China Jushi FY2016: Debt and related-party balances

Short-term borrowings were CNY 3,352,390,601.93, long-term borrowings were CNY 1,593,963,032.07 and the current portion of non-current liabilities was CNY 2,119,817,438.20. Management says the decline in long-term loans and bonds included transfers into amounts due within one year. A fall in the non-current classification therefore does not by itself establish repayment. The restricted-asset table totals CNY 3,933,195,221.52: monetary funds of CNY 104,294,900.75 pledged or deposited as security, receivable bills of CNY 378,737,360.18 securing bank acceptance bills, fixed assets of CNY 3,433,210,558.73 subject to mortgages or finance leases, and intangible assets of CNY 16,952,401.86 securing borrowing. Those are carrying values, not an additional debt principal or a measure of idle factories. The source table shows long-term payables of CNY 194,786,678.28, down from CNY 364,395,990.22. Its adjacent explanation nevertheless says they increased because matured finance leases were repaid. Original-page comparison confirms the conflicting direction; the table and wording are preserved rather than constructing a new repayment amount. Complete debt-note and maturity comparison remains pending.

Short-term borrowings / 2016 / consolidated

RMB 3,352,390,601.93

Non-current long-term borrowings after current-portion deduction / 2016 / consolidated

RMB 1,593,963,032.07

Current portions of non-current liabilities / 2016 / consolidated

RMB 2,119,817,438.2

Long-term payables / 2016 / consolidated

RMB 194,786,678.28

Restricted assets / 2016 / consolidated total

RMB 3,933,195,221.52

Restricted assets / 2016 / monetary funds

RMB 104,294,900.75

Restricted assets / 2016 / receivable bills

RMB 378,737,360.18

Restricted assets / 2016 / fixed assets

RMB 3,433,210,558.73

Restricted assets / 2016 / intangible assets

RMB 16,952,401.86

The 2012 corporate bond, code 122187, carried a CNY 1,200,000,000 principal, a 5.56% annual simple-interest rate and a 17 October 2019 maturity. Interest was payable annually, with principal repaid at maturity; the report says the net issue proceeds had been used to repay bank loans. The historical bond name uses the company’s former China Fiberglass name and is not a new issuer or a separate factory project. The contract’s annual interest date is 17 October, but the report’s payment narrative states that the 2016 interest was paid on 7 October 2016 and refers to a 12 October announcement. Original-page comparison preserves that distinction without inventing a corrected payment date. The issuer reports an AA+ rating and stable outlook in a dated tracking report; it is not a current or independent SinoFilings assessment. The annual bank-credit discussion reports 305.00 hundred-million CNY of credit from more than thirty banks, 273.28 hundred-million CNY used and 114.51 hundred-million CNY of loan repayments in 2016. These reported measures do not supply a complete bridge to year-end drawn debt or unconditional available headroom. Rounded repayments in that paragraph also differ in precision from the cash-flow statement. The company describes timely contractual service; no future refinancing assurance is inferred.

Reported bond principal / 2016 / 2012 corporate bond

RMB 1,200,000,000

Reported bond coupon rate / 2016 / 2012 corporate bond

5.56 percent

Reported annual bank credit / 2016 / annual credit discussion

RMB 30,500,000,000

Reported annual bank credit used / 2016 / annual credit discussion

RMB 27,328,000,000

Reported rounded loan repayments / 2016 / annual credit discussion

RMB 11,451,000,000

Closing short-term bank borrowings were CNY 3,352,390,601.93, comprising CNY 313,244,000.00 secured by mortgages, CNY 1,497,432,829.63 backed by guarantees and CNY 1,541,713,772.30 of unsecured credit borrowings. Long-term borrowings outside current portions were CNY 1,593,963,032.07: CNY 112,193,282.07 mortgage-backed, CNY 1,011,102,300.00 guaranteed and CNY 470,667,450.00 unsecured. The long-term note gives interest ranges of 2.29–5.50% for mortgage-backed, 2.65–5.93% for guaranteed and 1.20–2.00% for unsecured loans. These are ranges for disclosed classes, not a single group borrowing cost or a commitment that every future loan is available at those rates. Guarantees and mortgages constrain different parties and assets. The restricted-asset note separately includes CNY 3,433,210,558.73 of fixed assets and CNY 16,952,401.86 of intangible assets under borrowing or leasing restrictions; these are carrying values, not the principal of the loans they support. Closing loan balances do not represent annual new funds raised, annual repayments or unused bank facilities.

Bank borrowing category / 2016 / short term mortgage

RMB 313,244,000

Bank borrowing category / 2016 / short term guaranteed

RMB 1,497,432,829.63

Bank borrowing category / 2016 / short term unsecured

RMB 1,541,713,772.3

Bank borrowing category / 2016 / long term mortgage

RMB 112,193,282.07

Bank borrowing category / 2016 / long term guaranteed

RMB 1,011,102,300

Bank borrowing category / 2016 / long term unsecured

RMB 470,667,450

Short-term financing paper closed at CNY 1,900,000,000.00, the same as the opening balance. The movement table lists five 2016 issues of CNY 600,000,000.00, CNY 400,000,000.00, CNY 400,000,000.00, CNY 500,000,000.00 and CNY 400,000,000.00. Their sum is CNY 2,300,000,000.00; this is a calculated total of the current-issue rows, whose aggregate cell is blank in the original. Repayments are reported as CNY 2,300,000,000.00, including the CNY 400,000,000.00 issue with a 90-day term. The remaining 2016 issues have stated terms of 268–270 days. The separate issuance-amount column totals CNY 4,200,000,000.00 across both 2015 and 2016 instruments; it is not 2016 new financing. Thus an unchanged outstanding balance can conceal substantial financing turnover and a need to replace maturing funds. Face-value interest accrued in this table totals CNY 62,245,242.40, while closing short-paper interest payable is CNY 25,264,194.44. An annual interest accrual, a closing payable and repayment principal are different measures and are not added as if all were new borrowing.

Short financing paper balance / 2016 / consolidated

RMB 1,900,000,000

Short financing paper issue / 2016 / 16 scp001

RMB 600,000,000

Short financing paper issue / 2016 / 16 scp002

RMB 400,000,000

Short financing paper issue / 2016 / 16 scp003

RMB 400,000,000

Short financing paper issue / 2016 / 16 scp004

RMB 500,000,000

Short financing paper issue / 2016 / 16 scp005

RMB 400,000,000

Short financing paper repayments / 2016 / consolidated

RMB 2,300,000,000

Short paper face-value interest accrual / 2016 / consolidated

RMB 62,245,242.4

Current portions of noncurrent liabilities total CNY 2,119,817,438.20: long-term bank loans of CNY 1,249,593,100.00, bonds of CNY 700,000,000.00 and finance-lease payables of CNY 170,224,338.20. These are separate from the noncurrent balances and must be included only once when examining upcoming funding needs. The noncurrent bond balance is CNY 1,493,037,788.28, comprising CNY 1,195,182,906.36 for the 2012 corporate bond and CNY 297,854,881.92 for the 2014 medium-term note. Their face values were CNY 1,200,000,000.00 and CNY 300,000,000.00 respectively; carrying values reflect a different accounting measure. The two private-placement notes with CNY 500,000,000.00 and CNY 200,000,000.00 of opening balances no longer appear in the closing noncurrent column. Their combined principal matches the current bond portion, but a change in classification is not evidence that those amounts were repaid in 2016. Reported bond discount amortization of CNY 2,317,853.16 is likewise an accounting movement, not another cash issue. Accrued interest payable across financing categories is CNY 67,466,891.89 at year-end and differs from annual interest expense.

Long-term loans due within one year / 2016 / consolidated

RMB 1,249,593,100

Current portion of bonds / 2016 / consolidated

RMB 700,000,000

Current finance lease payables / 2016 / consolidated

RMB 170,224,338.2

Bond carrying value / 2016 / 2012 corporate bond

RMB 1,195,182,906.36

Bond carrying value / 2016 / 2014 medium term note

RMB 297,854,881.92

Bond discount amortization / 2016 / consolidated

RMB 2,317,853.16

Accrued financing interest / 2016 / consolidated

RMB 67,466,891.89

The issuer states that 73.43% of its debt was due in less than one year at 31 December 2016, compared with 61.64% a year earlier. That reported debt measure is distinct from the statement that 26.60% of interest-bearing borrowings carried fixed rates, compared with 24.25% in 2015. Neither percentage is substituted for a calculated share of all balance-sheet liabilities. The maturity note is labelled an undiscounted contractual cash-flow analysis and allocates CNY 1,574,963,032.07 of noncurrent bank loans to one-to-five years and CNY 19,000,000.00 beyond five years. Many rows equal their corresponding carrying values; the English account retains the source label and does not invent additional interest cash flows or a fully reconciled debt schedule. The issuer describes revolving liquidity planning and a mix of funding instruments as its response to maturity risk. These are management practices, not proof refinancing cannot fail. Its reported liabilities-to-assets ratio of 53.84%, versus 59.34% in 2015, measures a broader balance-sheet relationship and cannot be used as the denominator of either maturity or fixed-rate share.

Reported debt due under one year / 2016 / source defined debt

73.43 percent

Reported fixed-rate borrowing share / 2016 / interest bearing borrowings

26.6 percent

Reported liabilities to assets / 2016 / consolidated liabilities assets

53.84 percent

Bank debt maturity bucket / 2016 / noncurrent bank one to five years

RMB 1,574,963,032.07

Bank debt maturity bucket / 2016 / noncurrent bank over five years

RMB 19,000,000

The finance-expense note reports an exchange loss of CNY 173,037,006.56 for 2016, compared with CNY 46,963,048.24 in 2015. Separately, translation of foreign financial statements generated CNY 72,922,819.07 before tax in other comprehensive income, with CNY 71,228,352.15 attributed to the parent. A positive translation movement is not a cash receipt or a reversal of the profit-and-loss exchange loss. The foreign-currency monetary note translates cash balances to CNY 438,984,138.27, trade receivables to CNY 895,046,274.95, short-term borrowings to CNY 1,542,390,601.93 and noncurrent bank borrowings to CNY 1,161,371,032.07. These are currency-classified balances, not necessarily all held outside China, and their sum is not a complete net currency exposure. Jushi Egypt uses the US dollar as its functional currency based on its trade-settlement pattern, despite being located in Suez, Egypt. The issuer describes matching forward foreign-exchange contracts with underlying transactions and adding foreign-currency debt for overseas operations as risk responses; those statements do not prove all exposure was eliminated. The original other-receivable row uses a Brazilian-real conversion rate of 1.8497, while other Brazilian-real rows print 2.1333. The original rates and reported values are retained without forcing a common rate or silently recasting the balances.

Exchange loss / 2016 / consolidated

RMB 173,037,006.56

Foreign statement translation movement / 2016 / consolidated before tax

RMB 72,922,819.07

Foreign currency monetary balance / 2016 / monetary funds

RMB 438,984,138.27

Foreign currency monetary balance / 2016 / trade receivables

RMB 895,046,274.95

Foreign currency monetary balance / 2016 / short term bank debt

RMB 1,542,390,601.93

Foreign currency monetary balance / 2016 / noncurrent bank debt

RMB 1,161,371,032.07

The finance-lease note reports future minimum payments of CNY 390,928,586.65 and unrecognized finance charges of CNY 25,917,570.17. Their difference reconciles to noncurrent finance-lease payables of CNY 194,786,678.28 plus the CNY 170,224,338.20 current portion. Minimum payments within one year are CNY 184,475,074.42; that contractual payment bucket differs from the current principal carrying value because the measures include different financing components. The filing describes two Jushi Group equipment sale-and-leasebacks each with a reported total rental amount of CNY 300,000,000.00 and separate initial rentals, over four- and five-year terms, as well as a Chengdu equipment arrangement with a 60-month term. It explicitly says the equipment remained in the operating companies’ possession and was not physically delivered to the lessors. These arrangements therefore do not demonstrate that a factory was sold and stopped production. They carry guarantees and scheduled financing obligations. Annual cash paid for finance leases was CNY 159,651,357.15, with CNY 3,300,000.00 of finance-lease fees. The financing cash-flow note’s sale-and-leaseback receipt of CNY 302,212,724.94 belongs to the comparative year, not a new 2016 receipt. Separately, minimum operating-lease commitments total CNY 17,654,996.77. Two asset-note tables print different accumulated depreciation for finance-leased buildings and transport equipment; the unexplained discrepancy is retained rather than merged into one asset figure.

Minimum finance-lease payments / 2016 / consolidated

RMB 390,928,586.65

Unrecognized finance lease charges / 2016 / consolidated

RMB 25,917,570.17

Minimum finance-lease payments / 2016 / within one year

RMB 184,475,074.42

Finance lease cash paid / 2016 / consolidated

RMB 159,651,357.15

Finance lease cash fees / 2016 / consolidated

RMB 3,300,000

Operating lease minimum commitments / 2016 / consolidated

RMB 17,654,996.77

Year-end trade receivables from related parties totaled CNY 22,555,004.45 with CNY 280,127.06 of allowances. The list includes CNY 7,351,392.44 due from Zhongfu Lianzhong and CNY 13,318,059.78 from Zhenshi Yongchang. Related prepayments were CNY 5,847,341.74, including CNY 5,167,000.00 for equipment from Hefei Zhongya. These closing balances differ from annual sales or purchases; a prepayment for equipment is not evidence of installed capacity or a completed delivery. Related trade payables totaled CNY 29,372,438.17, including CNY 16,629,470.90 for Huarui equipment and CNY 3,518,306.78 for Songyang Mingshi purchases. A disclosed payable is not automatically a financing loan or another expense to add to annual purchases. The table also contains prior-only balances; blanks in its current columns do not establish a new current transaction or prove repayment. The annual report’s specific related-balance categories remain separate from its subsidiary guarantees and the parent’s internal funding accounts. This permits readers to assess related operating exposure without turning every counterparty into a separate investigation.

Related trade receivables / 2016 / consolidated

RMB 22,555,004.45

Related trade receivable allowance / 2016 / consolidated

RMB 280,127.06

Related-party supplier prepayments / 2016 / consolidated

RMB 5,847,341.74

Related-party trade payables / 2016 / consolidated

RMB 29,372,438.17

Related-party trade payables / 2016 / tongxiang huarui

RMB 16,629,470.9

Related-party trade payables / 2016 / songyang mingshi

RMB 3,518,306.78

Parent-company other receivables were CNY 591,885,041.25 gross, with CNY 360.00 of allowances and a net carrying value of CNY 591,884,681.25. The nature table identifies CNY 580,000,000.00 of loan principal, compared with CNY 60,000,000.00 at the start of the year. Debtor rows allocate the closing principal to Jushi Chengdu at CNY 290,000,000.00, Jushi Jiujiang at CNY 270,000,000.00 and Jushi Group at CNY 20,000,000.00. These are parent-to-subsidiary balances; their increase is not an equal amount of consolidated external financing, annual loan disbursements, customer revenue or project spending. The parent note says these related balances were not provided for, and lists their age as within one year. That accounting policy and ageing do not establish when cash will be repaid. Other categories include CNY 9,355,961.25 of export-tax refunds, CNY 2,000,000.00 of deposits and CNY 529,080.00 of advances, showing why not every other receivable is a customer debt or internal loan. Readers should compare these internal allocations with the separately disclosed group borrowings, guarantees and construction programme, while retaining the parent-versus-consolidated boundary.

Gross other receivables / 2016 / parent company

RMB 591,885,041.25

Other receivable allowance / 2016 / parent company

RMB 360

Net other receivables / 2016 / parent company

RMB 591,884,681.25

Parent internal loan principal / 2016 / subsidiaries

RMB 580,000,000

Parent internal loan principal / 2016 / jushi chengdu

RMB 290,000,000

Parent internal loan principal / 2016 / jushi jiujiang

RMB 270,000,000

Parent internal loan principal / 2016 / jushi group

RMB 20,000,000