China Jushi FY2015: Subsidiaries and invested companies

Jushi Group was wholly owned and produced and sold glass-fiber products. The major-company table reports revenue of 716,035.31 ten-thousand CNY and net profit of 99,799.64 ten-thousand CNY for that company. These are named-company figures, not amounts to add to listed-group revenue or parent-company earnings. The table does not allocate them to individual factories or projects, and ownership alone does not show cash dividends received. Company, geographic main-business and consolidated revenue scopes must be kept separate until the financial notes explain the reporting perimeter. Related and parent-company accounts will be compared without extending research to counterparties.

Revenue / 2015 / jushi group reported company

RMB 7,160,353,100

Net profit / 2015 / jushi group reported company

RMB 997,996,400

Beixin Technology Development was wholly owned and sold building materials. Its reported revenue was 3,239.71 ten-thousand CNY and net profit 32.57 ten-thousand CNY, both stated for the named company in the major-company table. This trading activity is distinct from glass-fiber manufacturing. Its revenue and profit cannot be added again to consolidated totals or assigned to a glass-fiber factory; the table also does not establish dividends received by the listed parent. The business difference provides context for examining the different product and consolidated reporting perimeters in the financial notes. No separate investigation of this counterparty is required.

Revenue / 2015 / beixin technology reported company

RMB 32,397,100

Net profit / 2015 / beixin technology reported company

RMB 325,700

The parent-company note reports CNY 197,232,648.35 receivable from Jushi Egypt, or 23.71% of parent gross trade receivables, with no bad-debt provision under its stated related-party treatment. The parent also reports CNY 60,000,000 of funding principal receivable from Jushi Jiujiang, identified separately from its trade balance. These are parent-level intragroup positions; they must not be added to consolidated third-party receivables. No provision under the issuer’s policy is not a guarantee of economic recovery. The parent investment-income note reports CNY 1,000,000,000 under the cost method for subsidiary investments and CNY 998,979,166.47 total investment income after an equity-method loss. The parent cash-flow statement reports CNY 350,000,000 received from investment income, while its balance sheet reports CNY 1,000,000,000 dividends receivable at year end. Accrued investment income, cash received and closing receivables have different periods and scopes. They are not additional group revenue or proof that the entire declared dividend was received in cash in 2015.

Parent intragroup trade receivable / 2015 / parent to jushi egypt

RMB 197,232,648.35

Parent intragroup funding principal / 2015 / parent to jushi jiujiang

RMB 60,000,000

Parent subsidiary investment income / 2015 / cost method subsidiaries

RMB 1,000,000,000

Parent investment income / 2015 / parent company

RMB 998,979,166.47

The ownership table shows Jushi Group and Beixin Technology as direct subsidiaries of the listed company, while the manufacturing and most channel entities are listed in the indirect-ownership column. Tongxiang, Jiujiang and Chengdu manufacture glass fiber and products. The disclosed upstream network includes Jiujiang Calcium for calcium oxide, calcium carbonate and fluorite; Dean Linda Limestone Quarry for limestone and other nonmetallic-mineral storage; Zhejiang Beite for glass-furnace refractory bricks; Tongxiang Jinshi for platinum-rhodium equipment; and Tongxiang Leishi for processing nonmetallic minerals. Reported indirect interests include 93% in Beite, 90% in Dean Linda and 60% in both Hongjia Kaolin Mining and Jianshi Juhong Mining. Egypt’s Suez entity is recorded for manufacturing and sales at 100% indirect ownership. The California US entity is a sales and import/export company; it is not the proposed South Carolina manufacturing project. Sales channels extend through Hong Kong, Toronto, Tokyo, Seoul, Mumbai, Milan, Madrid, Singapore, Lyon and Rio de Janeiro, with different reported ownership percentages. Legal registration and broad operating cities do not provide verified factory coordinates. The report says Jushi International Sales Services was cancelled during 2015; that consolidation change alone does not show a loss of all international customers. Stated business scope describes an entity’s role, not proof that every permitted product was commercially sold.

The parent’s investment in Jushi Group increased by CNY 433,550,000 during 2015, from CNY 7,661,620,009.39 to CNY 8,095,170,009.39. Parent investment in subsidiaries totaled CNY 8,185,530,767.70 at year end. These are parent-account investment carrying amounts and additions, not a further addition to consolidated production assets or evidence that the whole amount funded one named factory. The parent’s subsidiary investment income and cash receipts are explained separately. The parent revenue and cost table prints prior-period totals of CNY 3,936,559,746.19 and CNY 3,743,611,920.80 but leaves the current-period columns blank. Those prior-year figures must not be assigned to 2015; a blank cell is retained as a reporting boundary rather than filled with a guessed value.

Parent subsidiary investment additions / 2015 / parent to jushi group

RMB 433,550,000