China Jushi FY2016: Cash generation and working capital

Operating cash flow was positive CNY 3,169,081,426.53, while investing cash flow was negative CNY 2,493,795,145.21 and financing cash flow was negative CNY 1,661,228,032.38. Management links the increase in operating cash to lower cash payments for purchased goods and services, investing changes to increased payments for long-lived assets, and financing changes to lower borrowing receipts. These are net category cash flows, not the individual construction payments or a project-level funding balance. Monetary funds ended at CNY 1,854,648,483.23, down 43.63%; the report explains that the previous year-end had concentrated private-placement proceeds that were subsequently used. Fixed assets were CNY 12,768,530,461.88 and construction in progress was CNY 943,888,082.50. The report attributes much of the fixed-asset increase and construction decline to completion and transfer of the Tongxiang 360,000-tonne programme phase-I cold repair and Egypt phase-II 80,000-tonne line. Accounting transfer is distinct from new cash spending or proof of full-capacity output. The phase-I Tongxiang transfer also differs from the phase-II repair underway in the project narrative. Overseas assets of CNY 5,217,755,268.52 represented 21.80% of assets; that asset measure is not overseas revenue or freely available overseas cash.

Net cash from operating activities / 2016 / consolidated

RMB 3,169,081,426.53

Net cash from investing activities / 2016 / consolidated

RMB -2,493,795,145.21

Net cash from financing activities / 2016 / consolidated

RMB -1,661,228,032.38

Consolidated monetary funds / 2016 / consolidated

RMB 1,854,648,483.23

Net fixed assets / 2016 / consolidated

RMB 12,768,530,461.88

Consolidated construction in progress / 2016 / consolidated

RMB 943,888,082.5

Overseas assets / 2016 / consolidated

RMB 5,217,755,268.52

The treasury table lists five principal-protected bank products financed with temporarily idle placement proceeds. China Construction Bank’s Tongxiang branch products were 4.00 hundred-million CNY from 19 December 2016 to 15 March 2017, 2.00 from 22 December 2016 to 19 February 2017, and 5.00 from 30 December 2016 to 15 January 2017. Bank of China’s Tongxiang branch products were 0.60 hundred-million CNY from 22 December 2016 to 12 January 2017 and 2.40 from 30 December 2016 to 15 January 2017. The table’s total is 14.00 hundred-million CNY, equivalent to CNY 1.4 billion. These are specified placements and maturity dates, not five additional operating revenue streams or evidence that their proceeds were freely usable as cash at year-end. The actual recovered-principal, earned-return and impairment columns are blank in the original table; those blanks are not zero yields or proof of repayment. A separate overdue principal-and-return disclosure explicitly reports zero. The report labels the products principal-protected and approved through corporate procedures, without independently establishing future performance or current investment eligibility.

Reported treasury product principal / 2016 / ccb 20161219 20170315

RMB 400,000,000

Reported treasury product principal / 2016 / ccb 20161222 20170219

RMB 200,000,000

Reported treasury product principal / 2016 / ccb 20161230 20170115

RMB 500,000,000

Reported treasury product principal / 2016 / boc 20161222 20170112

RMB 60,000,000

Reported treasury product principal / 2016 / boc 20161230 20170115

RMB 240,000,000

Reported treasury product principal / 2016 / five product total

RMB 1,400,000,000

Overdue treasury principal and returns / 2016 / report defined

RMB 0

The financial statements cover the year from 1 January to 31 December 2016 and are presented in renminbi under Chinese Accounting Standards for Business Enterprises. Tianzhi issued an unmodified opinion on the parent and consolidated statements under report number 2017/5499, dated 18 March 2017; the board approved the financial statements for issue on that date. This is the issuer’s financial-statement audit, distinct from independent review of this English research. Consolidation is based on control and eliminates intra-group transactions, balances and unrealized internal profits. Parent accounts therefore cannot be added to subsidiary accounts to manufacture another group revenue or cash total. The organizational note identifies three direct subsidiaries, including Jushi Group, Beixin Technology Development and the new US manufacturing company, with 29 further subsidiaries below them. That legal-entity count is not a count of operating factories. The issuer’s principal disclosed activities include glass-fiber production and sales, building-material sales, and materials technology services. Its registered and headquarters office is at 669 Wenhua South Road, Wutong, Tongxiang, Zhejiang; this office disclosure does not verify a factory boundary or coordinates.

The report reclassified property tax, land-use tax and stamp duty incurred from 1 May 2016 from administrative expenses to taxes and surcharges. It increased consolidated taxes and surcharges and reduced consolidated administrative expenses by the same CNY 18,866,708.12; the corresponding parent-only reclassification was CNY 1,027,237.64. Taxes incurred before 1 May and comparative figures were not adjusted. This is a movement between expense lines, not an additional expense of that amount or a cash saving. Comparing administrative-cost growth or the taxes-and-surcharges line with 2015 requires this presentation boundary. The tax note also reports specific 15% income-tax concessions for Jushi Group, Jiujiang, Chengdu and the electronic-materials subsidiary, with different certifications or effective periods. Those are historical issuer disclosures tied to entities and conditions, rather than a single permanent rate for the group or a statement of today’s tax treatment.

Expense line reclassification / 2016 / consolidated admin to tax

RMB 18,866,708.12

Expense line reclassification / 2016 / parent admin to tax

RMB 1,027,237.64

Year-end gross trade receivables were CNY 1,450,423,411.47, with CNY 118,068,035.93 of allowance and CNY 1,332,355,375.54 net carrying value. The prior net balance was CNY 1,760,661,087.41. Of the closing gross balance, CNY 1,442,728,630.07 was assessed in the aging portfolio, including CNY 1,137,654,524.89 within one year and CNY 29,012,313.62 over five years. The disclosed aging provision rates rise from 1% within one year to 100% beyond five years. A separate CNY 7,694,781.40 of individually assessed smaller receivables was fully provided. Aging is not an assertion that every balance was contractually overdue. Annual receivable writeoffs were CNY 6,695,200.74; the named significant-writeoff subset totals CNY 5,642,795.59 and does not represent all writeoffs. The five largest closing debtors had CNY 182,620,094.42 of gross receivables, or 12.59% of the gross total, with CNY 20,754,692.92 of allowance. That balance-based concentration differs from annual customer sales concentration. The note identifies SUBOR BORU SAN. VE TIC. A.S and SUPERLIT BORU SAN A.S among these debtors, but receivable amounts do not establish new orders, current demand or exclusive customer relationships.

Trade receivables before allowance / 2016 / consolidated

RMB 1,450,423,411.47

Trade receivable expected-credit-loss allowance / 2016 / consolidated

RMB 118,068,035.93

Trade receivables after allowance / 2016 / consolidated

RMB 1,332,355,375.54

Gross trade receivables aged within one year / 2016 / consolidated aging portfolio

RMB 1,137,654,524.89

Accounts receivable aged more than five years / 2016 / consolidated aging portfolio

RMB 29,012,313.62

Individually assessed receivables, fully provided / 2016 / consolidated fully provided

RMB 7,694,781.4

Actual trade receivable write-offs / 2016 / consolidated

RMB 6,695,200.74

Top five debtor gross receivables / 2016 / consolidated top five

RMB 182,620,094.42

Top five debtor gross share / 2016 / consolidated top five

12.59 percent

Top five debtor allowance / 2016 / consolidated top five

RMB 20,754,692.92

Net inventories rose from CNY 1,240,591,005.21 to CNY 1,385,282,377.39. Closing gross inventories were CNY 1,385,342,322.16, with CNY 59,944.77 of write-down allowance. The closing net categories were raw materials of CNY 348,887,514.37, finished goods of CNY 981,746,821.80, reusable materials of CNY 32,921,053.27 and dispatched goods of CNY 21,726,987.95. These are monetary carrying values, not physical tonnes or an inventory-to-sales ratio. The report uses month-end weighted-average costing and lower-of-cost-and-net-realizable-value measurement. The allowance’s opening and closing balance is unchanged, while movement cells are blank; no invented zero charge or reversal is inserted. A small reported allowance does not establish that every product was readily saleable. The cash-flow reconciliation separately records a negative inventory adjustment of CNY 144,691,372.18. Balance-sheet movements and cash-flow adjustments have different reconciliation boundaries and are retained as separate reported figures.

Inventory before allowance / 2016 / consolidated

RMB 1,385,342,322.16

Inventory valuation allowance / 2016 / consolidated

RMB 59,944.77

Inventory after allowance / 2016 / consolidated

RMB 1,385,282,377.39

Raw materials net / 2016 / consolidated raw materials

RMB 348,887,514.37

Raw materials net / 2016 / consolidated finished goods

RMB 981,746,821.8

Raw materials net / 2016 / consolidated reusable materials

RMB 32,921,053.27

Raw materials net / 2016 / consolidated dispatched goods

RMB 21,726,987.95

The cash-flow note reports closing cash and cash equivalents of CNY 1,750,353,582.48, compared with CNY 2,853,785,300.04 at the start of the year. The closing amount reconciles to monetary funds of CNY 1,854,648,483.23 less CNY 104,294,900.75 of restricted money. The separate cash-equivalent investment row is blank; no additional investment balance is invented. The monetary-funds note reports CNY 257,677,305.06 held outside China, which is a geographic deposit measure, not all foreign-currency money or proof of immediate remittance to the parent. Other current assets include CNY 1,400,855,730.60 of bank treasury products and CNY 148,631,269.17 of uncredited VAT and prepaid taxes, totaling CNY 1,549,486,999.77. These products are classified separately from the cash-flow cash balance. Their carrying amount differs from the CNY 1,400,000,000 aggregate principal in the five governance-table products; the difference is not silently assigned to earned interest or a new purchase. The cash-flow note separately classifies CNY 58,694,166.87 of proceeds-fund and treasury income within other financing receipts. That annual receipt is not the return column for each year-end product, which remains blank in the governance table.

Cash and cash equivalents / 2016 / consolidated

RMB 1,750,353,582.48

Monetary funds held outside China / 2016 / consolidated

RMB 257,677,305.06

Bank treasury product carrying value / 2016 / consolidated

RMB 1,400,855,730.6

Uncredited VAT and prepaid taxes / 2016 / consolidated

RMB 148,631,269.17

Other current assets / 2016 / consolidated

RMB 1,549,486,999.77

Proceeds fund and treasury cash income / 2016 / consolidated financing receipts

RMB 58,694,166.87

The indirect cash-flow reconciliation starts with total consolidated net profit of CNY 1,528,719,094.69, including minority interests, and arrives at operating cash flow of CNY 3,169,081,426.53. Its reported depreciation adjustment is CNY 973,534,489.45. Working-capital adjustments include negative CNY 144,691,372.18 for inventories, negative CNY 95,644,086.54 for operating receivables and positive CNY 440,163,073.67 for operating payables. Thus higher operating cash than profit includes noncash expenses and liability/asset timing; it cannot be read as that much additional profit or as customer receipts alone. Operating receivables in this reconciliation are broader than the trade-receivable balance, so a fall in net trade receivables does not contradict a cash outflow in the broader adjustment. The operating-receipts note separately includes CNY 99,357,866.69 of government subsidy cash and CNY 62,195,593.55 released from operating-related restricted funds. The latter is released money, not new revenue. Government cash, recognized subsidy income and deferred project grants also have different periods and classifications; their full earnings comparison remains in the follow-up material.

Consolidated net profit, cash reconciliation / 2016 / consolidated

RMB 1,528,719,094.69

Cash-flow reconciliation depreciation / 2016 / consolidated

RMB 973,534,489.45

Inventory decrease in cash-flow reconciliation / 2016 / consolidated

RMB -144,691,372.18

Operating receivable decrease in cash-flow reconciliation / 2016 / consolidated

RMB -95,644,086.54

Operating payables increase adjustment / 2016 / consolidated

RMB 440,163,073.67

Government subsidy cash received / 2016 / consolidated

RMB 99,357,866.69

Operating restricted-fund release / 2016 / consolidated

RMB 62,195,593.55

Government subsidies recognized in nonoperating income were CNY 54,752,869.09, compared with CNY 59,875,946.16 in 2015. The disclosed list includes furnace-line upgrades, gas-cost subsidies, research and overseas-investment support, so this is support for specific activities rather than glass-fiber customer revenue. The cash-flow note separately reports CNY 99,357,866.69 of government-subsidy receipts. Cash received and current income are not interchangeable. The asset-related deferred-income note records CNY 45,000,000.00 received during 2016 for a 360,000-tonne intelligent-manufacturing application project, still deferred at year-end; its current-income cell is blank. A glass-fiber-waste reuse grant originally received in 2012 released CNY 395,002.40 to current income and closed at CNY 5,263,949.76. The combined deferred balance is CNY 50,263,949.76. These balances explain how industrial support can fund investment before all income is recognized. The 360,000-tonne grant label does not itself identify the separate intelligent-base groundbreaking, prove additional production capacity, or justify adding the grant to both current profit and current cash generation. Numerous smaller awards are condensed; they do not establish certifications, customer orders or environmental compliance.

Government grant income / 2016 / consolidated

RMB 54,752,869.09

Deferred industrial grant balance / 2016 / consolidated

RMB 50,263,949.76

Deferred industrial grant balance / 2016 / intelligent manufacturing application

RMB 45,000,000

Deferred industrial grant balance / 2016 / glass fiber waste reuse

RMB 5,263,949.76

Industrial grant income release / 2016 / glass fiber waste reuse

RMB 395,002.4

Interest expense in the finance-expense note fell from CNY 716,308,175.45 to CNY 436,771,751.30. Interest income is presented as negative CNY 88,838,953.43, offsetting expense; together with exchange loss of CNY 173,037,006.56 and other finance expense of CNY 15,409,690.91, the note totals CNY 536,379,495.34. This is an income-statement measure, distinct from closing interest payable, contractual debt payments and capitalized construction interest. The cash-flow reconciliation’s finance adjustment also has a separate scope and is not silently substituted for this total. Profit before tax was CNY 1,826,070,480.99; current tax expense of CNY 290,635,097.04 plus deferred tax expense of CNY 6,716,289.26 gives CNY 297,351,386.30 of total tax expense, leaving CNY 1,528,719,094.69 of total consolidated net profit. The tax bridge includes different subsidiary rates, prior-period adjustments and deductible-loss effects. It cannot be understood by applying a historical 15% concession uniformly to the whole group, or by treating accounting tax expense as cash tax paid. These distinctions let readers assess financing and tax effects on earnings while retaining the operating-business focus.

Interest expense / 2016 / consolidated

RMB 436,771,751.3

Finance expense / 2016 / consolidated

RMB 536,379,495.34

Profit before tax / 2016 / consolidated

RMB 1,826,070,480.99

Current tax expense / 2016 / consolidated

RMB 290,635,097.04

Deferred tax expense / 2016 / consolidated

RMB 6,716,289.26

Income-tax expense / 2016 / consolidated

RMB 297,351,386.3

The company bought logistics and industrial inputs from several disclosed related parties. Freight from Zhenshi Zhejiang Yushi International Logistics was CNY 217,685,411.71, compared with CNY 193,704,230.21 in 2015. Sichuan Yushi provided transport for sold products of CNY 36,889,777.14; Jiujiang Yushi freight was CNY 9,387,917.19; and Shanghai Tianshi freight was CNY 31,989,935.04. Tongxiang Huarui supplied equipment of CNY 37,118,068.02 and technical or procurement services of CNY 173,878.40. Raw-material purchases from Zhejiang Songyang Mingshi Mining were CNY 37,660,797.28. These are annual transaction amounts for named services and inputs, distinct from closing amounts still payable, factory capital budgets and the issuer’s top-five supplier concentration. The management table’s zero related purchases applies only to its top-five supplier subset, so it does not negate these related purchases elsewhere. In the original procurement table, Sichuan Yushi’s material-transport and vehicle-repair amounts appear only in the prior-year column; the current-year blanks are not filled with those prior amounts. These relationships show where related parties participate in the supply and distribution chain, without proving market pricing, an exclusive contract or a measured cost advantage.

Related-party logistics purchases / 2016 / zhejiang yushi

RMB 217,685,411.71

Related-party logistics purchases / 2016 / sichuan yushi sales transport

RMB 36,889,777.14

Related-party logistics purchases / 2016 / jiujiang yushi

RMB 9,387,917.19

Related-party logistics purchases / 2016 / shanghai tianshi

RMB 31,989,935.04

Related-party equipment purchases / 2016 / tongxiang huarui

RMB 37,118,068.02

Related-party raw material purchases / 2016 / songyang mingshi

RMB 37,660,797.28

The separate parent-company accounts report gross trade receivables of CNY 706,855,571.32, allowances of CNY 8,476,640.15 and a net carrying value of CNY 698,378,931.17. Balances due from Jushi Egypt of CNY 110,953,385.26 and Jushi Chengdu of CNY 91,119,232.93 total CNY 202,072,618.19 in the individually assessed category. The note says no allowance was made because they were related parties; that is the issuer’s stated accounting treatment, not proof collection is risk-free. The parent’s five largest debtor balances total CNY 273,470,119.20. Their printed total percentage is 34.69%, whereas the five displayed row percentages sum to 38.68% and the balance divided by reported gross parent receivables is approximately 38.69%. The source discrepancy remains visible; none of these parent measures replaces the consolidated external-customer concentration. Feicheng Sanying’s allowance is CNY 2,016,421.66 against CNY 39,749,607.23 of receivables, and the original cell prints 5.07%. Parent balances and subsidiary sales are not added to create another group total, because consolidation eliminates intra-group transactions and balances.

Trade receivables before allowance / 2016 / parent company

RMB 706,855,571.32

Trade receivable allowance / 2016 / parent company

RMB 8,476,640.15

Trade receivables after allowance / 2016 / parent company

RMB 698,378,931.17

Parent receivables from subsidiaries / 2016 / individually assessed

RMB 202,072,618.19

Parent top-five debtor balance / 2016 / parent top five

RMB 273,470,119.2

Parent reported top-five debtor share / 2016 / source printed total

34.69 percent

Parent long-term equity investments closed at CNY 10,069,272,554.83, comprising CNY 9,085,530,767.70 in subsidiaries and CNY 983,741,787.13 in associates or joint ventures. The subsidiary movement table records a CNY 900,000,000.00 addition to Jushi Group, raising its parent carrying value to CNY 8,995,170,009.39; Beixin Technology Development remains at CNY 90,360,758.31. An equity-investment movement is distinct from the internal loan balances and does not allocate spending to a specific factory. Parent associate investments include CNY 887,095,479.13 of additions, negative CNY 351,066.84 of equity-method results and CNY 39,730,060.39 of acquisition recognition. The last amount is already explained for the Zhongfu Lianzhong interest and is not another gain to count twice. Parent investment income totals negative CNY 351,066.84 in 2016; the cost-method income cell for 2016 is blank, while the CNY 1,000,000,000.00 cost-method figure belongs to 2015. The earlier dividend cannot be carried into current-year earnings merely because a related cash receipt appears elsewhere. Parent revenue of CNY 5,580,445,704.43 and operating cost of CNY 5,331,345,041.32 describe separate parent accounts and must not be added to consolidated revenue or costs. These boundaries explain how the listed parent holds and funds operating businesses while group operating performance is measured after consolidation.

Parent equity investment carrying value / 2016 / all equity investments

RMB 10,069,272,554.83

Parent equity investment carrying value / 2016 / subsidiaries

RMB 9,085,530,767.7

Parent equity investment carrying value / 2016 / associates joint ventures

RMB 983,741,787.13

Parent subsidiary equity addition / 2016 / jushi group

RMB 900,000,000

Parent investment income / 2016 / parent company

RMB -351,066.84

Revenue / 2016 / parent company

RMB 5,580,445,704.43

Operating cost / 2016 / parent company

RMB 5,331,345,041.32

The supplementary table reports CNY 58,752,306.68 of nonrecurring gains after its tax and minority-interest adjustments. Major components include government-grant income of CNY 54,752,869.09, the CNY 39,730,060.39 acquisition recognition associated with the Zhongfu Lianzhong investment, negative CNY 26,143,831.66 from noncurrent-asset disposals, and negative CNY 5,791,516.00 from the disclosed finance-related fair-value and disposal category. Other nonoperating net items of CNY 11,678,478.37 and another CNY 2,007,360.00 item are followed by negative tax and minority adjustments of CNY 16,299,515.18 and CNY 1,181,598.33. The aggregate is a classified earnings measure, not an additional cash receipt or an amount to add to consolidated profit. The grant, disposal and acquisition components are already discussed in their operating and investment contexts and are counted only once. Separating these effects helps readers understand earnings quality while keeping the main explanation focused on products, manufacturing, investment and funding.

Nonrecurring profit after adjustments / 2016 / consolidated after tax minority

RMB 58,752,306.68

The consolidated accounts report CNY 1,841,390,681.38 of receivable notes at year-end, comprising CNY 1,823,976,276.20 of bank-acceptance notes and CNY 17,414,405.18 of commercial-acceptance notes. This is a separate asset category from the trade-receivable balance and the cash-flow statement’s cash balance. The bank and commercial categories identify different acceptance types; their amounts alone do not establish that all notes are immediately available bank deposits or risk-free collections. Bank-acceptance notes of CNY 378,737,360.18 were pledged. The restriction therefore concerns a subset of note assets, not another receivable to add to the total or another cash payment. The company states that no endorsed or discounted notes remained outstanding at the balance-sheet date and that no notes had been transferred to trade receivables because the issuer of a note failed to perform. Those are dated statements for the designated categories, not guarantees of future collection or evidence of no credit risk elsewhere. Annual customer revenue, closing notes, trade receivables and pledged instruments must remain separate when examining the conversion of sales into usable funds.

Receivable notes balance / 2016 / consolidated

RMB 1,841,390,681.38

Receivable notes balance / 2016 / bank acceptance

RMB 1,823,976,276.2

Receivable notes balance / 2016 / commercial acceptance

RMB 17,414,405.18

Consolidated other receivables total CNY 96,383,626.76 before allowances of CNY 4,492,499.06, leaving CNY 91,891,127.70 of carrying value. These are separate from customer trade credit and the parent’s much larger internal subsidiary loans. The named individually assessed balances include CNY 27,000,000.00 and CNY 6,000,000.00 due from two finance lessors, classified in the debtor table as guarantee deposits, plus CNY 9,355,961.25 of export-tax refunds. The issuer says these named balances were recoverable and did not provide allowances; that assessment is not a guarantee of collection. The nature table separately gives CNY 45,066,601.65 of guarantee deposits and CNY 17,547,781.78 of other deposits across the account, with advances and staff imprests among the remaining categories. Named lessor amounts are subsets and are not added again to those nature totals. The broader export-refund category of CNY 9,375,915.46 also differs from the named individually assessed refund balance, so they are not silently equated. These balances explain funds tied to financing arrangements and operating requirements rather than additional glass-fiber sales or all freely available cash. Their classification does not allocate each deposit to a specific factory, disclose a repayment schedule or justify extending research into each counterparty.

Gross other receivables / 2016 / consolidated

RMB 96,383,626.76

Other receivable allowance / 2016 / consolidated

RMB 4,492,499.06

Net other receivables / 2016 / consolidated

RMB 91,891,127.7

Other receivable nature balance / 2016 / guarantee deposits

RMB 45,066,601.65

Other receivable nature balance / 2016 / other deposits

RMB 17,547,781.78

The available-for-sale investment note identifies a historical 10% cost-measured interest in Yantai Bohai Chemical Building Materials. Its gross balance and impairment allowance are both CNY 12,327,935.72 at the beginning and end of the year. The carrying-value cell and current-movement cells are blank; no new impairment charge or cash disposal is invented. This legacy investment differs from the new wind-blade and finance-leasing associate investments. The goodwill note separately reports unchanged gross goodwill of CNY 472,512,501.24, including CNY 176,839,725.90 associated with Tongxiang Jinshi precious-metal equipment and CNY 189,612,641.95 with Tongxiang Leishi powder processing. Those amounts are acquisition-related accounting balances, not the value of new factory construction, mineral reserves, production capacity or cash spending in 2016. The table is a gross-goodwill table and does not provide a separate impairment-testing calculation; unchanged gross amounts alone cannot establish that every acquired operation retained its economic value. Land-use and mining-right carrying amounts remain separately explained in industrial assets, without treating goodwill as another physical operating asset.

Legacy available-for-sale investment gross / 2016 / consolidated

RMB 12,327,935.72

Legacy available-for-sale investment allowance / 2016 / consolidated

RMB 12,327,935.72

Reported gross goodwill / 2016 / consolidated

RMB 472,512,501.24

Before offsetting, the deferred-tax note reports assets of CNY 57,183,001.68 and liabilities of CNY 89,962,022.04. Asset categories include receivable allowances, unrealized internal profit, depreciation differences and deductible operating losses. Liability categories include acquisition-related asset revaluation, depreciation differences and the investment accounting value above its tax basis. These are accounting and tax timing differences, separate from current tax expense and cash paid. The same note gives CNY 347,517,617.03 of deductible losses for which no deferred-tax asset was recognized, with disclosed expiries from 2017 through 2021. The losses are tax bases, not tax assets or refunds of the same amount; future use cannot be assumed. The policy recognizes deferred-tax assets only to the extent that sufficient future taxable profit is probable and calls for reassessment. Historical subsidiary concessions have different conditions and effective periods, so a single groupwide tax rate cannot be applied to all balances. This distinction matters when assessing how reported earnings and investments translate into cash, without forecasting future tax savings from the loss schedule.

Deferred tax assets before offset / 2016 / consolidated

RMB 57,183,001.68

Deferred tax liabilities before offset / 2016 / consolidated

RMB 89,962,022.04

Deductible losses without recognized deferred tax asset / 2016 / consolidated

RMB 347,517,617.03

The trade-receivable note records a current allowance charge of CNY 18,457,580.13 and the other-receivable note a charge of CNY 2,289,292.73; each states no recoveries or reversals. The impairment-expense note separately reports bad-debt losses of CNY 20,386,287.93. The two note charges do not sum to that expense total. Their original figures are retained without inventing another account, a foreign-exchange adjustment or an unexplained reversal to make the bridge close. Allowance movements, writeoffs and closing allowance balances are separate measures, not three amounts to add as current credit losses. Fixed-asset impairment expense of CNY 5,505,312.85 brings total asset-impairment expense to CNY 25,891,600.78, matching the fixed-asset note’s current provision. The cash-flow reconciliation adds noncash impairment back to profit; that adjustment does not erase credit risk or establish recovery of previously written-off customer balances. The disclosed difference remains a limit on a precise expense-to-movement reconciliation rather than proof of a new operating loss.

Current trade receivable allowance charge / 2016 / consolidated

RMB 18,457,580.13

Current other receivable allowance charge / 2016 / consolidated

RMB 2,289,292.73

Bad debt impairment expense / 2016 / consolidated

RMB 20,386,287.93

Fixed asset impairment expense / 2016 / consolidated

RMB 5,505,312.85

The issuer says roughly half of sales collections were settled in US dollars and describes forward foreign-exchange settlement contracts designated as cash-flow hedges. It assessed those contracts as highly effective; this is the company’s hedge assessment, not independent verification that all currency risk disappeared. The contracts were described as settling progressively during 2016–2017 with the underlying business contracts. The notes separately report CNY 1,100,216.51 of derivative assets and CNY 7,136,316.00 of forward-exchange liabilities at year-end. These are asset and liability carrying balances, not contract notional amounts, customer receipts or a complete net exposure calculation. The hedge note and fair-value note both identify negative CNY 5,791,516.00 recognized in current fair-value profit or loss. The same amount is not counted twice or treated as the entire exchange loss already reported in finance expense. Precious-metal forward investment income is another category and does not demonstrate foreign-currency customer collections. The historical policy’s accounting conditions and this dated hedge assessment do not establish the protection available for later years.

Derivative financial assets balance / 2016 / consolidated

RMB 1,100,216.51

Forward exchange liabilities balance / 2016 / consolidated

RMB 7,136,316

Selling expenses totaled CNY 295,479,170.05, including CNY 240,773,137.25 of transport costs. The delivery-cost category matters for a business with domestic and overseas sales, but does not identify transport volumes, routes, unit freight rates or each destination’s margin. Administrative expenses totaled CNY 655,768,663.13 and included CNY 254,614,013.61 of technology-development expense, compared with CNY 202,295,583.70 in 2015. This is the accounting-note expense category; it is not automatically a particular product’s development cost, capitalized technology asset or evidence of commercial orders. New-product and process claims remain tied to the separate management disclosures. Ordinary travel, meetings, publicity and office subcategories are condensed because their routine detail does not answer a distinct operating question. The property, land-use and stamp-tax reclassification already explained moves costs between administrative expenses and taxes and surcharges without changing total expense, so line-by-line comparisons with 2015 retain that boundary.

Selling expense / 2016 / consolidated

RMB 295,479,170.05

Transport within selling expenses / 2016 / consolidated

RMB 240,773,137.25

Administrative expense / 2016 / consolidated

RMB 655,768,663.13

Technology development expense / 2016 / consolidated

RMB 254,614,013.61

Advances from customers for goods fell from CNY 386,367,548.21 at the beginning of the year to CNY 80,815,714.54 at year-end. Including the separately stated other category, closing advances totaled CNY 80,826,269.79. Management attributes the balance decrease to lower advance payments for goods, without quantifying which products, customers or delivery periods caused the change. These are amounts carried as liabilities before the corresponding revenue is recognized, not an additional sales total or a disclosed backlog of confirmed orders. The note’s named balances older than one year total CNY 8,005,546.73 and are described by the issuer as not yet contractually due; age alone is not proof of overdue refunds or failed deliveries. The decline changes the funding provided by customer advances, but the two balance-sheet dates do not by themselves measure all cash received during the year or establish a collapse in demand. Supplier prepayments are a separate asset category; neither side is netted to invent a customer cash balance.

Customer goods advances / 2016 / consolidated

RMB 80,815,714.54

Customer goods advances / 2015 / consolidated opening

RMB 386,367,548.21

Customer advances total / 2016 / consolidated

RMB 80,826,269.79