

Deferred grant income / 2015 / waste glass fiber utilization

RMB 420,162.95