Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
LU THAI TEXTILE CO., LTD.
SEMI-ANNUAL REPORT 2012
Stock Code: 000726, 200726
Stock Abbr.: LUTHAI A, LUTHAI B
Disclosure Date: 15 Aug. 2012
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Contents
Section I Important Notes……………………………………………………..………………2
Section II Company Profile……………………………………………………..….…………2
Section III Financial and Business Highlights……………………………………...………...3
Section IV Changes in Share Capital and Particulars about Shareholders……...….................5
Section V Directors, Supervisors and Senior Management..………………..……………… ..8
Section VI Report of the Board of Directors……………………………..………..………....14
Section VII Significant Events………………………………………………………………..25
Section VIII Financial Report…………………………..............................................……......49
Section IX Documents Available for Reference………………………………………………165
I. Important Notes
1. The Board of Directors, the Supervisory Committee, directors, supervisors and senior management of Lu Thai
Textile Co., Ltd. (hereinafter referred to as ―the Company‖) warrant that this report does not contain any false or
misleading statements or omit any material facts and will take individual and/or joint responsibility for the
authenticity, accuracy and completeness of all contents set forth herein.
2. No directors, supervisors or senior executives have declared uncertainty or disagreement about the truthfulness,
accuracy and completeness of this report.
3. All directors attended in person the board session for reviewing the semi-annual report.
4. The financial statements for the first half of 2012 have not been audited by a CPAs firm.
5. Mr. Liu Shizhen, company principal, Ms. Zhang Hongmei, head of the accounting work and Mr. Zhang Keming,
chief of the Financial Department hereby declare that the financial report enclosed in the semi-annual report is
true and complete.
English Translation for Reference Only. Should there be any discrepancy between the two versions, the Chinese
version shall prevail.
II. Company Profile
（I）Basic information
A-share code 000726 B-share code 200726
A-share abbreviation LUTHAI A B-share abbreviation LUTHAI B
Stock exchange listed with Shenzhen Stock Exchange
Legal Chinese name of the
鲁泰纺织股份有限公司
Company
Abbr. of the legal Chinese
鲁泰纺织
name of the Company
Legal English name of the
LU THAI TEXTILE CO.,LTD
Company
Abbr. of the legal English
LTTC
name of the Company
Legal representative of the
Liu Shizhen
Company
Registered address No. 11, Mingbo Road, High-tech Industry Development Zone, Zibo, Shandong
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Postal code for the registered
255086
address
Office address No. 81, Songling East Road, Zichuan District, Zibo, Shandong
Postal code for the office
255100
address
Internet website of the
www.lttc.com.cn
Company
Email address lttc@lttc.com.cn
（II）For contact
Secretary to the Board of Directors Securities Affairs Representative
Name Qin Guiling Zheng Weiyin
No. 81, Songling East Road, Zichuan No. 81, Songling East Road, Zichuan
Contact address
District, Zibo District, Zibo
Tel. 0533-5285166 0533-5285166
Fax 0533-5418805 5282188-234 0533-5418805
E-mail qinguiling@lttc.com.cn wyzheng@lttc.com.cn
（III）About information disclosure and where the semi-annual report is placed
Newspapers designated by the Company for
Securities Times, Shanghai Securities News and Ta Kung Pao
information disclosure
Internet website designated by CSRC for
www.cninfo.com.cn
disclosing the semi-annual report
Where the semi-annual report is placed Securities Department of the Company
III. Financial and Business Highlights
（I）Major accounting data and financial indexes
Any retrospective adjustment in previous financial statements?
□Yes √No □ Inapplicable
Major accounting data
Major accounting data Reporting period (Jan.-Jun.) Same period of last year Increase/decrease (%)
Gross operating revenues (RMB Yuan) 2,808,025,564.76 2,980,813,097.20 -5.8%
Operating profit (RMB Yuan) 340,105,678.91 623,059,761.14 -45.41%
Total profit (RMB Yuan) 358,115,812.42 627,922,258.35 -42.97%
Net profit attributable to shareholders of
301,503,288.19 491,647,065.96 -38.67%
the Company (RMB Yuan)
Net profit attributable to shareholders of
the Company after deducting non-recurring 302,733,028.86 476,456,565.30 -36.46%
gains and losses (RMB Yuan)
Net cash flow from operating activities
417,039,467.46 428,569,250.90 -2.69%
(RMB Yuan)
As at the end of this
As at the end of last year Increase/decrease (%)
reporting period
Total assets (RMB Yuan) 7,564,204,685.31 7,751,885,340.43 -2.42%
Owners’ equity attributable to shareholders
5,136,649,373.99 5,086,100,453.10 0.99%
of the Company (RMB Yuan)
Share capital (share) 1,008,954,800.00 1,008,954,800.00 0%
Major financial indexes
Major financial indexes Reporting period (Jan.-Jun.) Same period of last year Increase/decrease (%)
Basic EPS (RMB Yuan/share) 0.30 0.49 -38.78%
Diluted EPS (RMB Yuan/share) 0.30 0.49 -38.78%
Basic EPS after deducting non-recurring
0.30 0.48 -37.5%
gains and losses (RMB Yuan/share)
Fully diluted ROE（%） 5.79% 10.86% -5.07%
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Weighted average ROE（%） 5.79% 10.86% -5.07%
Fully diluted ROE after deducting
5.82% 10.53% -4.71%
non-recurring gains and losses（%）
Weighted average ROE after deducting
5.82% 10.53% -4.71%
non-recurring gains and losses（%）
Net cash flow per share from operating
0.41 0.43 -4.65%
activities (RMB Yuan/share)
As at the end of this
As at the end of last year Increase/decrease (%)
reporting period
Net assets per share attributable to
shareholders of the Company (RMB 5.09 5.04 0.99%
Yuan/share)
Liability/asset ratio（%） 26.93% 29.44% -2.51%
Notes to major accounting data and financial indexes before the end of this reporting period (please write an
adjustment note if there’s any retrospective adjustment)
（II）Accounting data differences under the domestic and overseas accounting standards
1. Net profit and net asset differences between financial reports disclosed according to the international and
Chinese accounting standards respectively
√Applicable □Inapplicable
Unit: RMB Yuan
Net profit attributable to shareholders of the Owners’ equity attributable to shareholders of
Company the Company
Reporting period Same period of last year Closing amount Opening amount
As per Chinese accounting
301,503,288.19 491,647,065.96 5,136,649,373.99 5,086,100,453.10
standards
Items and amounts adjusted according to international accounting standards:
Influence on the reporting
period of evaluated value
increase of fixed asset
265,500.00
investment not being
recognized under international
accounting standards
Influence of tax deduction for
home-made equipment being
recognized as deferred income 859,000.00 859,000.00 -5,629,000.00 -6,488,000.00
under international accounting
standards
As per international
302,362,288.19 492,771,565.96 5,131,020,373.99 5,079,612,453.10
accounting standards
2. Net profit and net asset differences between financial reports disclosed according to the overseas and
Chinese accounting standards respectively
□ Applicable √Inapplicable
3. Specific items involving significant difference
Involved provisions of
Items involving significant
Amount (RMB Yuan) Reason for the difference international and/or overseas
difference
accounting standards
4. Notes to accounting data differences under the domestic and overseas accounting standards
1. Influence of evaluated value increase of fixed asset investment
1. The Company invests in Zibo Luqun Textile Co., Ltd. with the evaluated value of fixed assets, and the
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
increment value is recorded into capital reserves in accordance with Chinese accounting standards, which is not
recognized in accordance with international accounting standards. In accordance with international accounting
standards, the differences shall be amortized through the useful life the fixed assets, then relevant net profits and
net assets shall be adjusted.
2. Influence of tax deduction for home-made equipment
The Company enjoys the tax deduction for home-made equipment, and relevant tax deduction can be directly
reduced the income taxes in accordance with Chinese accounting standards, while recognized as deferred income
relevant to assets. In accordance with international accounting standards, the differences shall be amortized
through the useful life the fixed assets, then relevant net profits and net assets shall be adjusted.
（III）Items of non-recurring gains and losses
√Applicable □Inapplicable
Items Amount (RMB Yuan) Notes
Gains and losses on disposal of non-current assets -167,511.63
Government grants recognized in the current year, except
for those acquired in the ordinary course of business or
16,550,426.92
granted at certain quotas or amounts according to the
country’s unified standards
Gains and losses on fair value changes of transactional
financial assets and liabilities, and investment gains on
disposal of transactional financial assets and liabilities and -11,445,391.51
available-for-sale financial assets, except for the effective
hedging business related to the Company’s normal operation
Other non-operating incomes and expenses besides the
1,627,218.22
items above
Minority interests effects -1,285,518.00
Income tax effects -6,508,964.67
Total -1,229,740.67 --
IV. Changes in Share Capital and Particulars about Shareholders
（I）Changes in share capital
1. Statement of changes of shares
√Applicable □Inapplicable
Before the change Increase/decrease (+, -) After the change
Capitaliz
Issuan
ation of
Proporti ce of Bonus Proporti
Amount public Others Subtotal Amount
on (%) new shares on (%)
reserve
shares
fund
I. Shares subject to trading
133,655,792.00 13.25% 5,500.00 5,500.00 133,661,292.00 13.25%
moratorium
1. State-owned shares
2. State-owned legal
person shares
3. Other domestic shares 14,090,000.00 1.4% 14,090,000.00 1.4%
Including: Shares held by
domestic non-state-owned
legal persons
Shares held by
14,090,000.00 1.4% 14,090,000.00 1.4%
domestic individuals
4. Shares held by overseas
118,232,400.00 11.72% 118,232,400.00 11.72%
shareholders
Including: Shares held by
118,232,400.00 11.72% 118,232,400.00 11.72%
overseas legal persons
Shares held by
overseas individuals
5. Shares held by senior
1,333,392.00 0.13% 5,500.00 5,500.00 1,338,892.00 0.13%
management staff
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
II. Shares not subject to
875,299,008.00 86.75% -5,500.00 -5,500.00 875,293,508.00 86.75%
trading moratorium
1. Ordinary shares
551,321,808.00 54.64% 551,321,808.00 54.64%
denominated in RMB
2. Domestically listed
323,977,200.00 32.11% -5,500.00 -5,500.00 323,971,700.00 32.11%
foreign shares
3. Overseas listed foreign
shares
4. Others
III. Total shares 1,008,954,800.00 100% 1,008,954,800.00 100%
Other information that the Company considers as necessary or securities regulatory authorities require to be
disclosed
During the reporting period, the Company’s senior management Mr. Pan Pingli increased to hold 5,500 shares of
Luthai B, reaching a total shareholding of 153,796 shares. And it caused the non-tradable shares increase by 5,500
shares while the tradable shares decrease by 5,500 shares.
2. Changes of shares subject to trading moratorium
√ Applicable □ Inapplicable
Reason for
Name of Shares at the Shares released in Shares increased Shares at the
trading Date of release
shareholder year-begin current year in current year year-end
moratorium
40% of the shares
will be released
on 18 Aug. 2012;
Implementation
30% of the shares
Equity incentive of Restricted
14,090,000.00 0.00 0.00 14,090,000.00 will be released
objects Equity Incentive
on 18 Aug. 2013;
Plan
30% of the shares
will be released
on 18 Aug. 2014.
Total 14,090,000.00 0.00 0.00 14,090,000.00 -- --
（II）Issuance and listing of securities
1. Securities issues in the previous three years
√ Applicable □ Inapplicable
Name of stocks Issuing price
Tradable
and derivative Issuance date (Yuan / Issuing amount Listing date Expiry date
amount
securities Share)
Stocks
A-share 18 Aug. 2011 5.025 14,090,000.00 6 Sept. 2011 0.00
Particluars:
The Company implemented the Restricted Equity Incentive Plan in Aug. 2011, issuing 14.09 million restricted
shares to the Company’s senior management, core management personnel, technical and business personnel,
totally 344 persons, with the issuing price of RMB 5.025.
2. Changes of the Company’s share number and structure, as well as the corresponding changes in its
asset-liability structure
□Applicable √Inapplicable
3. Existing employee shares
□Applicable √Inapplicable
（III）Shareholders and actual controller
1. Total number of shareholders at the end of the reporting period
The Company had 118,012.00 shareholders in total at the end of the reporting period.
2. Shareholding of the top ten shareholders
Particulars about shares held by the top ten shareholders
Name of shareholder (full Nature of Shareholding Total shares held Number of Pledged or frozen shares
name) shareholder percentage (%) at the period-end non-tradable Status of shares Number of
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
shares held shares
ZIBO LUCHENG Domestic
TEXTILE INVESTMENT non-state-owne 12.22% 123,314,700.00 0.00
CO., LTD. d corporation
Not tradable due
TAILUN (THAILAND) Foreign 118,232,400.
11.72% 118,232,400.00 to the lack of
TEXTILE CO., LTD corporation 00
application
DBS VICKERS (HONG
Foreign
KONG) LTD A/C 4.02% 40,528,642.00 0.00
corporation
CLIENTS
FIRST SHANGHAI Foreign
0.52% 5,256,436.00 0.00
SECURITIES LIMITED corporation
Foreign
AVIVA INVESTORS 0.46% 4,627,328.00 0.00
corporation
AVIVA LIFE AND Foreign
0.39% 3,930,923.00 0.00
PENSIONS UK LIMITED corporation
CHINA CONSTRUCTION Domestic
BANK-CHINA INCOME non-state-owne 0.36% 3,639,157.00 0.00
FUND d corporation
INDUSTRIAL
Domestic
BANK-INDUSTRIAL
non-state-owne 0.31% 3,153,442.00 0.00
TREND INVESTMENT
d corporation
MIXED TYPE FUND
GUOTAI JUNAN
Foreign
SECURITIES(HONGKON 0.3% 3,025,772.00 0.00
corporation
G) LIMITED
TOYO SECURITIES ASIA Foreign
0.3% 3,004,042.00 0.00
LIMITED-A/C CLIENT. corporation
Among the shareholders above, ZIBO LUCHENG TEXTILE INVESTMENT CO.,
LTD. is the first majority shareholder of the Company, TAILUN (THAILAND)
Explanation on particulars of shareholders
TEXTILE CO., LTD is the foreign sponsor shareholder, and other shareholders are
all tradable A-share and B-share holders.
Particulars about shares held by the top ten shareholders holding tradable shares
√ Applicable □ Inapplicable
Number of tradable Type and number of shares
Name of shareholder shares held at
Type Number
period-end
ZIBO LUCHENG TEXTILE INVESTMENT
123,314,700.00 A-shares 123,314,700.00
CO., LTD.
DBS VICKERS (HONG KONG) LTD A/C
40,528,642.00 B-shares 40,528,642.00
CLIENTS
FIRST SHANGHAI SECURITIES LIMITED 5,256,436.00 B-shares 5,256,436.00
AVIVA INVESTORS 4,627,328.00 B-shares 4,627,328.00
AVIVA LIFE AND PENSIONS UK LIMITED 3,930,923.00 B-shares 3,930,923.00
CHINA CONSTRUCTION BANK-CHINA
3,639,157.00 A-shares 3,639,157.00
INCOME FUND
INDUSTRIAL BANK-INDUSTRIAL TREND
3,153,442.00 A-shares 3,153,442.00
INVESTMENT MIXED TYPE FUND
GUOTAI JUNAN SECURITIES(HONGKONG)
3,025,772.00 B-shares 3,025,772.00
LIMITED
TOYO SECURITIES ASIA LIMITED-A/C
3,004,042.00 B-shares 3,004,042.00
CLIENT.
AGRICULTURAL BANK OF CHINA-CHINA
3,000,000.00 A-shares 3,000,000.00
POST CORE GROWTH STOCK FUND
Explanation on associated relationship or/and persons acting in concert among the above-mentioned shareholders:
Among the shareholders above, ZIBO LUCHENG TEXTILE INVESTMENT CO., LTD. is the first majority
shareholder of the Company, TAILUN (THAILAND) TEXTILE CO., LTD is the foreign sponsor shareholder, and
other shareholders are all tradable A-share and B-share holders. The Company is unable to tell whether there are
related parties or parties acting in concert among them.
3. Controlling shareholder and actual controller
（1）Change of the controlling shareholder and actual controller
□Applicable √Inapplicable
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
（2）Particulars about the controlling shareholder and actual controller
Is there a new actual controller?
□ Yes √ No □ Inapplicable
Name of the actual controller Zibo Lucheng Textile Investment Co., Ltd
Type of the actual controller
Particulars:
Zibo Lucheng Textile Investment Co., Ltd is the first principal shareholder as well as the actual controller of the
Company.
Legal representative: Liu Shizhen
Registered capital: RMB 63.26 million
Business scope: Zibo Lucheng Textile Investment Co., Ltd. (hereinafter referred to as Lucheng Investment) was
engaged in investment textile, electric power and pharmacy; knitwear and the relevant import and export business;
retail of lubricating oil, gas oil and diesel oil; Chinese meal and wholesale and retail of general merchandise and
etc. The original name of Lucheng Investment is Zibo Lucheng Textile Co., Ltd., which was founded on 25 Sep.
1998 based on Zibo No. 7th Cotton Textile Plant, sponsor of the Company. It is a Limited Company whose shares
held by natural persons. Mr. Liu Shizhen held 21% equity of Lucheng Investment, and is the first principal
shareholder of Lucheng Investment as well as the actual controller of Lucheng Investment. Basic information of
Liu Shizhen: Chinese nationality, he has not enjoy the residence permit in other countries or regions; he has been
taking the post as Chairman of the Board of the Company since 1990.
As at the beginning of the reporting period, Lucheng Investment held 123.3147 million shares of the Company,
taking up 12.22% of total share capital of the Company
（3）Illustration on the relationship between the Company and its actual controller
Liu Shizhen
21%
Zibo Lucheng Textile Investment Co., Ltd.
12.22%
Lu Thai Textile Co., Ltd.
（4）The actual controller controls the Company via trust or other ways of asset management.
□Applicable √Inapplicable
4. Other corporate shareholders with a shareholding over 10%
√Applicable □Inapplicable
Registere
Legal Incorporated Main operating business or
Name of corporate shareholder d capital Currency
representative date management activities
(’0000)
Tailun (Thailand) Textile Co., Ltd Xu Zhinan 29 Jan. 1985 Yarn spinning 60,000 THP
Registered capital of Tailun (Thailand) Textile Co., Ltd. is 0.6 billion baht, which is the
foreign sponsor of the Company as well as the second principal shareholder. At end of the
Notes reporting period, Tailun (Thailand) Textile Co., Ltd held 118.2324 million shares of the
Company, taking up 11.72% of total share capital of the Company. The shares are foreign
sponsor’ shares as well as non-tradable B shares, which has not been pledged or frozen.
（IV）Convertible corporate bonds
□Applicable √Inapplicable
V. Directors, Supervisors and Senior Management
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
（I）Shareholding changes of directors, supervisors and senior management
Shareholding Shareholding Receives
Share
Shareholding increase decrease Shareholding Including: payment
Beginning Ending date options held
at the during this during this at the restricted Reasons for from
Name Position Gender Age date of office of office at the
period-begin reporting reporting period-end shares held change shareholder
term term period-end
(share) period period (share) (share) units or other
(share)
(share) (share) related units?
Liu Shizhen Chairman Male 72.00 5 Jun. 2010 4 Jun. 2013 437,295.00 437,295.00 No
Vice
Xu Zhinan Male 82.00 5 Jun. 2010 4 Jun. 2013 Yes
chairman
Liu Zibin Director, GM Male 47.00 5 Jun. 2010 4 Jun. 2013 178,290.00 178,290.00 100,000.00 No
Fujiwara
Director Male 72.00 5 Jun. 2010 4 Jun. 2013 No
Hidetoshi
Chen
Director Male 68.00 5 Jun. 2010 4 Jun. 2013 No
Ruimou
Zeng
Director Male 61.00 5 Jun. 2010 4 Jun. 2013 No
Facheng
Wang Director,
Male 51.00 5 Jun. 2010 4 Jun. 2013 223,238.00 223,238.00 100,000.00 No
Fangshui Vice GM
Sun Zhigang Director Male 49.00 5 Jun. 2010 4 Jun. 2013 21,604.00 21,604.00 No
Qin Guiling Director Female 46.00 5 Jun. 2010 4 Jun. 2013 124,452.00 124,452.00 No
Independent
Zhou Zhiji Male 49.00 5 Jun. 2010 4 Jun. 2013 No
director
Independent
Wang Lei Female 42.00 5 Jun. 2010 4 Jun. 2013 No
director
Independent
Qi Haodong Male 52.00 5 Jun. 2010 4 Jun. 2013 No
director
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Independent
Bi Xiuli Female 45.00 5 Jun. 2010 4 Jun. 2013 No
director
Hong Independent
Male 39.00 19 Oct. 2011 4 Jun. 2013 No
Xiaobin director
Zhu Lingwen Supervisor Male 60.00 5 Jun. 2010 4 Jun. 2013 91,638.00 91,638.00 No
Liu Zilong Supervisor Male 44.00 5 Jun. 2010 4 Jun. 2013 No
Dong
Supervisor Male 43.00 5 Jun. 2010 4 Jun. 2013 5,000.00 5,000.00 No
Shibing
Li Tongmin Vice GM Male 56.00 5 Jun. 2010 4 Jun. 2013 206,164.00 206,164.00 100,000.00 No
Zhang Chief
Female 42.00 5 Jun. 2010 4 Jun. 2013 118,100.00 118,100.00 100,000.00 No
Hongmei accountant
Zhang Financial
Male 44.00 5 Jun. 2010 4 Jun. 2013 117,800.00 117,800.00 100,000.00 No
Kepeng manager
Human
Wu Yanzhen resource Female 45.00 5 Jun. 2010 4 Jun. 2013 110,000.00 110,000.00 100,000.00 No
manager
Chief auditor
with the
Qu Qingfeng Female 49.00 5 Jun. 2010 4 Jun. 2013 236,300.00 236,300.00 100,000.00 No
Audit
Department
Technical
Zhang
assistant to Male 44.00 5 Jun. 2010 4 Jun. 2010 118,400.00 118,400.00 100,000.00 No
Jianxiang
GM
International
Increase
Pan Pingli business Male 44.00 5 Jun. 2010 4 Jun. 2013 148,296.00 5,500.00 153,796.00 100,000.00 No
shareholding
manager
Chief
Bai Nianyue Male 46.00 5 Jun. 2010 4 Jun. 2013 113,715.00 113,715.00 100,000.00 No
Engineer’s
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Office
Manager
Yu Energy
Male 44.00 5 Jun. 2010 4 Jun. 2013 113,100.00 113,100.00 100,000.00 No
Shouzheng manager
Vice GM of
Lufeng
Lu Yongchen Male 44.00 5 Jun. 2010 4 Jun. 2013 117,900.00 117,900.00 100,000.00 No
Weaving &
Dyeing
Zhang
QC manager Male 42.00 5 Jun. 2010 4 Jun. 2013 113,100.00 113,100.00 100,000.00 No
Shougang
Production
Wang Jiabin assistant to Male 49.00 5 Jun. 2010 4 Jun. 2013 113,700.00 113,700.00 100,000.00 No
GM
Vice
Yu Yongbin production Male 46.00 5 Jun. 2010 4 Jun. 2013 115,000.00 115,000.00 100,000.00 No
GM
Vice GM of
Zhang Lufeng
Male 40.00 5 Jun. 2010 4 Jun. 2013 110,300.00 110,300.00 100,000.00 No
Zhanqi Weaving &
Dyeing
Total -- -- -- -- -- 2,933,392.00 5,500.00 2,938,892.00 1,600,000.00 -- --
Equity incentives granted to directors, supervisors and senior management during the reporting period
□Applicable √Inapplicable
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
（II）Post-holding particulars
Post-holding in shareholders units
√Applicable □Inapplicable
Name of the
Position in Ending
person holding Receives payment
the Beginning date of date of
any post in any Name of the shareholder unit from the shareholder
shareholder office term office
shareholder unit?
unit term
unit
Chairman of
Liu Shizhen Zibo Lucheng Textile Investment Co., Ltd 28 Sept. 1998 No
the Board
Chairman of
Xu Zhinan Tailun (Thailand) Textile Co., Ltd 29 Jan. 1985 Yes
the Board
Mr. Liu Shizhen is the legal representative of Zibo Lucheng Textile Investment Co., Ltd with shareholding
Notes to proportion of 21%, and is the first principal shareholder of Lucheng Investment as well as the actual controller of
post-holding in Lucheng Investment. Basic information of Liu Shizhen: Chinese nationality, he has not enjoy the residence permit
shareholder in other countries or regions. Mr. Xu Zhinan is the shareholder of Tailun (Thailand) Textile Co., Ltd., which is the
units foreign sponsor of the Company and the second principal shareholder. Basic information of Liu Shizhen: Thai
nationality.
Post-holding in other units
√Applicable □Inapplicable
Name of the
person holding Ending Receives
Position in Beginning date of office
Name of other unit date of payment from
any post in other unit term
office term other unit?
other units
Beijing Innovative Garment Co., Ltd., Lu
Thai (HongKong) Co., Ltd., Xinjiang
Luthai Harvest Cotton Co., Ltd., Lufeng
Weaving & Dyeing Co., Ltd., Zibo Luqun Chairman of
Liu Shizhen 11 Jul. 2000 No
Textile Co., Ltd., Zibo Xinsheng Thermal the Board
Power Co., Ltd., Beijing Lufeng Sunshine
Garments Co., Ltd., Shanghai Luthai
Textile & Garments Co., Ltd.
Xinjiang Luthai Harvest Cotton Co., Ltd.,
Wang Fangshui Lufeng Weaving & Dyeing Co., Ltd., Zibo Director 17 Jun. 2003 No
Luqun Textile Co., Ltd.
Sun Zhigang Beijing Innovative Garment Co., Ltd. Director 11 Jul. 2000 No
Xinjiang Luthai Harvest Cotton Co., Ltd.,
Qin Guiling Director 17 Jun. 2003 No
Zibo Luqun Textile Co., Ltd.
CICC Huifu Equity Investment Chairman of
Hong Xiaobin 1 Mar. 2011 Yes
Management Co., Ltd. the Board
Executive
Zhou Zhiji Shangdong Jinheng Counsulting Co., Ltd. director and 1 Jan. 2008 Yes
Manager
OTC Marketing Department of Qilun General
Wang Lei 1 Jun. 2011 Yes
Securities Co., Ltd. SME Financing Manager of
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Department in Qilun Securities Co., Ltd. OTC
Marketing
Department,
and
concurrently
Director of
Beijing
United
Cooperation
Center,
General
Manager
Shandong University of Finance and Vice
Qi Haodong 4 Jul. 2011 Yes
Economy President
Bi Xiuli Deiheng Law Offices Partner 1 Jan. 2011 Yes
Notes to
Except independent directors, other units that the Company’s directors hold positions in are all its controlled
post-holding in
subsidiaries.
other units
（III）Remuneration for directors, supervisors and senior management
The Remuneration Committee under the Board is responsible for promulgating the appraisal standards
Decision-making for directors and senior management of the Company as well as appraising them; making and reviewing
procedure for the the remuneration policies and plans for directors and senior management so as to be responsible for the
remuneration of directors, Board. The Remuneration & Appraisal Committee under the Board proposes the amount of
supervisors and senior remuneration and incentive ways for directors and senior management in accordance with position
management performance appraisal results and the Incentive & Restraint Plan for Senior Management, and votes for
such proposal, and then submits it to the Board after approval.
The Company’s Chief Accountant Room, Enterprise Management Department and Human Resources
Department are responsible for the preparatory work for making decision by Remuneration & Appraisal
Committee, and provide relevant materials of the Company: (1) the completion situation on main
financial indexes and operating goals of the Company; (2) the completion situation on relevant indexes
of listed companies in the same industry; (3) the work scopes and main responsibilities of senior
management of the Company; (4) the completion situation on indexed involved in the work
Basis for determining the
performance appraisal system for directors and senior management.
remuneration of directors,
The appraisal procedures of the Remuneration Committee on the directors and senior management: (1)
supervisors and senior
the senior management of the Company make the work report to the Remuneration & Appraisal
management
Committee under the Board; (2) the Remuneration Committee reviews the performance appraisal report
proposed by Human Resources Department; (3) the Remuneration Committee proposes the annual
appraisal results for senior management in accordance with position performance appraisal results and
the Incentive & Restraint Plan for Senior Management, and votes for such proposal, and then submits it
to the Board after approval.
Actual payment of the The Company has a total of 31 directors, supervisors and senior management, and all of them actually
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
remuneration of directors, withdraw the remuneration from the Company. Up to 30 Jun. 2012, they have withdrawn a total annual
supervisors and senior remuneration of RMB 6,202,600 (before tax).
management
（IV）Change of directors, supervisors and senior management
Naught
（V）Employees
Number of on-job employees 16,638.00
Number of retired employees for whom the Company shall bear
0.00
expenses
Function structure
Type of function Number of personnel
Production 11,439.00
Sale 549.00
Technical 4,236.00
Financial 75.00
Administration 339.00
Level of education
Level of education Number of personnel
Doctor’s degree 2.00
Master’s degree 22.00
University 395.00
Junior college 4,872.00
High school and below 11,347.00
VI. Report of the Board of Directors
（I）Discussion and analysis by the management
The Company is a comprehensive textile manufacturer that has integrated cotton planting, spinning, blanching and
dyeing, weaving, after-finishing and clothes making. The leading products are the shirt-use yarn-dyed fabric.
About 80% of the products produced by the Company are for export, and its markets cover more than 30 countries
and districts, including Japan, South Korea, America, Britain, Italy, etc. It is the largest production base of
shirt-use yarn-dyed fabric in the world.
In the reporting period, along with the continuous European debt crisis, sharply deteriorating market environment,
growing difference between domestic and overseas cotton prices, rising domestic labor cost, more and more
clients placing orders in Southeast Asia and other factors, the international competitiveness of the domestic textile
industry took a series of hits. With the unfavorable actual environment, despite a year-on-year increase of 1.60%
on the sales volume, the gross profit amount and rate both showed some phasic drop due to the adjustment of the
Company’s market and order structures. In the first half of last year, prices of the Company’s products also
increased a bit while cotton prices went up greatly. However, the Company’s product prices rose not so quickly
and greatly as cotton prices. And the rise of the Company’s product prices still cushioned impact of the cotton
14
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
price increase on the Company’s costs. So the business performance data were relatively good in the first half of
last year. Affected by the factors above, the year-on-year decrease of the Company’s profit for the first half of the
year was great. For the reporting period, the Company achieved operating revenue of RMB 2,808,025,600,
operating profit of RMB 340,105,700 and net profit attributable to owners of the Company of RMB 301,503,300,
down 5.80%, 45.41% and 38.67% respectively over the same period of last year.
The Company continued to support scientific research during the reporting period. 8 of its patent applications
were accepted, including 1 invention patent and 7 utility model patents. The Company was granted 9 patents in
the reporting period, including 4 invention patents and 5 utility model patents. Accumulatively, the Company has
been granted 77 patents, of which 13 are invention patents, 59 are utility model patents and 5 are design patents.
In the reporting period, the Company was honored jointly by Shandong Enterprise Association, Shandong
Enterprineur Association and Shandong Industry & Economy Association as a ―Unit with Advanced Culture in
Shangdong Province‖; honored as a ―May Fourth Red Flag Committee of Shandong‖ by Shandong Communist
Youth League; honored as an ―Enterprise that Pays Tax According to Laws for Making the Country Stronger and
Benefiting People‖ by Zibo State Administration of Taxation; and honored as one of the ―Top 10 Charity
Enterprises‖ by Zibo Red Cross Society.
Is the Company’s actual business performance 20% lower or higher than any earning forecast or business plan for
the reporting period which has been publicly disclosed earlier?
□ Yes √ No □ Inapplicable
Analysis to the business and performances of the Company’s main subsidiaries and stock-participating companies:
Lufeng Weaving & Dyeing Co., Ltd., the Company’s main controlled subsidiary, is mainly engaged in production
and sale of piece dyed cloth. The subsidiary’s registered capital is RMB 706.16 million, its total assets are RMB
1,440,416,700 and its net profit for the reporting period is RMB 44,036,500.
All risk factors that might have adverse impact on the Company’s effort to realize its future development strategy
and business goals:
During the reporting period, due to the deteriorating European debt crisis, growing difference between domestic
and overseas cotton prices, weak market demand, rising domestic labor cost, more and more client placing orders
in Southeast Asia and other factors, international competitiveness of the domestic textile industry took quite a few
hits. In the reporting period, the international cotton prices were much lower than the domestic ones, with the
largest difference reaching almost 40%, and the average international cotton price decreased 39% over the same
period of last year, which created huge difficulties for production and operation of textile enterprises. The
Company was no exception. Due to the normal reserve cycle of raw materials and the relative lag of the influence
of product market prices, net profit attributable to owners of the Company went down 38.67% over the same
period of last year.
The larger fluctuation of the Renminbi exchange rate also produced some impact on the Company in the reporting
period. The Company had carried out forward foreign exchange deals against Renminbi appreciation and locked
the cost in advance, but the larger fluctuation of the Renminbi exchange rate made it more difficult for the
Company to operate its forward foreign exchange deals.
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
1. Main business lines and their operating results
（1）Main business lines classified by industries and products
Unit: RMB Yuan
Increase/decrease Increase/decrease
Increase/decrease
of operating of gross profit
of operating cost
Gross profit revenue rate compared
Industry/product Operating revenue Operating cost compared with
rate (%) compared with with the same
the same period
the same period period last year
last year (%)
last year (%) (%)
Industry
Textile and
2,502,951,569.95 1,803,668,572.18 27.94% -7.26% 3.67% -7.6%
garments
Cotton 54,482,474.92 44,457,699.53 18.4% -16.86% -20.58% 3.82%
Electricity and
94,492,825.45 88,624,820.99 6.21% 43.78% 32.34% 8.11%
gas
Others 72,525,706.42 67,142,781.86 7.42% 407.70% 578.86% -23.34%
Product
Yarn-dyed fabric 1,865,722,025.87 1,375,834,973.23 26.26% -9.46% 4.17% -9.65%
Shirts 637,229,544.08 427,833,598.95 32.86% -0.17% 2.13% -1.51%
Lint 54,482,474.92 44,457,699.53 18.4% -16.86% -20.58% 3.82%
Electricity and
94,492,825.45 88,624,820.99 6.21% 43.78% 32.34% 8.11%
gas
Others 72,525,706.42 67,142,781.86 7.42% 407.70% 578.86% -23.34%
Explanation to the main business performances classified by industries and products:
1. The gross profit rate of the Company’s yarn-dyed fabric in the reporting period went down 9.65% over the same
period of last year, which was mainly because along with the continuous European debt crisis, slow recovery of
market demand, growing difference between domestic and overseas cotton prices, rising domestic labor cost and
more clients placing orders in Southeast Asia, the Company adjusted its market and order structures according to
the market situation.
2. The gross profit rate of other main business lines for the reporting period was 7.42%, down 23.34% from a year
earlier, which was mainly the variety structure of subsidiary agricultural products for sale changed.
（2）Main business lines classified by regions
Unit: RMB Yuan
Increase/decrease compared with the same
Region Operating revenue
period last year (%)
Hong Kong 285,635,416.39 2.58%
Japan, South Korea 252,372,289.46 3.26%
Southeast Asia 596,972,072.78 -10.15%
Europe, America 547,688,476.30 -24.27%
Others 302,652,040.67 -29.71%
China Mainland 822,705,269.16 28.61%
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
（3）Reasons for significant changes in main business and its structure
□Applicable √Inapplicable
（4）Reasons for significant changes in profitability of main business (gross profit rate) compared with that in
the last year
√Applicable □Inapplicable
The overall gross profit rate for the reporting period decreased mainly due to the 9.65% year-on-year decrease of
the gross profit rate of yarn-dyed fabric. Along with the continuous European debt crisis, slow recovery of market
demand, growing difference between domestic and overseas cotton prices, rising domestic labor cost and more
clients placing orders in Southeast Asia, the Company adjusted its market and order structures according to the
market situation and the gross profit rate decreased considerably as a result.
（5）Analysis on reasons of significant changes in profit breakdown compared with the last year
□Applicable √Inapplicable
（6）Business nature, main products/services, net profit and other particulars about subsidiaries which
made a contribution over 10% to the Company’s net profit for the reporting period
√Applicable □Inapplicable
Lufeng Weaving & Dyeing Co., Ltd., the Company’s main controlled subsidiary, is mainly engaged in production
and sale of piece dyed cloth. The subsidiary’s registered capital is RMB 706.16 million, its total assets are RMB
1,440,416,700 and its net profit for the reporting period is RMB 44,036,500.
(7) Problems and difficulties encountered in operation
2. Internal control rules in relation to fair value measurement
√Applicable □Inapplicable
Items related to fair value measurement:
Unit: RMB Yuan
Gains/losses on fair Accumulative fair Impairment
Item Opening amount value changes in the value changes provisions for the Closing amount
reporting period recorded into equity reporting period
Financial assets
Including: 1.
Financial assets
measured at fair
value whose changes
are recorded into
17
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
current gains and
losses
Of which: derivative
20,939,380.00 -20,939,380.00
financial assets
2. Available-for-sale
financial assets
Subtotal of financial
20,939,380.00 -20,939,380.00
assets
Financial liabilities 10,107,650.00 10,107,650.00
Investing property
Production
biological assets
Others
Total 20,939,380.00 -31,047,030.00 10,107,650.00
Where the value estimation technique was adopted to determine fair value for the same or similar items within the
two years, is there any significant difference between the value estimation results? If yes, please state in detail.
□ Yes √ No □ Inapplicable
3. Foreign-currency financial assets and liabilities held
√Applicable □Inapplicable
Unit: RMB Yuan
Gains/losses on fair Accumulative fair Impairment
Item Opening amount value changes in the value changes provisions for the Closing amount
reporting period recorded into equity reporting period
Financial assets
Including: 1. Financial
assets measured at fair
value whose changes
20,939,380.00 -20,939,380.00
are recorded into
current gains and
losses
Of which: derivative
20,939,380.00 -20,939,380.00
financial assets
2. Loans and
375,326,221.05 532,697,817.09
receivables
3. Available-for-sale
financial assets
4. Held-to-maturity
investments
Subtotal of financial
396,265,601.05 -20,939,380.00 532,697,817.09
assets
Financial liabilities 810,929,536.74 10,107,650.00 917,790,106.68
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
（II）Investments
1. General utilization of the raised funds
√Applicable □Inapplicable
Unit: RMB Ten thousand
Total raised capital 95,081.45
Total raised capital input in the reporting period 5,631.52
Accumulative raised capital input 93,574.82
Total raised capital of which the use was changed in the
0
reporting period
Accumulative raised capital of which the use was
14,000
changed
Proportion of accumulative raised capital of which the
14.72%
use was changed
General utilization of the raised funds
In Dec. 2008, the Company carried out a refinancing project, issuing additional 150 million A-shares and raising a net amount of
RMB 950,814,500. And the raised funds went to the 150,000-Ingot Top-grade Fine Combed Yarn Project, the 50-thousand Ingot
Two-for-one Twisting Production Line Project, the Production Line Project for 10-million-meter Top-grade Jacquard Fabrics for
Women’s Wear, the Marketing Network Development Project and the Project for Supplementing the Working Capital. Among the
aforesaid projects, the 150,000-Ingot Top-grade Fine Combed Yarn Project, the 50-thousand Ingot Two-for-one Twisting Production
Line Project, the Production Line Project for 10-million-meter Top-grade Jacquard Fabrics for Women’s Wear and the Project for
Supplementing the Working Capital had been completed before the reporting period.
Meanwhile, on 18 Oct. 2011, the proposal on adjusting the raised funds investment projects was reviewed and approved at the 3rd
Special Shareholders’ General Meeting for 2011. It was decided to adjust the raised funds investment of RMB 200 million for the
Marketing Network Development Project to RMB 60 million, and the remaining RMB 140 million would be invested in a new
project—the Production Line Project for 40-million Meter Top-grade Yarn-dyed Fabric. By the end of the reporting period, the
cumulative input for the new project stood at RMB 140,000,000.00, including RMB 28,102,963.11 for construction and RMB
111,897,036.89 for equipment purchase. The project investment was paid by raised funds of RMB 140,000,000.00, which was in
line with the planned raised funds investment amount.
RMB 2,096,900 was invested in the Marketing Network Development Project during the reporting period, and the cumulative
investment in the project stood at RMB 44,933,700. Currently, the Company has opened 33 shops and expanded its online
marketing channels via ―Lu Thai Online‖.
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
2. Projects promised to be invested with raised funds
√Applicable □Inapplicable
Unit: RMB Ten thousand
Project Investment Date when the Material
Profit
Projects invested with raised capital changed or not Raised capital Investment Accumulative progress up to project reaches Reach the change in the
Input in the generated in
as promised and investments with (including input as after input up to the the period-end the expected expected profit project
reporting year the reporting
over-raised capital partially promised adjustment (1) period-end (2) (%)(3)＝ usable or not feasibility or
period
changed) (2)/(1) condition not
Projects invested with raised capital
as promised
Project for Marketing Network
Yes 6,000 6,000 209.69 4,493.37 74.89% 30 Dec. 2012 0 Yes No
Development
Project for a 40-million Meter
Top-grade Yarn-dyed Fabric No 14,000 14,000 5,421.83 14,000 100% 0 Yes No
Production Line
Subtotal of promised investment
- 200,000 200,000 5,631.52 18,493.37 - - 0- -
projects
Investments of over-raised capital
Repaying bank loans (if any) - - - - -
Supplementing working capital (if
- - - - -
any)
Subtotal of investments with
- - - - -
over-raised capital
Total - 200,000 200,000 5,631.52 18,493.37 - - 0- -
Reason for failing to reach
scheduled progress or projected The Project for Marketing Network Development and the Project for a 40-million Meter Top-grade Yarn-dyed Fabric Production Line are proceeding as scheduled.
income (explain one project by one
20
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
project)
Explanation on significant changes
Up to 30 Jun. 2012, no material change had occurred in the feasibility of the Company’s raised capital investment projects.
in feasibility of projects
Amount, usage and usage progress □Applicable √Inapplicable
of over-raised capital
Change of the implementation □Applicable √Inapplicable
location of any raised funds □ Took place in the reporting period □ Took place in previous years
investment project
Adjustment of the implementation □Applicable √Inapplicable
method of any raised funds □ Took place in the reporting period □ Took place in previous years
investment project
√Applicable □Inapplicable
Advance input and exchange of any On 11 Jan. 2009, Proposal on Replacing the Self-collected Funds of RMB 264,861,646.97 with the Input Raised Capital in Advance at the 27th Meeting of the
th
raised funds investment project 5 Board of Directors. Sponsor Guotai Junan Securities Co., Ltd expressed the same opinion. The Company engaged RSM China Certified Public Accountants to
audit investment of self-collected capital to project should be invested with raised capital in advance, and issued certification report ZRYHZS Zi [2008] No. 3754.
√Applicable □Inapplicable
On 3 Sept. 2010, it was reviewed and approved at the 3 rd Session of the 6th Board of Directors to temporarily supplementing working capital with raised funds of
RMB 94 million for a term from Sept. 2010 to Mar. 2011. The raised funds used for supplementing working capital accounted for 9.89% of the net raised funds, so
the relevant proposal did not need to be submitted to the general meeting for review. Independent directors and Guotai Junan Securities (the sponsor) issued their
independent opinion and sponsor opinion respectively. The announcement about temporarily supplementing working capital with raised funds was published on
Idle raised capital for temporarily Securities Times, Shanghai Securities News and Ta Kung Pao dated 4 Sept. 2010. On 2 Mar. 2011, the Company returned, in full amount, the raised funds used
supplementing working capital previously for supplementing working capital. On 28 Mar. 2011, it was reviewed and approved at the 9 th Session of the 6th Board of Directors to temporarily
supplementing working capital again with raised funds of RMB 94 million for a term from Mar. 2011 to Sept. 2011. The raised funds used for supplementing
working capital accounted for 9.89% of the net raised funds, so the relevant proposal did not need to be submitted to the general meeting for review. Independent
directors and Guotai Junan Securities (the sponsor) issued their independent opinion and sponsor opinion respectively. The announcement about temporarily
supplementing working capital with raised funds was published on Securities Times, Shanghai Securities News and Ta Kung Pao dated 30 Mar. 2011. On 21 Sept.
2011, the Company returned, in full amount, the raised funds used previously for supplementing working capital.
Outstanding raised funds in project □Applicable √Inapplicable
21
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
implementation and reasons
Usage and whereabouts of unused
The unused raised capital up to 30 Jun. 2012 will be input for the Project for Marketing Network Development.
raise capital
Problems found in the usage and
The Company performed its information disclosure duty in a timely, accurate and complete manner when it used raised funds, temporarily supplemented working
disclosure affairs of raised capital
capital with raised funds and changed the investment directions of raised funds. No violation of information disclosure rules was found.
and other situations
22
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
3. Change of projects invested with raised funds
√Applicable □Inapplicable
Unit: RMB Ten thousand
Total raised Material
Investment Date when
funds Actual Profit change in
Actual input progress up the project
Project planned to cumulative generated in Reach the the
Project after for to the reaches the
before be input for input by the expected after-change
change reporting period-end expected
change the project period-end reporting profit or not project
period (%)(3)＝ usable
after change (2) period feasibility
(2)/(1) condition
(1) or not
Project for a
40-million
Project for
Meter
Marketing
Top-grade
Network 14,000 5,421.83 14,000 100% 1 Jun. 2013 0 Yes No
Yarn-dyed
Developme
Fabric
nt
Production
Line
Total -- 14,000 5,421.83 14,000 -- -- 0 -- --
Due to market changes and other reasons, the implementation of the raised funds-invested
project—Project for Marketing Network Development—was slow. It was a project that
should be invested persistently on a long-term basis, so some raised funds for the project
was idle for a long time, which affected the utilization efficiency of raised funds. In order to
Reasons for change, decision-making increase the utilization efficiency of the capital and maximize shareholders’ interests,
procedure and relevant information according to relevant stipulations in the management methods for use of raised funds, the
disclosure (explain one project by one Company held the 3rd Special Shareholders’ General Meeting for 2011 on 18 Oct. 2011, at
project) which the proposal on adjusting the raised funds-invested project was reviewed and
approved. According to the said proposal, the raised fund for the Project for Marketing
Network Development was adjusted from RMB 200 million to RMB 60 million and the
remaining RMB 140 million would be input for a new project—the Project for a 40-million
Meter Top-grade Yarn-dyed Fabric Production Line.
Reason for failing to reach scheduled
The Project for a 40-million Meter Top-grade Yarn-dyed Fabric Production Line is
progress or projected income (explain
proceeding as scheduled.
one project by one project)
Explanation on significant changes in
Naught
feasibility of projects after change
4. Significant projects invested with non-raised funds
√Applicable □Inapplicable
23
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Unit: RMB Ten thousand
Disclosure
Amount for the
Project name date of the first Project progress Project earnings
project
announcement
Project for a 40-million Meter
Top-grade Yarn-dyed Fabric 29 Sept. 2011 36,470 69% 0
Production Line
50-million Meter Top-grade Piece
12 May 2011 65,993 68% 0
Dyed Fabric Project
A new 230,000-spindle production
line project and a new 35,000-ingot
27 Apr. 2012 92,866 0.24% 0
two-for-one twisting production
line project
Total 195,329 -- --
Notes to significant projects invested with non-raised funds
（III）Revision of the Board of Directors’ business plan for the second half of the year
□Applicable √Inapplicable
（IV）Business performance estimate for Jan.-Sept. 2012
Warnings of estimated possible losses or major changes of the accumulative net profit achieved during the period
from the beginning of the year to the end of the next reporting period compared with the same period of last year,
as well as the reasons
□Applicable √Inapplicable
（V）Explanation of the Board of Directors on “Non-standard Auditing Report” issued by the
CPA firm for the reporting period
□Applicable √Inapplicable
（VI）Explanation of the Board of Directors on changes and solutions of the issues involved in
the “Non-standard Auditing Report” issued by the CPA firm for last year
□Applicable √Inapplicable
（VII）State the discussion results of the Board of Directors on the reasons and influence of
the Company’s accounting policy and estimate alterations or significant accounting error
correction
□Applicable √Inapplicable
24
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
（VIII）Formulation and execution of the Company’s cash dividend policy
A. The Company explicitly stipulates in its Articles of Association the conditions for cash dividends, the pricing
methods for cash dividends for A-share and B-share holders and other policies. The dividend plan was formulated
in strict compliance with relevant requirements in the Articles of Association at the 19th Session of the 6th Board of
Directors, which independent directors attended and voted on the plan. Reviewed and approved at the 2011
Annual Shareholders’ General Meeting held on 27 Apr. 2012, execution of the dividend plan was completed on 26
Jun. 2012. The dividend ratio, decision-making procedure, dividend distribution and other matters for 2011 were
all in line with the Articles of Association and relevant resolutions of the general meeting.
B. According to the Notice of CSRC on Further Implementing Matters Related to Cash Dividend Distribution by
Listed Companies, the Company reviewed and approved the Proposal on Amending Some Articles in the Articles
of Association at the 22nd Session of the 6th Board of Directors held on 13 Jul. 2012, which was later reviewed and
approved at the 3rd Special Shareholders’ General Meeting for 2012 held on 30 Jul. 2012. Article 77, Article 154
and Article 155 of the Articles of Association were amended. And the amended articles specified the
decision-making mechanism for the Company’s profit distribution policy and its adjustment, as well as conditions,
standards and the ratio for cash dividends. The amended dividend-related articles were in line with the Notice of
CSRC on Further Implementing Matters Related to Cash Dividend Distribution by Listed Companies.
（IX）Pre-plan for profit distribution or turning capital reserve into share capital
□Applicable √Inapplicable
（X）The accumulative retained profit as at the end of 2011 is a positive number but the
Company has not put forward a cash dividend pre-plan.
□Applicable √Inapplicable
（XI）Other events to be disclosed
（ XII ） The Company’s liabilities, credit changes and future cash arrangements for
debt-clearing (Only listed companies with convertible corporate bonds are required to fill the
table below.)
□Applicable √Inapplicable
VII. Significant Events
（I）Corporate governance
The Company continued to perfect the corporate governance structure, establish and perfect the modern enterprise
system and ensure the efficient and standardized operation of the Company’s Shareholders’ General Meeting,
Board of Directors, Board of Supervisors and Senior Executives strictly according to Company Law, Securities
Law and Governing Rules for Listed Company as well as relevant stipulations and requirements from CSRC. It
formed a relationship of clear division of rights and responsibilities, assuming each own functions and check and
25
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
balance each other between the management organ, decision-making organ, supervisory organ and management
layer, so as to provide a good internal operational environment for the Company’s standardized and efficient
operation. At present, there is no difference between the actual situation of the Company’s corporate governance
structure and the requirements on the corporate governance of CSRC and Shenzhen Stock Exchange.
During the reporting period, pursuant to the Stock Listing Rules of Shenzhen Stock Exchange, the Basic Norms of
Internal Control for Enterprises and the Notice of CSRC on Further Implementing Matters Related to Cash
Dividend Distribution by Listed Companies, the Company amended the Internal Control Management Rules of Lu
Thai Textile Co., Ltd., the Information Insider Registration Management Rules and the Articles of Association and
continued to improve its corporate governance structure.
（II）Execution of the plans for profit distribution, turning capital reserve into share capital
or new share issuance which had been made in the previous period and were carried out in
the reporting period
√Applicable □Inapplicable
On 27 Apr. 2012, the 2011 annual profit distribution plan was reviewed and approved at the 2011 Annual
Shareholders’ General Meeting, with details of the plan as follows: based on total share capital of 1,008,954,800
shares as at 31 Dec. 2011, the cash dividend of RMB 2.80 (tax included) should be distributed for every 10 shares,
and it tuned to be RMB 2.52 for distribution for every 10 shares after 10% personal income tax was deducted. Of
which, the cash dividend to shareholders of B share should be converted into HK dollars by the middle price
between RMB and HKD declared by the People’s Bank of China on the first working day after adopting
resolution of the Shareholders’ General Meeting. On 19 Jun. 2012, the 2011 Annual Equity Distribution
Implementation Plan of Lu Thai Textile Co., Ltd. was published on China Securities Journal, Securities Times and
http://www.cninfo.com.cn. And execution of the plan was completed on 26 Jun. 2012.
(III) Significant litigations and arbitrations
□Applicable √Inapplicable
The Company was not involved in any significant lawsuit or arbitration during the reporting period.
(IV) Bankruptcy or reorganization events
□Applicable √Inapplicable
(V) Holding equity of other listed companies and joint financial enterprises
1. Securities investment
□Applicable √Inapplicable
2. Holding equity of other listed companies
□Applicable √Inapplicable
26
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
3. Holding equity of non-listed financial enterprises
□Applicable √Inapplicable
4. Trading stocks of other listed companies
□Applicable √Inapplicable
(VI) Assets transaction events
27
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
1. Purchase of assets
√Applicable □Inapplicable
Net profit
Net profit
contributed to
contributed to
the Company Relationship
the Company Whether or Ratio of the
from the between the
from the not the Whether or net profit
Transaction acquisition not the transaction Disclosure
Asset Transaction year-begin to Related-party ownership of contributed by
party or Date of date to the Pricing creditor’s right party and the date of the
acquired or price (RMB the period-end transaction or the asset and liabilities the asset to
ultimate acquisition period-end principle involved have Company first interim
bought in Ten thousand) (applicable for not involved has the Company
controller (applicable for been fully (applicable for announcement
business been fully transferred to the total
business related-party
combinations transferred profit (%)
combinations transactions)
under the
not under the
same control)
same control)
ZIBO
The
LUCHENG 27 units/sets
Company’s
TEXTILE of spinning 6 Jun. 2012 481.11 Yes Fair price Yes Yes 8 Jun. 2012
parent
INVESTMEN equipments
company
T CO., LTD.
Notes to purchase of assets:
The Company held the 21st Session of the 6th Board of Directors on 6 Jun. 2012, at which the proposal on the Company’s controlled subsidiary Zibo Luqun Textile Co., Ltd.
purchasing 27 units/sets of spinning equipments owned by the parent company of the Company was reviewed and approved. Up to 30 May 2012, the net carrying amount of
these equipments was RMB 4,811,056.27, which was made the price for the asset transfer and paid in cash. Independent directors gave consent to the said proposal and
expressed their independent opinion before it was submitted to the board for voting.
2. Sale of assets
√Applicable □Inapplicable
28
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Net profit Ratio of the Relationship
Whether or
contributed by net profit between the
not the Whether or
the asset from not the contributed to transaction Disclosure
Transaction Gain/loss on Related-party ownership of
Transaction the Pricing creditor’s right the Company party and the date of the
Asset sold Date of sale price (RMB sale (RMB transaction or the asset and liabilities
party period-begin principle involved have by the asset Company first interim
Ten thousand) Ten thousand) not involved has
to the date of been fully sale to the (applicable for announcement
been fully transferred
sale (RMB total profit related-party
transferred
Ten thousand) (%) transactions)
13.64% equity
interests of Controlled
Zibo Limin
Zibo Limin Net audited subsidiary of
Purified Water 23 Apr. 2012 95.1 -54.9 Yes No No 25 Apr. 2012
Wall Co., Ltd. value the parent
Co., Ltd.
held by the company
Company
Notes to sale of assets:
The Company held the 30th Session of the 6th Board of Directors on 23 Apr. 2012, at which the proposal on transferring the 13.64% equity interests of Zibo Limin Wall Co.,
Ltd. held by the Company to Zibo Limin Purified Water Co., Ltd. was reviewed and approved. As audited by RSM China Certified Public Accountants, the net assets of
Limin Wall as at 2011 valued RMB 6,971,900 and the corresponding equities valued RMB 951,000, which was made the price for the equity transfer and paid in cash.
Independent directors gave consent to the said proposal and expressed their independent opinion before it was submitted to the board for voting.
3. Exchange of assets
□Applicable √Inapplicable
29
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
4. Business combination
□Applicable √Inapplicable
5. Progress of these events after the publication of the assets reorganization report or public notices on the
purchases or sales of assets, as well as the influences of these events on the operation results and financial status
of the Company in this reporting period
√Applicable □Inapplicable
1. The Company held the 20th Session of the 6th Board of Directors on 23 Apr. 2012, at which the proposal on
transferring the 13.64% equity interests of Zibo Limin Wall Co., Ltd. held by the Company to Zibo Limin Purified
Water Co., Ltd. was reviewed and approved. And the transfer price was received in full amount on 2 May 2012.
Currently, the relevant equity registration change formalities are being dealt with. The purpose of the said
related-party transaction is mainly to reduce the external investment loss of the Company, which will not affect
the operating results and financial positions in the reporting period or the future.
2. The Company held the 21st Session of the 6th Board of Directors on 6 Jun. 2012, at which the proposal on the
Company’s controlled subsidiary Zibo Luqun Textile Co., Ltd. purchasing 27 units/sets of spinning equipments
owned by the parent company of the Company was reviewed and approved. The asset transfer formality was
completed in the reporting period. The purpose of the said related-party transaction is mainly to reduce
related-party transactions, which will not produce any major influence on the Company’s financial position or
operating results.
(VII) Explanation on shareholding increase scheme during the reporting period proposed or
implemented by the principal shareholders and act-in-concert persons
□Applicable √Inapplicable
(VIII) Implementation situation and influence of equity incentive plan of the Company
√Applicable □Inapplicable
GMs, vice GMs, senior executives, core management staff, core technical and
Incentive receivers in the reporting period
business staff
Total equities granted in the reporting period
0.00
(share)
Total equities exercised in the reporting period
0.00
(share)
Total equities that expired in the reporting period
0.00
(share)
Cumulative equities granted but not yet
exercised by the end of the reporting period 14,090,000.00
(share)
30
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Cumulative equities granted and exercised by
0.00
the end of the reporting period (share)
Adjustments to the granting and exercise prices
in the reporting period and the prices after
adjustments
Equities received and exercised by directors, supervisors and senior management staff
Equities not yet exercised
Equities received in the Equities exercised in the
Name Office title in the reporting period
reporting period (share) reporting period (share)
(share)
0.00 0.00 0.00
Share capital changes due to the exercise of the
Naught
incentive receivers
The fair value of the restricted shares granted by the Company was subject to the
Fair value measurement of equity tools
closing A-share price one day before the granting day.
Model, parameters and selection criteria adopted
Naught
for the estimation technique
Amortization period and result of the fair value
Naught
of equity tools
(IX) Significant related-party transactions
31
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
1. Related-party transactions relevant to routine operation
√ Applicable □ Inapplicable
Reason for
significant
Pricing Proportion in Settlement
Type of the Content of the Transaction Transaction Influence on Market price difference
principle of the same kind of method of the
Related party Relationship related-party related-party price (RMB amount (RMB the profits of (RMB Ten between the
related-party transactions related-party
transaction transaction Ten thousand) Ten thousand) the Company thousand) transaction
transaction (%) transaction
price and the
market price
A
Purchase of
Zibo Limin wholly-funded
goods/acceptan Sewage Settlement in
Purified Water subsidiary of Market price 330.22 330.22 100% 330.22
ce of labor treatment cash
Co., Ltd. the Company’s
service
parent company
A controlled Sale of
Zibo
subsidiary of goods/renderin Settlement in
Chengshun Thermal power Market price 321.08 321.08 3.4% 321.08
the Company’s g of labor cash
Power Co., Ltd.
parent company service
Total -- -- 651.3 -- -- -- --
Details of large amount of sales returns Naught
Necessity and continuity of related-party transaction as well as
1. Zibo Limin Purified Water Co., Ltd. provided necessary sewage treatment for the Company. 2. Zibo Chengshun Power Co., Ltd.
reason of choosing the related party (but not other transaction
got thermal power supply from Xinsheng Thermal Power, the Company’s controlled subsidiary.
parties) to conduct the said transaction
Impacts of related-party transaction on independency of the These related-party transactions only accounted for a small proportion in the Company’s purchase and sale amount, so they wouldn’t
Company affect the Company’s independency.
1. Zibo Limin Purified Water Co., Ltd. is the main sewage treatment enterprise in the place where the Company is located and the
Dependant degree of the Company on related party and relevant
Company 100% depends on it in this respect. 2. Zibo Chengshun Power Co., Ltd. is a thermal power provider in the place where the
solutions for the dependence (if any)
Company is located and it 100% depends on Xinsheng Thermal Power—the Company’s controlled subsidiary—in this respect.
32
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
As for the prediction on the total amount of routine related-party
transactions to be occurred in the reporting period by relevant Naught
types, the actual performance in the reporting period
Explanation on related-party transaction Naught
Related-party transactions relevant to routine operation
Selling products and providing labor services to related parties Purchasing products and receiving labor services from related parties
Related party Transaction amount (RMB Ten Proportion in same kind of Transaction amount (RMB Ten Proportion in same kind of
thousand) transactions (%) thousand) transactions (%)
Lucheng Textile 46.82 0.02% 494.8 1.26%
Limin Purified Water 8.45 0.01% 330.22 1.36%
Stanluian Company 2.01 0.21% 14.36 0.43%
Taimei Ties 0.93 0.11% 84.43 0.49%
Chengshun Power 321.08 3.4%
Total 379.29 923.81
Of which, the funds provided by the Company for the controlling shareholder and its subsidiaries stood at RMB 3,772,800 for the reporting period.
2. Related-party transactions regarding purchase and sales of assets
√ Applicable □ Inapplicable
Reason for
Influence on
any big
Carrying Estimated the
difference Gain on the
Type of the amount of the value of the Market fair Transfer price Company’s
Contents of Pricing between Method of asset transfer
Related party Relationship related-party transferred transferred value (RMB (RMB Ten operating
the transaction principle transfer price settlement (RMB Ten
transaction asset (RMB asset (RMB Ten thousand) thousand) results and
and carrying thousand)
Ten thousand) Ten thousand) financial
amount/estima
situation
ted value
Zibo Limin A Sale of equity 13.64% equity As audited by 95.1 95.1 95.1 95.1 Naught In cash The purpose
33
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Purified Water wholly-funded interests interests of RSM China of the said
Co., Ltd. subsidiary of Zibo Limin Certified related-party
the Wall Co., Ltd. Public transaction is
Company’s held by the Accountants, mainly to
parent Company the net assets reduce the
company were of Limin Wall external
transferred to as at 2011 investment
Zibo Limin valued RMB loss of the
Purified Water 6,971,900 and Company,
Co., Ltd. the which will not
corresponding affect the
equities operating
valued RMB results and
951,000. financial
positions in
the reporting
period or the
future.
The purpose
Up to 30 May
The Company of the said
2012, the net
acquired 27 related-party
carrying
Zibo Lucheng The units/sets of transaction is
amount of
Textile Company’s Acquisition of spinning mainly to
these 481.11 481.11 481.11 481.11 Naught In cash
Investment parent assets equipments reduce
equipments
Co., Ltd. company from the related-party
was made the
parent transactions,
price for the
company. which will not
asset transfer.
produce any
34
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
major
influence on
the
Company’s
financial
position or
operating
results.
3. Significant related-party transitions with joint investments
□ Applicable √ Inapplicable
4. Significant credits and liabilities with related parties
√ Applicable □ Inapplicable
Is there any non-operating credit or liability with any related party?
√ Yes □ No
Funds provided by the Company to the related party (RMB Ten Funds provided by the related party to the Company (RMB Ten
thousand) thousand)
Related-party Relationship
Opening Incurred Repaid Closing Interest Interest Opening Incurred Repaid Closing Interest Interest
balance amount amount balance income cost balance amount amount balance income cost
For non-operating purposes:
The Company’s
Lucheng Textile 2,090 2,090
parent company
A controlled
Taimei Ties 265 265
subsidiary of the
35
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Company’s parent
company
Related party (share
Stanluian Company the same chairman 219 219
with the Company)
A controlled
subsidiary of the
Chengshun Power 300 230 70
Company’s parent
company
Subtotal 2,574 300 230 2,644
For operating purposes:
Subtotal
Total 2,574 300 230 2,644
Funds provided by the Company to the controlling shareholder and
0
its subsidiaries in the reporting period (RMB Ten thousand)
Of which: amount incurred for non-operating purposes (RMB Ten
thousand)
Balance of the funds provided by the Company to the controlling
0
shareholder and its subsidiaries (RMB Ten thousand)
Of which: Balance for non-operating purposes (RMB Ten
thousand)
Liabilities with related parties are all loans of the Company’s controlled subsidiary—Zibo Luqun Textile Co., Ltd. borrowed from
Reason for any credit or liability with the related party
the Company and its controlled subsidiaries to supplement current funds.
Debt-clearing progress of the credit or liability with the related In the reporting period, Zibo Luqun Textile Co., Ltd. has paid back RMB 2.3 million to the Company’s controlled
party subsidiary—Chengshun Heating, then the balance of related-party loan at period-end stood at RMB 26.44 million.
Commitments made about the credit or liability with the related
party
36
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Influence of the credit or liability with the related party on the
Company’s operating results and financial position
Capital occupation during the reporting period and debt-clearing progress
□Applicable √Inapplicable
The accountability plan put forward by the Board of Directors when the Company had not completed collecting the capital occupied for non-operating purposes by the end
of the reporting period
□Applicable √Inapplicable
37
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
5. Other significant related-party transactions
(X) Significant contracts and execution
1. The trust, contract and lease whose profits reaching more than 10% (including 10%) of the total profits
of the Company in the reporting period
(1) Status of trust
□Applicable √Inapplicable
（2）Particulars about contracting
□Applicable √Inapplicable
（3）Particulars about leasing
□Applicable √Inapplicable
2. Guarantees provided by the Company
√ Applicable □ Inapplicable
Unit: RMB Ten thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosure Guarante
Actual
date of Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
Total external guarantee line Total actual occurred amount
approved during the reporting of external guarantee during
period (A1) the reporting period (A2)
Total external guarantee line that Total actual external guarantee
has been approved at the end of balance at the end of the
the reporting period (A3) reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure Guarante
Actual
date of Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
Lufeng Weaving & 23 May 30,000 10 May 2011 2,482.6 Warranty Ends since No Yes
38
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Dyeing Co., Ltd. 2011 the actual
occurrence
of the loans
within the
credit line
Total guarantee line approved for Total actual occurred amount
the subsidiaries during the of guarantee for the
30,000 612.89
reporting period subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has been
Total actual guarantee balance
approved for the subsidiaries at
30,000 for the subsidiaries at the end 2,482.6
the end of the reporting period
of the reporting period (B4)
(B3)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total guarantee line approved Total actual occurred amount
during the reporting period 30,000 of guarantee during the 612.89
(A1+B1) reporting period (A2+B2)
Total guarantee line that has been
Total actual guarantee balance
approved at the end of the
30,000 at the end of the reporting 2,482.6
reporting period
period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net assets
0.48%
of the Company
Of which:
Amount of guarantee for shareholders, actual controller and
0
related parties (C)
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 0
indirectly (D)
Part of the amount of the total guarantee over 50% of net assets
0
(E)
Total amount of the above three guarantees (C+D+E) 0
According to the Counter-guarantee Agreement signed between
the Company and Lufeng on 12 May 2011, Lufeng, the guaranteed
party, provided a counter guarantee at the same amount for the
Explanation on possible bearing joint responsibility of
Company. The decision-making procedure for the said guarantee
liquidation due to immature guarantee
provided by the Company for its controlled subsidiary was legal,
with no harm done to interests of the Company and its
shareholders, especially minority shareholders.
Explanation on provision of guarantees for external parties in The Company did not provide any external guarantee that violated
violation of the prescribed procedure any rule.
39
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
3. Entrusted financial management
□Applicable √Inapplicable
40
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
4. Performance of significant contracts relevant to routine operation
5. Other significant contracts
√ Applicable □ Inapplicable
(XI) Explanation on issuing corporate bonds
□Applicable √Inapplicable
(XII) Performance of commitments
1. Commitments made by the Company or shareholders holding over 5% of the Company’s
shares in the reporting period, or such commitments carried down into the reporting period
√ Applicable □ Inapplicable
Time for
Commitment Commitment
Commitment Contents making the Execution
maker period
commitment
Zibo Lucheng
Lucheng
will not reduce
fulfilled the
its shareholding
commitment of
within 60
Zibo Lucheng increasing its
months after
will not reduce shareholding
share merger
its shareholding with the
reform and,
within 60 dividends it
within 24
months after received in 2005
months after
share merger and 2006. The
that, the price of
reform and, total profit for
selling holding
within 24 2008 went up
Zibo Lucheng shares shall not
months after 58.06% over
Textile be lower than
Commitments made in a share reform 12 Jun. 2006 that, the price of 2005. Up to 12
Investment Co., RMB 15 per
selling holding Jun. 2011, the
Ltd. share (if the
shares shall not trading
share capital
be lower than moratorium on
changes,
RMB 15 per the 98,358,000
ex-rights will be
share (if the shares held by
conducted); it
share capital Lucheng
proposed and
changes, expired, which
voted for a cash
ex-rights will be became tradable
distribution not
conducted) on 24 Jun. 2011.
lower than 50%
No shareholding
of the profit
decrease has
available for
taken place yet.
distribution in
41
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
the year at the
2006
Shareholders’
General Meeting
and 2007
Shareholders’
General
Meeting; it will
increase the LU
THAI A shares
held by it
through trading
at the secondary
market with the
dividends
received in 2005
and 2006, and
the increase of
the LU THAI A
shares held shall
be accomplished
within 12
months after the
dividend is
transferred to its
account. In
2008, the total
profit increased
by not less than
30% compared
with that in
2005.
Commitments made in an acquisition
Naught Naught Naught
report or report on equity changes
Commitments made in an asset exchange Naught Naught
The
150,000-Ingot
Top-grade Fine
Rainsed funds Combed Yarn
Lu Thai Textile
Commitments made in share issuance investment 19 Dec. 2008 Project, the
Co., Ltd.
projects 50-thousand
Ingot
Two-for-one
Twisting
42
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Production Line
Project, the
Project for
Supplementing
the Working
Capital and the
Production Line
Project for
10-million-mete
r Top-grade
Jacquard
Fabrics for
Women’s Wear
among raised
funds
investment
projects have
been completed.
On 18 Oct.
2011, as
reviewed and
approved at the
3rd Special
Shareholders’
General
Meeting for
2011, raised
funds of RMB
140 million for
the Marketing
Network
Development
Project were
transferred to a
new production
line project for
40-million
Meter top-grade
yarn-dyed
fabric. By the
end of the
reporting period,
the yarn-dyed
fabric project
43
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
had been
completed and
the Brand and
Marketing
Network
Development is
still going on.
Other commitments made for
minority shareholders of the Naught Naught Naught Naught
Company
Is the commitment fulfilled in time? √ Yes □ No □ Inapplicable
Detailed reason for failing to fulfill
Naught
and the next plan
Make commitments on the problems
of horizontal competition and
□Yes √No □Inapplicable
related-party transactions caused or
not?
Period for completing the
Naught
commitments
Solution Naught
Situation on fulfillment of
Naught
commitments
2. The Company’s assets or projects exist profitable prediction and the reporting period is in
such prediction period, it states the profits from the assets or projects reaching original
prediction and relevant reasons
□Applicable √Inapplicable
(XIII) Items of other comprehensive income
Unit: RMB Yuan
Items This reporting period Same period of last year
1. Profits/(losses) from available-for-sale financial assets
Less: Effects on income tax generating from available-for-sale
financial assets
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal
2. Interests in the investee entities’ other comprehensive income as per
equity method
Less: Effects on income tax generating from the interests in the
investee entities’ other comprehensive income as per equity method
Net amount transferred into profit and loss in the current period that
44
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
recognized into other comprehensive income in prior period
Subtotal
3. Profits/(losses) from cash flow hedging instrument
Less: Effects on income tax generating from cash flow hedging
instrument
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
The adjustment value that is the converted initial recognition amount of
arbitrage project
Subtotal
4. Converted amount of foreign currency financial statements 207,989.91 -715,557.69
Less: Net value of disposal of oversea operations that recognized into
current profit and loss
Subtotal 207,989.91 -715,557.69
5. Other 1,570,000.00
Less: Effects on income tax generating from the others that included
into other comprehensive income
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal 1,570,000.00
Total 207,989.91 854,442.31
(XIV) Particulars about researches, visits and interviews received in this
reporting period
Main discussion and
Time of reception Place of reception Way of reception Visitor type Visitor materials provided by the
Company
Deng Yafeng
from Shanghai
Reception Room of Hundun Basic information about
12 Jan. 2012 Field research Institution
the Company Daorang Asset the Company
Management
Co., Ltd.
Zhao Bin and
Zhao Duo from
Reception Room of Basic information about
12 Jan. 2012 Field research Institution Sealand
the Company the Company
Securities Co.,
Ltd.
Wang Bin and
Xu Wenfeng
Reception Room of Basic information about
12 Jan. 2012 Field research Institution from Rising
the Company the Company
Securities Co.,
Ltd.
45
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Zhou Ying and
Huang Ruiqing
Reception Room of from Caitong Basic information about
12 Jan. 2012 Field research Institution
the Company Fund the Company
Management
Co., Ltd.
Dong Lanfeng
from Yinhua
Reception Room of Basic information about
19 Jan. 2012 Field research Institution Fund
the Company the Company
Management
Co., Ltd.
Jin Ge and Liu
Reception Room of Basic information about
2 Feb. 2012 Field research Institution Bing from
the Company the Company
CICC
Yuan Li and
Reception Room of Basic information about
15 Feb. 2012 Field research Institution Ma Tao from
the Company the Company
GF Securities
Shan Huijin
Reception Room of Basic information about
15 Feb. 2012 Field research Institution from
the Company the Company
ChinaAMC
Gao Yuanyuan
from ICBC
Reception Room of Credit Suisse Basic information about
15 Feb. 2012 Field research Institution
the Company Asset the Company
Management
Co., Ltd.
(XV) Particulars about engagement and disengagement of CPAs firm
Has this interim report been audited?
□ Yes √ No □ Inapplicable
Has the CPAs firm been changed?
□ Yes √ No □ Inapplicable
(XVI) Particulars about punishment and rectification order received by the
Company, its directors, supervisors, senior executives, shareholders, actual
controller and acquirer
□Applicable √Inapplicable
（XVII） Other significant events as well as analysis and explanations on their
impact and solutions
√Applicable □Inapplicable
Because the performance of its B-share price was not in line with its intrinsic value and leading
46
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
position in the industry, the Company’s investment value was underestimated, which not only
produced adverse impact on the Company’s image in the capital market, but also was not helpful
in protecting interests of shareholders. Therefore, the Company planned to buy back some
B-shares so as to increase public investors’ confidence in the Company, increase the Company’s
value and bring the Company’s value back to a rational level. On 8 Jun. 2012, the Company
disclosed the pre-plan for buying back some domestically listed foreign shares, which was later
reviewed and approved at the 2nd Special Shareholders’ General Meeting for 2012 held on 25 Jun.
2012. It was decided to, within 12 months since the buy-back resolution was made at the general
meeting, buy back domestically listed foreign shares (B-shares) not exceeding 100 million shares
with its self-owned funds. The bought-back shares would be written off as stipulated and the
registered capital would be reduced accordingly. The buy-back price would not be higher than
HK$ 7.73/share. Where the Company carries out bonus shares, turns capital reserve into share
capital or distributes cash dividends during the buy-back period, it shall adjust the upper limit of
the share buy-back price accordingly since the ex-dividend date. Currently, the Company is going
through necessary approval and record-keeping procedures.
(XVIII) Particulars about significant changes in the profitability, asset status and
credit status of the Company’s convertible bonds guarantor
□Applicable √Inapplicable
(XIX) Index for information disclosure
Internet website for disclosing
Newspapers for disclosing
Event Publishing date information and the searching
information and relevant page
approach
Securities Times, Shanghai
Announcement on Derivatives
Securities News and Ta Kung 17 Feb. 2012 http://www.cninfo.com.cn
Transaction Plan
Pao
Announcement on Resolutions Securities Times, Shanghai
th
Made at the 18 Session of the Securities News and Ta Kung 17 Feb. 2012 http://www.cninfo.com.cn
th
6 Board of Directors Pao
Notice on Convening the First Securities Times, Shanghai
Special Shareholders’ General Securities News and Ta Kung 17 Feb. 2012 http://www.cninfo.com.cn
Meeting fro Year 2012 Pao
Announcement on Resolutions
Securities Times, Shanghai
Made at the First Special
Securities News and Ta Kung 5 Mar. 2012 http://www.cninfo.com.cn
Shareholders’ General Meeting
Pao
for Year 2012
Securities Times, Shanghai
2011 Annual Report Securities News and Ta Kung 23 Mar. 2012 http://www.cninfo.com.cn
Pao
Summary of Annual Report Securities Times, Shanghai
23 Mar. 2012 http://www.cninfo.com.cn
2011 Securities News and Ta Kung
47
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Pao
Announcement on the Newly
Added 230-thousand Yarn Ingot Securities Times, Shanghai
and 35-thousand Ingot Securities News and Ta Kung 23 Mar. 2012 http://www.cninfo.com.cn
Two-for-one Twisting Pao
Production Line Project
Securities Times, Shanghai
Announcement on
Securities News and Ta Kung 25 Apr. 2012 http://www.cninfo.com.cn
Related-party Transactions
Pao
Securities Times, Shanghai
Report for the First Quarter of
Securities News and Ta Kung 25 Apr. 2012 http://www.cninfo.com.cn
2012
Pao
Announcement on Resolutions Securities Times, Shanghai
th
Made at the 20 Session of the Securities News and Ta Kung 25 Apr. 2012 http://www.cninfo.com.cn
6th Board of Directors Pao
Securities Times, Shanghai
Summary of Report for the
Securities News and Ta Kung 25 Apr. 2012 http://www.cninfo.com.cn
First Quarter of 2012
Pao
Announcement on Resolutions Securities Times, Shanghai
Made at the 2011 Annual Securities News and Ta Kung 28 Apr. 2012 http://www.cninfo.com.cn
Shareholders’ General Meeting Pao
Securities Times, Shanghai
Announcement on Share
Securities News and Ta Kung 2 May 2012 http://www.cninfo.com.cn
Trading Suspension
Pao
Announcement on Share
Securities Times, Shanghai
Trading Continue to be
Securities News and Ta Kung 9 May 2012 http://www.cninfo.com.cn
Suspended due to a Significant
Pao
Event
Announcement on Share
Securities Times, Shanghai
Trading Continue to be
Securities News and Ta Kung 16 May 2012 http://www.cninfo.com.cn
Suspended due to a Significant
Pao
Event
Announcement on Share
Securities Times, Shanghai
Trading Continue to be
Securities News and Ta Kung 23 May 2012 http://www.cninfo.com.cn
Suspended due to a Significant
Pao
Event
Announcement on Resolutions Securities Times, Shanghai
st
Made at the 21 Session of the Securities News and Ta Kung 8 Jun. 2012 http://www.cninfo.com.cn
th
6 Board of Directors Pao
Securities Times, Shanghai
Announcement on External
Securities News and Ta Kung 8 Jun. 2012 http://www.cninfo.com.cn
Investments
Pao
Announcement on Share Securities Times, Shanghai
8 Jun. 2012 http://www.cninfo.com.cn
Trading Resumption Securities News and Ta Kung
48
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Pao
Announcement on Convening
Securities Times, Shanghai
the Second Speical
Securities News and Ta Kung 8 Jun. 2012 http://www.cninfo.com.cn
Shareholders’ General Meeting
Pao
for 2012
Securities Times, Shanghai
Announcement on
Securities News and Ta Kung 8 Jun. 2012 http://www.cninfo.com.cn
Related-party Transactions
Pao
Suggestive Notice on
Securities Times, Shanghai
Convening the Second Special
Securities News and Ta Kung 15 Jun. 2012 http://www.cninfo.com.cn
Shareholders’ General Meeting
Pao
for 2012
Announcement on Securities Times, Shanghai
Implementing the Equity Securities News and Ta Kung 19 Jun. 2012 http://www.cninfo.com.cn
Distribution for Year 2011 Pao
Announcement on Particulars
Securities Times, Shanghai
about Shares Held by the Top
Securities News and Ta Kung 21 Jun. 2012 http://www.cninfo.com.cn
Ten Shareholders Issued by the
Pao
Board
Announcement on Repurchase
of the Domestically Listed
Securities Times, Shanghai
Foreign Shares (B-share) &
Securities News and Ta Kung 26 Jun. 2012 http://www.cninfo.com.cn
Decrease of Registered Capital
Pao
of the Company Issued by the
Board
Announcement on Resolutions
Securities Times, Shanghai
Made at the Second Special
Securities News and Ta Kung 26 Jun. 2012 http://www.cninfo.com.cn
Shareholders’ General Meeting
Pao
for 2012
VIII. Financial Report
(I) Auditor’s report
Has this semi-annual report been audited?
□ Yes √ No □ Inapplicable
(II) Financial statements
Consolidated statements or not?
√Yes □No □ Inapplicable
The monetary unit in the financial statements of the financial report is RMB Yuan if not specified
otherwise.
Monetary unit of notes to financial statements: RMB Yuan
1. Consolidated balance sheet
49
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Prepared by Lu Thai Textile Co., Ltd.
Unit: RMB Yuan
Item Note 30 Jun. 2012 31 Dec. 2011
Current Assets:
Monetary funds 439,679,107.11 811,148,146.93
Transactional financial assets 20,939,380.00
Notes receivable 108,276,877.73 160,499,797.76
Accounts receivable 209,965,750.36 201,327,903.05
Accounts paid in advance 172,417,224.27 304,469,373.14
Other accounts receivable 113,333,271.57 74,534,378.60
Financial assets purchased under
agreements to resell
Inventories 1,697,202,024.82 1,666,911,255.92
Non-current assets due within 1
year
Other current assets
Total current assets 2,740,874,255.86 3,239,830,235.40
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 67,442,600.00 68,942,600.00
Investing property
Fixed assets 4,094,928,492.85 3,486,072,973.42
Construction in progress 209,315,087.63 502,165,921.54
Engineering materials 40,801,965.90 39,746,597.82
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 326,141,695.51 309,099,281.13
R&D expense
Goodwill 20,613,803.29 20,563,803.29
Long-term deferred expenses 0.00 0.00
Deferred income tax assets 56,196,094.27 60,061,475.83
Other non-current assets 7,890,690.00 25,402,452.00
Total of non-current assets 4,823,330,429.45 4,512,055,105.03
Total assets 7,564,204,685.31 7,751,885,340.43
Current liabilities:
Short-term borrowings 1,101,618,199.90 1,151,414,422.38
Transactional financial liabilities 10,107,650.00 0.00
Notes payable 18,259,051.11 11,981,603.44
50
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Accounts payable 280,732,577.22 284,362,673.51
Accounts received in advance 67,258,743.80 91,026,359.71
Handling charges and
commissions payable
Employee’s compensation
339,082,493.21 435,106,415.39
payable
Tax payable -17,678,712.12 30,576,451.34
Interest payable 3,167,297.54 2,113,143.22
Dividend payable 4,387,509.44 442,309.44
Other accounts payable 114,801,633.29 110,780,795.92
Non-current liabilities due within
36,531,875.00 69,058,740.00
1 year
Other current liabilities
Total current liabilities 1,958,268,318.39 2,186,862,914.35
Non-current liabilities:
Long-term borrowings 0.00 12,675,030.00
Bonds payable
Long-term payables 9,735,560.00 9,735,560.00
Specific payables
Estimated liabilities
Deferred income tax liabilities 2,133,545.52 5,262,675.09
Other non-current liabilities 66,764,478.57 67,441,604.49
Total non-current liabilities 78,633,584.09 95,114,869.58
Total liabilities 2,036,901,902.48 2,281,977,783.93
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 1,008,954,800.00 1,008,954,800.00
Capital reserves 1,231,455,628.85 1,200,110,642.06
Less: Treasury stock
Specific reserves
Surplus reserves 515,895,752.76 515,895,752.76
Provisions for general risks
Retained profits 2,386,185,711.95 2,367,189,767.76
Foreign exchange difference -5,842,519.57 -6,050,509.48
Total equity attributable to owners
5,136,649,373.99 5,086,100,453.10
of the Company
Minority interests 390,653,408.84 383,807,103.40
Total owners’ (or shareholders’)
5,527,302,782.83 5,469,907,556.50
equity
Total liabilities and owners’ (or
7,564,204,685.31 7,751,885,340.43
shareholders’) equity
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
51
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Chief of the accounting division: Zhang Keming
2. Balance sheet of the Company
Unit: RMB Yuan
Item Note 30 Jun. 2012 31 Dec. 2011
Current Assets:
Monetary funds 268,644,073.54 443,347,389.73
Transactional financial assets 15,609,030.00
Notes receivable 82,540,660.36 123,468,955.42
Accounts receivable 230,510,354.83 286,596,629.41
Accounts paid in advance 337,164,842.79 390,452,279.69
Interest receivable
Dividend receivable
Other accounts receivable 66,028,034.54 36,382,500.69
Inventories 1,063,717,808.98 1,089,685,685.73
Non-current assets due within 1
year
Other current assets
Total current assets 2,048,605,775.04 2,385,542,470.67
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 1,066,995,189.90 1,063,495,189.90
Investing property
Fixed assets 2,467,205,136.25 2,216,930,369.90
Construction in progress 98,389,453.14 139,596,130.53
Engineering materials 37,800,914.13 37,171,903.43
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 194,483,473.54 176,687,021.73
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 32,432,109.67 30,180,069.34
Other non-current assets 7,890,690.00 25,402,452.00
Total of non-current assets 3,905,196,966.63 3,689,463,136.83
Total assets 5,953,802,741.67 6,075,005,607.50
Current liabilities:
Short-term borrowings 658,143,521.45 687,511,722.38
Transactional financial liabilities 9,088,700.00
52
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Notes payable 11,855,799.86 9,531,302.09
Accounts payable 160,514,291.44 91,559,699.03
Accounts received in advance 35,056,186.78 41,115,833.49
Employee’s compensation
298,369,435.12 379,732,952.85
payable
Tax payable 34,240,408.15 44,571,730.86
Interest payable 3,008,764.21 2,113,143.22
Dividend payable 4,387,509.44 442,309.44
Other accounts payable 17,696,321.66 16,585,657.28
Non-current liabilities due within
36,531,875.00 69,058,740.00
1 year
Other current liabilities
Total current liabilities 1,268,892,813.11 1,342,223,090.64
Non-current liabilities:
Long-term borrowings 12,675,030.00
Bonds payable
Long-term payables
Specific payables
Estimated liabilities
Deferred income tax liabilities 2,341,354.50
Other non-current liabilities 32,157,331.57 32,494,901.59
Total non-current liabilities 32,157,331.57 47,511,286.09
Total liabilities 1,301,050,144.68 1,389,734,376.73
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 1,008,954,800.00 1,008,954,800.00
Capital reserves 1,237,808,309.94 1,206,463,323.15
Less: Treasury stock
Specific reserves
Surplus reserves 515,895,752.76 515,895,752.76
Provisions for general risks
Retained profits 1,890,093,734.29 1,953,957,354.86
Foreign exchange difference
Total owners’ (or shareholders’)
4,652,752,596.99 4,685,271,230.77
equity
Total liabilities and owners’ (or
5,953,802,741.67 6,075,005,607.50
shareholders’) equity
3. Consolidated income statement
Unit: RMB Yuan
Item Note Jan.-Jun. 2012 Jan.-Jun. 2011
I. Total operating revenues 2,808,025,564.76 2,980,813,097.20
53
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Including: Sales income 2,808,025,564.76 2,980,813,097.20
Interest income
II. Total operating cost 2,455,925,494.34 2,377,593,417.11
Including: Cost of sales 2,055,106,728.52 1,966,770,465.74
Interest expenses
Taxes and associate charges 2,360,934.93 10,183,946.29
Selling and distribution
77,160,291.09 69,650,595.48
expenses
Administrative expenses 281,403,771.58 302,871,120.98
Financial expenses 36,737,830.95 24,919,948.09
Asset impairment loss 3,155,937.27 3,197,340.53
Add: Gain/(loss) from change in fair
-31,047,030.00 -20,628,986.72
value (―-‖ means loss)
Gain/(loss) from investment
19,052,638.49 40,469,067.77
(―-‖ means loss)
Including: share of profits in
0.00 0.00
associates and joint ventures
Foreign exchange gains (―-‖ means
loss)
III. Business profit (―-‖ means loss) 340,105,678.91 623,059,761.14
Add: non-operating income 20,152,942.07 16,132,647.68
Less: non-operating expense 2,142,808.56 11,270,150.47
Including: loss from non-current
626,520.62 8,210,095.87
asset disposal
IV. Total profit (―-‖ means loss) 358,115,812.42 627,922,258.35
Less: Income tax expense 49,766,218.79 102,778,942.74
V. Net profit (―-‖ means loss) 308,349,593.63 525,143,315.61
Including: Net profit achieved
by combined parties before the
combinations
Attributable to owners of the
301,503,288.19 491,647,065.96
Company
Minority shareholders’ income 6,846,305.44 33,496,249.65
VI. Earnings per share -- --
(I) Basic earnings per share 0.30 0.49
(II) Diluted earnings per share 0.30 0.49
Ⅶ. Other comprehensive incomes 207,989.91 854,442.31
Ⅷ. Total comprehensive incomes 308,557,583.54 525,997,757.92
Attributable to owners of the
301,711,278.10 492,501,508.27
Company
Attributable to minority
6,846,305.44 33,496,249.65
shareholders
Where business mergers under the same control occurred in this report period, the net profit
54
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
achieved by the merged parties before the business mergers was RMB ***.
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
4. Income statement of the Company
Unit: RMB Yuan
Item Note Jan.-Jun. 2012 Jan.-Jun. 2011
I. Total sales 2,196,615,482.05 2,446,037,080.40
Less: cost of sales 1,679,182,666.68 1,659,122,418.86
Business taxes and surcharges 159,138.51 7,016,584.58
Distribution expenses 29,947,686.71 24,526,783.77
Administrative expenses 206,316,526.48 234,105,097.30
Financial costs 15,578,093.65 3,962,671.65
Assets impairment loss 1,827,033.97 3,803,053.48
Add: gain/(loss) from change in fair
-24,697,730.00 -18,153,686.72
value (―-‖ means loss)
Gain/(loss) from investment (―-‖
14,455,234.49 198,590,067.77
means loss)
Including: income form investment
on associates and joint ventures
II. Business profit (―-‖ means loss) 253,361,840.54 693,936,851.81
Add: non-business income 10,435,142.29 4,367,494.26
Less: non-business expense 354,789.74 8,600,188.35
Including: loss from non-current
1,759.87 5,770,478.89
asset disposal
III. Total profit (―-‖ means loss) 263,442,193.09 689,704,157.72
Less: income tax expense 44,798,469.66 76,144,162.75
IV. Net profit (―-‖ means loss) 218,643,723.43 613,559,994.97
V. Earnings per share -- --
(I) Basic earnings per share 0.22 0.62
(II) Diluted earnings per share 0.22 0.62
VI. Other comprehensive income 1,570,000.00
VII. Total comprehensive income 218,643,723.43 615,129,994.97
5. Consolidated cash flow statement
Unit: RMB Yuan
Item Jan.-Jun. 2012 Jan.-Jun. 2011
I. Cash flows from operating activities:
Cash received from sale of
2,844,941,445.62 2,907,657,809.50
commodities and rendering of service
55
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Net increase of disposal of tradable
financial assets
Cash received from interest, handling
charges and commissions
Net increase of intra-group
borrowings
Net increase of funds in repurchase
business
Tax refunds received 75,614,471.46 137,376,748.67
Other cash received relating to
28,219,248.54 48,671,086.04
operating activities
Subtotal of cash inflows from operating
2,948,775,165.62 3,093,705,644.21
activities
Cash paid for goods and services 1,682,834,796.41 1,885,346,210.11
Cash paid to and for employees 569,733,755.88 497,151,067.50
Various taxes paid 142,705,722.41 156,133,413.22
Other cash payment relating to
136,461,423.46 126,505,702.48
operating activities
Subtotal of cash outflows from
2,531,735,698.16 2,665,136,393.31
operating activities
Net cash flows from operating activities 417,039,467.46 428,569,250.90
II. Cash flows from investing activities:
Cash received from withdrawal of
investments
Cash received from return on
investments
Net cash received from disposal of
fixed assets, intangible assets and other 1,129,634.61 1,441,308.55
long-term assets
Net cash received from disposal of
951,000.00
subsidiaries or other business units
Other cash received relating to
22,371,353.29 43,850,591.47
investing activities
Subtotal of cash inflows from
24,451,987.90 45,291,900.02
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 421,406,791.09 179,444,420.85
assets
Cash paid for investment
Net increase of pledged loans
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to 0.00 0.00
56
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
investing activities
Subtotal of cash outflows from
421,406,791.09 179,444,420.85
investing activities
Net cash flows from investing activities -396,954,803.19 -134,152,520.83
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings 698,875,287.78 737,509,387.29
Cash received from issuance of
bonds
Other cash received relating to
3,000,000.00 87,790,000.00
financing activities
Subtotal of cash inflows from financing
701,875,287.78 825,299,387.29
activities
Repayment of borrowings 796,047,762.80 762,214,009.23
Cash paid for interest expenses and
295,918,261.39 263,058,159.37
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority shareholders
Other cash payments relating to
2,300,000.00 13,460,000.00
financing activities
Sub-total of cash outflows from
1,094,266,024.19 1,038,732,168.60
financing activities
Net cash flows from financing activities -392,390,736.41 -213,432,781.31
IV. Effect of foreign exchange rate
837,032.32 -1,063,249.79
changes on cash and cash equivalents
V. Net increase in cash and cash
-371,469,039.82 79,920,698.97
equivalents
Add: Opening balance of cash and
811,148,146.93 522,955,236.37
cash equivalents
VI. Closing balance of cash and cash
439,679,107.11 602,875,935.34
equivalents
6. Cash flow statement of the Company
Unit: RMB Yuan
Item Jan.-Jun. 2012 Jan.-Jun. 2011
I. Cash flows from operating activities:
Cash received from sale of
2,266,873,036.21 2,355,123,348.10
commodities and rendering of service
57
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Tax refunds received 44,706,953.12 107,772,367.45
Other cash received relating to
10,105,529.44 29,124,826.60
operating activities
Subtotal of cash inflows from operating
2,321,685,518.77 2,492,020,542.15
activities
Cash paid for goods and services 1,324,874,812.92 1,571,780,676.70
Cash paid to and for employees 434,380,999.92 388,412,338.02
Various taxes paid 64,907,965.96 96,261,008.25
Other cash payment relating to
75,107,632.03 60,275,376.56
operating activities
Subtotal of cash outflows from
1,899,271,410.83 2,116,729,399.53
operating activities
Net cash flows from operating activities 422,414,107.94 375,291,142.62
II. Cash flows from investing activities:
Cash received from retraction of
investments
Cash received from return on
investments
Net cash received from disposal of
fixed assets, intangible assets and other 729,634.61 1,435,553.94
long-term assets
Net cash received from disposal of
951,000.00
subsidiaries or other business units
Other cash received relating to
16,817,374.57 36,611,151.54
investing activities
Subtotal of cash inflows from
18,498,009.18 38,046,705.48
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 253,161,722.71 99,193,611.36
assets
Cash paid for investment 5,000,000.00
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
258,161,722.71 99,193,611.36
investing activities
Net cash flows from investing activities -239,663,713.53 -61,146,905.88
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings 277,649,521.46 277,825,850.55
58
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Cash received from shares issued
Other cash received relating to
82,790,000.00
financing activities
Subtotal of cash inflows from financing
277,649,521.46 360,615,850.55
activities
Repayment of borrowings 353,580,376.87 312,316,771.73
Cash paid for interest expenses and
281,725,956.67 252,267,176.13
distribution of dividends or profit
Other cash payments relating to
financing activities
Sub-total of cash outflows from
635,306,333.54 564,583,947.86
financing activities
Net cash flows from financing activities -357,656,812.08 -203,968,097.31
IV. Effect of foreign exchange rate
203,101.48 -258,381.63
changes on cash and cash equivalents
V. Net increase in cash and cash
-174,703,316.19 109,917,757.80
equivalents
Add: Opening balance of cash and
443,347,389.73 280,772,869.89
cash equivalents
VI. Closing balance of cash and cash
268,644,073.54 390,690,627.69
equivalents
7. Consolidated statement of changes in owners’ equity
Reporting period
Unit: RMB Yuan
Reporting period
Equity attributable to owners of the Company
Paid-up
Total
Item capital Less: General Minority
Capital Specific Surplus Retaine owners’
(or treasury risk Others interests
reserve reserve reserve d profit equity
share stock reserve
capital)
I. Balance at the end of the 1,008,9
1,200,11 515,895 2,367,18 -6,050,5 383,807,1 5,469,907,
previous year 54,800.
0,642.06 ,752.76 9,767.76 09.48 03.40 556.50
00
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of 1,008,9 1,200,11 515,895 2,367,18 -6,050,5 383,807,1 5,469,907,
the year 54,800. 0,642.06 ,752.76 9,767.76 09.48 03.40 556.50
59
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
00
III. Increase/ decrease of
31,344,9 18,995,9 207,989. 6,846,305 57,395,226
amount in the year (―-‖ means
86.79 44.19 91 .44 .33
decrease)
301,503, 6,846,305 308,349,59
(I) Net profit
288.19 .44 3.63
(II) Other comprehensive 207,989.
207,989.91
incomes 91
301,503, 207,989. 6,846,305 308,557,58
Subtotal of (I) and (II)
288.19 91 .44 3.54
(III) Capital paid in and 31,344,9 31,344,986
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners 86.79 .79
1. Capital paid in by
owners
2. Amounts of share-based
31,344,9 31,344,966
payments recognized in
66.24 .24
owners’ equity
3. Others 20.55 20.55
-282,50 -282,507,3
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
7,344.00 44.00
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to -282,50 -282,507,3
owners (or shareholders) 7,344.00 44.00
4. Other
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
60
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
1,008,9
1,231,45 515,895 2,386,18 -5,842,5 390,653,4 5,527,302,
IV. Closing balance 54,800.
5,628.85 ,752.76 5,711.95 19.57 08.84 782.83
00
Last year
Unit: RMB Yuan
Last year
Equity attributable to owners of the Company
Paid-up
Total
Item capital Less: General Minority
Capital Specific Surplus Retaine owners’
(or treasury risk Others interests
reserve reserve reserve d profit equity
share stock reserve
capital)
I. Balance at the end of the
994,864 1,130,44 428,440 1,854,83 -4,447,8 337,463,6 4,741,597,
previous year
,800.00 2,805.12 ,485.70 3,169.63 46.98 82.54 096.01
Add: retrospective
adjustments due to business
combinations under the same
control
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of 994,864 1,130,44 428,440 1,854,83 -4,447,8 337,463,6 4,741,597,
the year ,800.00 2,805.12 ,485.70 3,169.63 46.98 82.54 096.01
III. Increase/ decrease of
14,090, 69,667,8 87,455, 512,356, -1,602,6 46,343,42 728,310,46
amount in the year (―-‖ means
000.00 36.94 267.06 598.13 62.50 0.86 0.49
decrease)
848,528, 43,543,15 892,071,21
(I) Net profit
065.19 1.22 6.41
(II) Other comprehensive -1,602,6 -1,602,662.
incomes 62.50 50
848,528, -1,602,6 43,543,15 890,468,55
Subtotal of (I) and (II)
065.19 62.50 1.22 3.91
(III) Capital paid in and 14,090, 69,667,8 57,800,26 141,558,10
0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners 000.00 36.94 9.64 6.58
1. Capital paid in by 14,090, 56,712,6 57,800,26 128,602,92
owners 000.00 54.47 9.64 4.11
2. Amounts of share-based
20,896,6 20,896,644
payments recognized in
44.16 .16
owners’ equity
-7,941,4 -7,941,461.
3. Others
61.69 69
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
87,455, -336,17 -55,000,0 -303,716,2
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00
267.06 1,467.06 00.00 00.00
1. Appropriations to 87,455, -87,455,
surplus reserves 267.06 267.06
2. Appropriations to
general risk provisions
3. Appropriations to -248,71 -55,000,0 -303,716,2
owners (or shareholders) 6,200.00 00.00 00.00
4. Other
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
1,008,9
1,200,11 515,895 2,367,18 -6,050,5 383,807,1 5,469,907,
IV. Closing balance 54,800.
0,642.06 ,752.76 9,767.76 09.48 03.40 556.50
00
8. Statement of changes in owners’ equity of the Company
Reporting period
Unit: RMB Yuan
Reporting period
Paid-up
Less: General Total
Item capital (or Capital Specific Surplus Retained
treasury risk owners’
share reserve reserve reserve profit
stock reserve equity
capital)
I. Balance at the end of the
1,008,954, 1,206,463, 515,895,75 1,953,957, 4,685,271,
previous year
800.00 323.15 2.76 354.86 230.77
Add: change of accounting
policy
Correction of errors in
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
previous periods
Other
II. Balance at the beginning of 1,008,954, 1,206,463, 515,895,75 1,953,957, 4,685,271,
the year 800.00 323.15 2.76 354.86 230.77
III. Increase/ decrease of amount 31,344,986 -63,863,62 -32,518,63
in the year (―-‖ means decrease) .79 0.57 3.78
218,643,72 218,643,72
(I) Net profit
3.43 3.43
(II) Other comprehensive
incomes
218,643,72 218,643,72
Subtotal of (I) and (II)
3.43 3.43
(III) Capital paid in and 31,344,986 31,344,986
0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners .79 .79
1. Capital paid in by owners
2. Amounts of share-based
31,344,966 31,344,966
payments recognized in owners’
.24 .24
equity
3. Others 20.55 20.55
-282,507,3 -282,507,3
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00
44.00 44.00
1. Appropriations to surplus
reserves
2. Appropriations to general
risk provisions
3. Appropriations to owners -282,507,3 -282,507,3
(or shareholders) 44.00 44.00
4. Other
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
1,008,954, 1,237,808, 515,895,75 1,890,093, 4,652,752,
IV. Closing balance
800.00 309.94 2.76 734.29 596.99
Last year
Unit: RMB Yuan
Last year
Paid-up
Less: General Total
Item capital (or Capital Specific Surplus Retained
treasury risk owners’
share reserve reserve reserve profit
stock reserve equity
capital)
I. Balance at the end of the
994,864,80 1,127,872, 428,440,48 1,415,576, 3,966,753,
previous year
0.00 338.27 5.70 151.29 775.26
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of 994,864,80 1,127,872, 428,440,48 1,415,576, 3,966,753,
the year 0.00 338.27 5.70 151.29 775.26
III. Increase/ decrease of amount 14,090,000 78,590,984 87,455,267 538,381,20 718,517,45
in the year (―-‖ means decrease) .00 .88 .06 3.57 5.51
874,552,67 874,552,67
(I) Net profit
0.63 0.63
(II) Other comprehensive
incomes
874,552,67 874,552,67
Subtotal of (I) and (II)
0.63 0.63
(III) Capital paid in and 14,090,000 78,590,984 92,680,984
0.00 0.00 0.00 0.00 0.00
reduced by owners .00 .88 .88
14,090,000 56,712,250 70,802,250
1. Capital paid in by owners
.00 .00 .00
2. Amounts of share-based
20,896,644 20,896,644
payments recognized in owners’
.16 .16
equity
3. Others 982,090.72 982,090.72
87,455,267 -336,171,4 -248,716,2
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00
.06 67.06 00.00
1. Appropriations to surplus 87,455,267 -87,455,26
reserves .06 7.06
2. Appropriations to general
risk provisions
3. Appropriations to owners -248,716,2 -248,716,2
(or shareholders) 00.00 00.00
4. Other
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
1,008,954, 1,206,463, 515,895,75 1,953,957, 4,685,271,
IV. Closing balance
800.00 323.15 2.76 354.86 230.77
(III) Company Profile
Lu Thai Textile Co., Ltd. (hereinafter referred to as the Company) is a joint venture invested by
Zibo Lucheng Textile Investment Co., Ltd (originally named Zibo Lucheng Textile Co., Ltd,
hereinafter referred to as Lucheng Textile) and Thailand Tailun Textile Co., Ltd. On Feb. 3, 1993,
the Company is approved by the former Ministry of Foreign Trade and Economy of the State
(1993) in WJMZEHZ No. 59 to convert into a joint-stock enterprise. Zibo Administration for
Industry and Commerce issued the Company corporate business license with the registration No.
of QGLZZZ No. 000066. In July 1997, the Company is approved by the Securities Committee of
the Department of the State in the ZWF (1997) No. 47 to issue 80 million shares of domestically
listed foreign share( B-shares) at the price of RMB 1.00 per share. Upon approved by Shenzhen
Stock Exchange with No. (1997) 296 Listing Notice, the Company is listed on the Shenzhen Stock
Exchange on August 19, 1997 with B-shares stock code of 200726. On November 24, 2000,
approved by ZJGSZ [2000] No.199 by CSRC, the Company increased publication of 50 million
shares of general share (A-shares) at the book value of RMB 1.00, which are listed on the
Shenzhen Stock Exchange on December 25, 2000 with A-shares stock code of 000726 through
approval by Shenzhen Stock Exchange with No. (2000) 162 Listing Notice. As approved by 2000
Shareholders’ General Meeting in May, 2001, the Company carried out the distribution plan that
10 shares of capital public reserve are converted to 3 more shares for each 10 shares. As approved
by Resolutions of 2001 Shareholders’ General Meeting in June 2002, the Company implemented
the distribution plan that 10 shares of capital public reserve are converted 3 more shares for each
10 shares again. As approved by 2002 Shareholders’ General Meeting in May 2003, the Company
implemented the distribution plan that 10 shares of capital public reserve are 2 more shares for
each 10 shares, and inner employees’ shared increased to 40.56 million shares. As examined and
approved by ZJGSZ No. [2000] 199 of CSRC, the inner employees’ shares will start circulation 3
years later since listing on the A-share market. On Dec. 25, 2003, the inner employees’ shares
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
reach 3 years since listing on the A-share stock market, and they set out circulation on Dec.26,
2003. As approved by the Shareholders’ General Meeting 2006 held in June 2007, the Company
implemented the plan on converting 10 shares to all its shareholders with capital reserves for
every 10 shares. After capitalization, the registered capital of the Company was RMB 844.8648
million. The Company, in accordance with the official reply on approving Lu Thai Textile Co.,
Ltd. to issue additional shares (ZJXK [2008] No. 890 document) from CSRC, issued the Renminbi
common shares (A shares) amounting to 150 million shares on 8 Dec. 2008. According to the
relevant resolution of the 2nd Special Shareholders’ General Meeting for 2011, the relevant
resolution of the 15th Session of the 6th Board of Directors, the Opinion of China Securities
Regulatory Commission on the Restricted Share Incentive Plan of Lu Thai Textile Co., Ltd.
(Shang-Shi-Bu-Han [2011] No. 206), the Company applied for a registered capital increment of
RMB 14.09 million, which was contributed by restricted share incentive receivers with monetary
funds. As at 30 Jun. 2012, the Company’s registered capital was RMB 1,008,954,800.
The Company’s registered address: No. 11, Mingbo Road, Hi-tech Development Zone, Zibo,
Shandong
The Company’s legal representative: Liu Shizhen
The Company’s business scope includes production of cotton yarn, yarn dyed fabrics, shirts,
fashion accessories, health underwear and other textile products and their mating products;
domestic and overseas sale of the Company’s self-produced products and provision of after-sales
services; acquisition and export of products not under exclusive rights or quota licenses; and hotel,
guesthouses and catering services.
The Company’s financial statements have been approved for issue by the Board of Directors of
the Company on 13 Aug. 2012.
(IV) Main accounting policies and estimates and corrections of previous
accounting errors
1. Basis for the preparation of financial statements
With the going-concern assumption as the basis, the Company and its subsidiaries (jointly referred
to as ―the Group‖ hereafter) prepared its financial statements in light of the actual transactions and
events, as well as the Basic Standard and 38 specific standards of Accounting Standards for
Business Enterprises issued by the Ministry of Finance of the PRC on 15 Feb. 2006, the
Application Guidance of Accounting Standards for Business Enterprises, the Interpretation of
Accounting Standards for Business Enterprises and other regulations issued thereafter (jointly
referred to as ―the Accounting Standards for Business Enterprises‖), and the Rules for Preparation
Convention of Disclosure of Public Offering Companies No.15—General Regulations for
Financial Reporting (revised in 2010) by China Securities Regulatory Commission (CSRC).
In accordance with the Accounting Standards for Business Enterprises, accounting activities of the
Group were conducted on the accrual basis. Except for some financial instruments, the financial
statements were prepared on the basis of historical costs. Where impairment occurred in an asset,
the corresponding impairment provision was withdrawn according to relevant rules.
2. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements for the reporting period prepared by the Group are in compliance with the
requirements of the Accounting Standards for Business Enterprises, factually and completely
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
presenting the Company’s and the Group’s financial positions as at 30 Jun. 2012, and operating
results, cash flows and other relevant information in Jan.-Jun. 2012. Furthermore, these financial
statements, in all material respects, are also in line with relevant disclosure requirements for
financial statements and notes thereof stipulated in the Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15—General Regulations for Financial Reporting
(revised in 2010) by CSRC.
3. Fiscal period
The Group’s accounting periods are divided into annual periods (yearly) and interim periods. The
interim period is a reporting period which is shorter than a full fiscal year. Gregorian calendar is
adopted for fiscal year of the Company, namely from 1 Jan. to 31 Dec. every year.
4. Recording currency
Renminbi (RMB) is the prevailing currency used in the main economic circumstances of the
Company and its domestic subsidiaries. The Company and its domestic subsidiaries adopt RMB as
the recording currency. When preparing the financial statements for the reporting period, the
Group adopted RMB as the recording currency.
In light of the prevailing currency used in their main economic circumstances of the Company’s
overseas subsidiaries, they adopt the Hong Kong dollars as the recording currency. When
preparing the financial statements for the reporting period, the Group adopted RMB as the
recording currency.
5. Accounting treatment methods for business combinations under the same control and
those not under the same control.
(1) Business combinations under the same control
A business combination under the same control is a business combination in which all the
enterprises involved in the combination are ultimately controlled by the same party or parties both
before and after the business combination and on which the control is not temporary. In a business
combination under the same control, the party which obtains control of other enterprise(s)
involved in the business combination on the combining date is the combining party, and the other
enterprise(s) involved in the business combination is (are) the combined party. The "combining
date" refers to the date on which the combining party obtains actual control on the combined party.
The assets and liabilities that the combining party obtains in a business combination shall be
measured on the basis of their carrying amount in the combined party on the combining date. As
for the balance between the carrying amount of the net assets obtained by the combining party and
the carrying amount of the consideration paid by it (or the total par value of the shares issued), the
additional paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to be
offset, the retained earnings shall be adjusted.
The direct cost for the business combination of the combining party shall be recorded into the
profits and losses at the current period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the
combining enterprises are not ultimately controlled by the same party or the same parties both
before and after the business combination. In a business combination not under the same control,
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
the party which obtains the control on other combining enterprise(s) on the purchase date is the
acquirer, and other combining enterprise(s) is (are) the acquiree. The "acquisition date" refers to
the date on which the acquirer actually obtains the control on the acquiree.
As for business combinations not under the same control, the combination costs shall be the fair
values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity
securities issued by the acquirer in exchange for the control on the acquiree, and intermediary
agency fees for auditing, legal, consulting services, etc. and other administrative expenditures
incurred for the business combination, which were recorded in the profits and losses at the current
period when incurred. The trading expenditures arising from the acquirer’s issuance of equity or
liabilities securities as the consideration for the business combination are recorded in the initial
recognition amount for the equity or liabilities securities. The contingent consideration involved is
recorded in the combination costs according to its fair value on the acquisition date. Where new or
further evidence against the existing circumstances on the acquisition date occurs within 12
months after the acquisition date, which makes it necessary to adjust the contingent consideration,
the combined business reputation is adjusted accordingly. For a business combination realized by
two or more transactions of exchange, in the Group’s consolidated financial statements, as for the
equity interests of the acquiree held by the Group before the acquisition date, they are re-measured
according to their fair value on the acquisition date. The difference between their fair value and
their carrying amount is recorded in investment gains for the period comprising the acquisition
date. Other comprehensive incomes arising from the equity interests of the acquiree held by the
Group before the acquisition date are transferred to investment gains at the current period. The
combination costs are the summation of the fair value on the acquisition date of the equity
interests of the acquiree held by the Group before the acquisition date and the fair value on the
acquisition date of the equity interests of the acquiree acquired by the Group on the acquisition
date.
The combination costs of the acquirer and the identifiable net assets obtained in the combination
are both measured at their fair values on the acquisition date. The positive balance between the
combination costs and the fair value of the identifiable net assets the acquirer obtains from the
acquiree is recognized as business reputation. The acquirer shall, pursuant to the following
provisions, treat the balance between the combination costs and the fair value of the identifiable
net assets it obtains from the acquiree: a. it shall reexamine the measurement of the fair values of
the identifiable assets, liabilities and contingent liabilities it obtains from the acquiree as well as
the combination costs; b. if, after the reexamination, the combination costs are still less than the
fair value of the identifiable net assets it obtains from the acquiree, it shall record the balance into
the profits and losses of the current period.
As for the unrecognized deductible temporary differences of the acquiree obtained by the acquirer
due to their not satisfying the recognition criteria for deferred income tax assets on the acquisition
date, if new or further information within 12 months after the acquisition date shows that the
relevant circumstances on the acquisition date has existed and that the economic benefits arising
from the deductible temporary differences of the acquiree on the acquisition date are expected to
be realized, the corresponding deferred income tax assets are recognized and the business
reputation is written down in the mean time. If the business reputation is not sufficient to offset,
the difference is recognized in the profits and losses at the current period. Except for the aforesaid
circumstance, the recognized deferred income tax assets in relation to the business combination
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
are recorded in the profits and losses at the current period.
6. Preparation of consolidated financial statements
(1) Preparation methods for consolidated financial statements
1) Recognition principles of the consolidation scope
The scope of consolidated financial statements shall be confirmed based on the control. Control
means the Company can decide the financial and manage policy of investee entity and have
authority to earn the benefit from the investee entity. The consolidation scope includes the
Company and all its subsidiaries. The Company’s subsidiaries refer to the enterprises or entities
controlled by the Company.
2) Preparation methods for consolidated financial statements
The Group consolidates a subsidiary from the date when the Group obtains actual control over the
subsidiary’s net assets and production and operation decision-making and de-consolidates it from
the date when such control ceases. As for a disposed subsidiary, its operating results and cash
flows before the disposal date are properly included in the consolidated income statement and the
consolidated cash flow statement. As for a subsidiary disposed in the current period, the opening
accounts in the consolidated balance sheet are not restated. For a subsidiary acquired in a business
combination not under the same control, its operating results and cash flows after the acquisition
date are properly included in the consolidated income statement and the consolidated cash flow
statement, and the opening accounts and comparative accounts in the consolidated financial
statements are not restated. For a subsidiary acquired in a business combination under the same
control, its operating results and cash flows for the period from the beginning of the reporting
period to the combination date are properly included in the consolidated income statement and the
consolidated cash flow statement, and the comparative accounts in the consolidated financial
statements are restated in the mean time.
In the preparation of the consolidated financial statements, where a subsidiary adopts different
accounting policies or accounting periods from those of the Company, the subsidiary’s financial
statements are adjusted according to the Company’s accounting policy and accounting periods.
For a subsidiary obtained in a business combination not under the same control, its financial
statements are adjusted on the basis of the fair value of its identifiable net assets on the acquisition
date.
All significant balances, transactions and unrealized profits within the Group are offset in the
preparation of the consolidated financial statements.
The portions in a subsidiary’s shareholders’ equity and net current profits and losses that are not
attributable to the Company are separately presented, as minority interests and minority
shareholder gains and losses respectively, under the shareholders’ equity item and the net profit
item in the consolidated financial statements. The portion in the subsidiary’s current net gains and
losses that belongs to minority interests is presented as ―minority shareholder gains and losses‖
under the net profit item in the consolidated income statement. Where the subsidiary’s losses
attributable to minority shareholders exceed the portion in the subsidiary’s opening owners’ equity
attributable to minority shareholders, minority interests are offset.
Where the Company loses control over a former subsidiary due to disposal of some equity
investment or other reasons, the residual equity interests are re-measured according to the fair
value on the date when such control ceases. The summation of the consideration obtained from the
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
equity disposal and the fair value of the residual equity interests, minus the portion in the former
subsidiary’s net assets measured on a continuous basis from the acquisition date that is attributable
to the Company according to its former shareholding ratio in the subsidiary, is recorded in the
investment gains for the reporting period when the Company’s control over the subsidiary ceases.
Other comprehensive incomes in relation to the former equity investment in the subsidiary are
transferred to the investment gains at the current period when the Company’s control over the
subsidiary ceases. Later on, subsequent measurement is carried out on the residual equity interests
in accordance with the ―Accounting Standards for Business Enterprises No.2—Long-term Equity
Investment‖ or the ―Accounting Standards for Business Enterprises No.22—Recognition and
Measurement of Financial Instruments‖ and other relevant regulations. For more details, please
refer to ―10. Long-term Equity Investment‖ or ―7. Financial Instruments‖ under the Note IV.
(2) As for the event about purchasing and then selling (or selling and then purchasing) equities of
the same subsidiary, the Company shall disclose relevant accounting treatment methods.
7. Recognition standard for cash and cash equivalents
The term ―cash‖ refers to cash on hand and deposits that are available for payment at any time.
The term ―cash equivalents‖ refers to short-term ( within 3 months from the purchase date) and
highly liquid investments that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of change in value.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Foreign currency
1) Translation of foreign currency transactions
At the time of initial recognition of a foreign currency transaction, the Group shall convert the
amount in a foreign currency into amount in its Renminbi at the spot exchange rate (generally
refer to the middle price of market exchange rate published by the People’s Bank of China, the
same below) on the day the transaction is occurred. Of which, as for such transactions as foreign
exchange or involving in foreign exchange, the Company shall converted into amount in the
Renminbi at actual exchange rate the transaction is occurred.
2) Treatment method for the foreign currency monetary items and foreign currency non-monetary
items:
On the balance sheet date, the foreign currency monetary items are translated at the spot exchange
rate on the date. Exchange differences are recorded in the profits and losses at the current period
except for the following circumstances: ① Exchange differences arising from the special foreign
currency borrowings for the acquisition and construction of assets eligible for capitalization are
treated in accordance with the principle of borrowing cost capitalization; ② Exchange differences
arising from the net investment hedging instruments in an overseas operation are recorded in other
comprehensive incomes and can be recognized in the profits and losses at the current period only
when the net investment is disposed; and ③ Exchange differences arising from changes in the
carrying balances other than the amortized costs of foreign currency monetary items available for
sale are recorded in other comprehensive incomes.
Foreign currency non-monetary items measured at historical costs are translated into RMB at the
spot exchange rate on the transaction date. The foreign currency non-monetary items measured at
the fair value are translated at the spot exchange rate on the fair value confirming date, from which
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
the exchange difference is treated as change in fair value (including change in exchange rate) and
recorded in the profit and loss of the current period, or treated as other comprehensive incomes
and recorded in the capital reserves.
(2) Translation of foreign currency financial statements
Where the consolidated financial statements involve an overseas operation and foreign currency
monetary items form in a substantial basis on the net investment in the overseas operation,
exchange differences arising from exchange rate changes are recorded in the ―translation
difference of foreign currency statements‖ item under the owners’ equity item; and recorded in the
profits and losses at the reporting period of the disposal when the overseas operation is disposed.
The foreign currency financial statements of an overseas operation are translated in RMB in
accordance with the following methods: The asset and liability items in the balance sheets shall be
translated at a spot exchange rate on the balance sheet date. Among the owner’s equity items,
except the ones as ―retained profits‖, others shall be translated at the spot exchange rate at the time
when they are incurred. The income and expense items in the profits statements shall be translated
at the average exchange rate of the current period on transaction date. The opening retained profit
is the closing retained profit as of the previous year after translation; The closing retained profit is
measured and stated according to profit distribution items after translation; And the difference
between the asset items and the summation of the liability and shareholders’ equity items after
translation, as the translation difference of foreign currency statements, is recognized in other
comprehensive incomes and is presented separately under the shareholders’ equity item in the
balance sheet. Where an overseas operation is disposed and the Group’s control on the overseas
operation ceases, the foreign currency statement translation difference in relation to the overseas
operation and presented under the shareholders’ equity items in the balance sheet is, all or
according to the disposal rate of the overseas operation, transferred to the profits and losses at the
reporting period comprising the disposal.
Foreign currency cash flows and cash flows generated by overseas subsidiaries are translated at
the average exchange rate for the current period on the date when the cash flow is generated. The
influence on cash due to change of exchange rate shall be presented separately under the cash flow
statement.
The opening amounts and the actual amounts in the previous year are presented on the basis of the
translated financial statements for the previous year.
9. Financial instruments
Financial instruments include financial assets and financial liabilities as well as equity
instruments.
(1) Classification of financial assets
Financial assets bought in and sold out in the conventional way are recognized and de-recognized
in accordance with the transaction dates. In the initial recognition, financial assets are divided into
financial assets measured at fair values and whose changes are recorded in current profits and
losses, held-to-maturity investments, loans and accounts receivables, and available-for-sale
financial assets. In the initial recognition, a financial asset is measured at its fair value. For a
financial asset measured at fair value and whose changes are recorded in current gains and losses,
the relevant trading expenditures are directly recorded in the gains and losses at the current period.
And the trading expenditures for the other financial assets are recorded in the initially recognized
71
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
amount.
In the initial recognition, financial liabilities are divided into the financial liabilities measured at
fair values and whose changes are recorded in current gains and losses and other financial
liabilities. Financial liabilities are initially recognized at their fair values. As for a financial
liability measured at fair value and whose changes are recorded in current gains and losses, the
relevant trading expense is directly recorded in the profits and losses for the current period. As for
other financial liabilities, the relevant trading expenses are recorded in the initially recognized
amounts.
(2) Recognition basis and measurements for financial instruments
Financial assets
① Financial assets measured at fair values and whose changes are recorded in current profits and
losses
Such financial assets include transactional financial assets and financial assets designated to be
measured at fair values and whose changes are recorded in current gains and losses. The Group’s
financial assets measured at fair values and whose changes are recorded in current profits and
losses are all transactional financial assets.
A transactional financial asset refers to a financial asset meeting any of the following requirements:
A. The purpose to acquire the financial asset is mainly for selling or repurchase of it in the near
future; B. Forming a part of the identifiable combination of financial instruments which are
managed in a centralized way and for which there are objective evidences proving that the Group
may manage the combination by way of short-term profit making in the near future; and C. Being
a derivative instrument, excluding the designated derivative instruments which are effective
hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative
instruments which are connected with the equity instrument investments for which there is no
quoted price in the active market, whose fair value cannot be reliably measured, and which shall
be settled by delivering the said equity instruments.
A transactional financial asset is subsequently measured at the fair value. The gains and losses
arising from the fair value changes, as well as the dividend and interest incomes from the financial
asset, are recorded in the gains and losses for the current period.
② Held-to-maturity investments
A held-to-maturity investment refers to a non-derivative financial asset with a fixed date of
maturity, a fixed or determinable amount of repo price and which the Group holds for a definite
purpose or the Group is able to hold until its maturity.
A held-to-maturity investment is subsequently measured according to the amortized cost using the
actual interest rate method. The gains or losses arising from de-recognition, impairment or
amortization of the investment are recorded in the profits and losses for the current period.
The actual interest rate method refers to the method by which the post-amortization costs and the
interest incomes of different installments or interest expenses are calculated in light of the actual
interest rates of the financial assets or financial liabilities (including a set of financial assets or
financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future
cash flow of a financial asset or financial liability within the predicted term of existence or within
a shorter applicable term into the current carrying amount of the financial asset or financial
liability.
When calculating the actual interest rate, the Group predicts the future cash flow (not taking into
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account the future credit losses) on the basis of taking into account all the contractual provisions
concerning the financial asset or financial liability. The various fee charges, trading expenses,
reduced values, premiums, etc., which are paid or collected by the parties to a financial asset or
financial liability contract and which form a part of the actual interest rate, are also taken into
account in the determination of the actual interest rate.
③ Loans and accounts receivable
Loans and accounts receivable refer to the non-derivative financial assets for which there is no
quoted price in the active market and of which the repo amount is fixed or determinable. The
financial assets defined by the Group as loans and accounts receivable include notes receivable,
accounts receivable, interest receivable, dividend receivable, other receivables, etc..
Loans and accounts receivable are subsequently measured according to the amortized cost using
the actual interest rate method. The gains or losses arising from de-recognition, impairment or
amortization of the loans and accounts receivable are recorded in the profits and losses for the
current period.
④ Available-for-sale financial assets
Available-for-sale financial assets include the non-derivative financial assets which are designated
as available for sale when they are initially recognized, as well as the financial assets other than
the financial assets measured at fair values and whose changes are recorded in current gains and
losses, loans and accounts receivable and held-to-maturity investments.
Available-for-sale financial assets are subsequently measured at their fair values. Impairment
losses and the exchange differences of foreign currency monetary financial assets in relation to the
amortized cost are recorded in the profits and losses for the current period. Other gains or losses
arising from fair value changes are recognized as other comprehensive incomes and recorded in
the capital reserves, and transferred out and recorded in the profits and losses for the current
period when the financial asset is de-recognized.
Interest obtained during the period of holding an available-for-sale financial asset and the cash
dividends declared and distributed by an invested party are recorded in investment gains.
Financial liabilities
① Financial liabilities measured at fair values and whose changes are recorded in current gains
and losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities
designated to be measured at fair values and whose changes are recorded in current gains and
losses in the initial recognition under the same conditions where such financial assets are divided
into transactional financial assets and financial assets designated to be measured at fair values and
whose changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and
losses are subsequently measured at their fair values. Gains or losses arising from the fair value
changes, as well as the dividend and interest expenses in relation to the said financial liabilities,
are recorded in the profits and losses for the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not
quoted price in an active market and whose fair value cannot be reliably measured and which must
be settled by delivering the equity instrument, it is subsequently measured on the basis of costs.
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Other financial liabilities are subsequently measured according to the amortized cost using the
actual interest rate method. Gains or losses arising from de-recognition or amortization of the said
financial liabilities is recorded in the profits and losses for the current period.
(3) Recognition basis and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition of it is
terminated: ① The contractual rights for collecting the cash flow of the said financial asset are
terminated; ② The said financial asset has been transferred and nearly all of the risks and rewards
related to the ownership of the financial asset to the transferee; or ③ The said financial asset has
been transferred. And the Group has ceased its control on the said financial asset though it neither
transfers nor retains nearly all of the risks and rewards related to the ownership of the financial
asset.
Where the Group neither transfers nor retains nearly all of the risks and rewards related to the
ownership of a financial asset, and it does not cease its control on the said financial asset, it
recognizes the relevant financial asset and liability accordingly according to the extent of its
continuous involvement in the transferred financial asset. The term "continuous involvement in
the transferred financial asset" refers to the risk level that the enterprise faces resulting from the
change of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the
difference between the amounts of the following 2 items is recorded in the profits and losses of the
current period: (1) The book value of the transferred financial asset; and (2) The sum of
consideration received from the transfer, and the accumulative amount of the changes of the fair
value originally recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book
value of the transferred financial asset is apportioned between the portion whose recognition has
been stopped and the portion whose recognition has not been stopped according to their respective
relative fair value, and the difference between the amounts of the following 2 items is included
into the profits and losses of the current period: (1) The summation of the consideration received
from the transfer and the portion of the accumulative amount of changes in the fair value
originally recorded in other comprehensive incomes which corresponds to the portion whose
recognition has been stopped; and (2) The amortized carrying amounts of the aforesaid amounts.
(4) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the
recognition of the financial liability be terminated in all or partly. Where the Group (debtor) enters
into an agreement with a creditor so as to substitute the existing financial liabilities by way of any
new financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it terminates the
recognition of the existing financial liability, and at the same time recognizes the new financial
liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise
concerned shall include into the profits and losses of the current period for the gap between the
book value which has been terminated from recognition and the considerations it has paid
(including the non-cash assets it has transferred out and the new financial liabilities it has
assumed).
(5) Recognition method of fair values of financial assets and liabilities
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The ―fair value‖ refers to the amount, at which both parties to a transaction who are familiar with
the condition exchange assets or clear off debts under fair conditions. As for the financial
instrument for which there is an active market, the Group determines its fair value using the
quoted price in the active market. The quoted prices in the active market refer to the prices, which
are easily available from the stock exchange, brokers, industry associations, pricing service
institutions, etc. at a fixed term, and which represent the prices at which actually incurred market
transactions are made under fair conditions. Where there is no active market for a financial
instrument, the Group adopts value appraisal techniques to determine its fair value. The value
appraisal techniques mainly include the prices adopted by the parties, who are familiar with the
condition, in the latest market transaction upon their own free will, the current fair value obtained
by referring to other financial instruments of the same essential nature, the cash flow capitalization
method and the option pricing model, etc..
(6) Withdrawal of impairment provision for financial assets (excluding accounts receivable)
For the financial assets other than the financial assets measured at fair values and whose changes
are recorded in current gains and losses, the Group runs a check on their carrying amounts on
every balance sheet date. Where there is any objective evidence proving that such a financial asset
has been impaired, an impairment provision is made.
The Group carries out a separate impairment test for every financial asset which is individually
significant. As for a financial asset which is individually insignificant, an impairment test is
carried out separately or in the financial asset group with similar credit risk. Where the financial
asset (individually significant or insignificant) is found not impaired after the separate impairment
test, it is included in the financial asset group with similar credit risk and tested again on the group
basis. Where the impairment loss is recognized for an individual financial asset, it is not included
in the financial asset group with similar credit risk for an impairment test.
① Impairment of held-to-maturity investments, loans and accounts receivable
Where a financial asset measured on the basis of costs or amortized costs is impaired, the carrying
amount of the said financial asset is written down to the current value of the predicted future cash
flow. The amount written down is recognized as the impairment loss of the asset and is recorded
in the profits and losses for the current period. Where a financial asset is recognized as having
suffered from any impairment loss, if there is any objective evidence proving that the value of the
said financial asset has been restored, and it is objectively related to the events that occur after
such loss is recognized, the impairment losses as originally recognized are reversed. The reversed
carrying amount of the said financial asset does not exceed the amortized cost of the said financial
asset on the day of reverse under the assumption that no provision is made for the impairment.
② Impairment of available-for-sale financial assets
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the
decrease of the fair value of the capital reserve which is directly included are transferred out and
recorded in the profits and losses for the current period. The accumulative losses transferred out
are the balance obtained from the initially obtained cost of the said financial asset after deducting
the principals as taken back, the amortized amount, the current fair value and the impairment loss
originally recorded in the profits and losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within
the accounting periods thereafter, there is any objective evidence proving that the value of the said
financial asset has been restored and the restoration is objectively related to the events that occur
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after the impairment loss was recognized, the originally recognized impairment loss is reversed.
The impairment losses on the available-for-sale equity instrument investments are reversed and
recognized as other comprehensive incomes, and the impairment losses on the available-for-sale
liability instruments are reversed and recorded in the profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted
price in the active market and whose fair value cannot be reliably measured, or incurred to a
derivative financial asset which is connected with the said equity instrument investment and which
must be settled by delivering the said equity investment, is not reversed.
(7) As for event about reclassifying the undue held-to-maturity investment into available-for-sale
financial assets, the Company shall state the basis of changes in holding purpose or ability
10. Recognition criteria and withdrawal methods for bad debts provision of accounts
receivable
Receivables include account receivables and other accounts receivables.
(1) Recognition of provision for bad debts:
The Group shall test the carrying amount of receivables on the balance sheet date. Where there is
any objective evidence proving that such receivables have been impaired, an impairment provision
shall be made.
① debtor has serious financial difficult;
② debtor goes against the contract clause (for instance, breach of faith or overdue paying interests
or principal);
③ debtors has a great probability of bankruptcy or other financial reorganization;
④ other objective evidence proving such accounts receivable has been impaired;
1) Bad debt provision for individually significant accounts receivable
Judgement basis or monetary standards of provision for The Group recognized the receivables with amount
bad debts of the individually significant accounts above RMB 5 million as receivables with significant
receivable single amounts.
The Group made an independent impairment test on
receivables with significant single amount, the
financial assets without impairment by independent
impairment test should be included in financial
Method of individual provision for bad debts of the
assets portfolio with similar credit risk to take the
individually significant accounts receivable
impairment test. Receivables was recognized with
impairment should no longer be included in
receivables portfolio with similar credit risk to take
the impairment test.
2) Accounts receivable for which bad debt provisions are made on the group basis
Withdrawal method of
Name of group bad debt provision on Recognition basis of group
the group basis
Credit risks group Aging analysis method Receivables that are not individually significant and
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
individually significant but without impairment by
independent impairment test, are grouped on the basis
of similarity and relevance of credit risk. This credit
risk usually reflects the debtor’s ability to repay all the
due accounts in accordance with contract for such
assets, which also are related with the measurement on
future cash flow of the examined assets.
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Withdrawal proportion for accounts Withdrawal proportion for other accounts receivable
Age
receivable (%) (%)
Within 1 year (including 1 year) 5% 5%
1-2 years 10% 10%
2-3 years 20% 20%
Over 3 years 30% 30%
3-4 years
4-5 years
Over 5 years
In the groups, adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision
□ Applicable √ Inapplicable
3) Accounts receivable with an insignificant single amount but for which the bad debt provision is
made individually
Reason of individually withdrawing bad debt provision:
There is objective evidence shows that the accounts receivable has been impaired, such as
receivables exist dispute with the other parties or involving lawsuit and arbitration; receivables
exist obvious indication showing that the debtors are likely to fail to perform the duty of
repayment, etc..
Withdrawal method for bad debt provision:
If any objective evidence shows that the accounts receivable has been impaired, impairment loss
shall be recognized on the basis of the gap between the current values of the future cash flow
lower than its book value so as to withdraw provision for bad debts.
11. Inventory
(1) Classification
Inventories of the Company are classified as: raw materials, goods in process, processing
materials on consignment and merchandise inventory etc.
(2) Pricing method for outgoing inventories
□ First-in first-out method √ Weighted average method □ Specific identification method □ Other
The inventories shall be measured in light of their cost when obtained. The cost of inventory
consists of purchase costs, processing costs and other costs. Inventory is accounted by weight
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
average method upon receiving and giving. The difference between planned cost of and actual cost
of raw materials is accounted through the cost variance item, and the planned cost is adjusted to
the actual cost according to the cost difference which the carryover and given-out inventory
should shoulder in the period.
(3) Recognition basis of net realizable value and withdrawal method of depreciation reserves for
inventories
The net realizable value refers, in the ordinary course of business, to the account after deducting
the estimated cost of completion, estimated sale expense and relevant taxes from the estimated
sale price of inventories. The net realizable value of inventories shall be fixed on the basis of valid
evidence as well as under consideration of purpose of inventories and the effect of events after
balance-sheet-date.
On the balance sheet date, the inventories shall be measured according to the cost or the net
realizable value, whichever is lower. If the net realizable value is lower than the cost, it shall
withdraw the depreciation reserves for inventories, which was withdrawn in accordance with the
balance that the cost of individual inventory item exceeding the net realizable value.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any
write-down of the inventories, have disappeared, causing the net realizable value of inventories is
higher than its carrying amount, the amount of write-down shall be reversed from the original
amount of depreciation reserve for inventories. The reversed amount shall be included in the
profits and losses of the current period.
(4) Inventory system for inventories:
√ Perpetual inventory system □ Periodic inventory system □ Other
The inventory system for inventories is perpetual inventory system.
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods
Amortisation method: one-off amortization method
Packing articles
Amortisation method: one-off amortization method
12. Long-term equity investment
(1) Recognition of initial investment cost
The initial cost of the long-term equity investment formed in business combination shall be
ascertained in accordance with the following provisions: For the business combination under the
same control, it shall regard the share of the carrying amount of the owner's equity of the
combined party on the date of combination as the initial cost of the long-term equity investment.
For the business combination under different control, the combination costs shall be the sum of the
fair values of the assets paid, the liabilities incurred or assumed and the equity securities issued by
the Company; the commission fees for audit, law services, assessment & consultancy services and
other relevant expenses occurred in the business combination by the combining party, shall be
recorded into current profits and losses upon their occurrence; the transaction expense from the
issuance of equity securities or bonds securities which are as consideration for combination by the
combining party, should be recorded as the initial amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term
equity investments shall be initially measured by cost, the cost is fixed in accordance with the
ways of gaining, such as actual cash payment paid by the Group, the fair value of equity securities
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issued by the Group, the agreed value of the investment contract or agreement, the fair value or
original carrying amount of exchanged assets from non-monetary assets exchange transaction, the
fair value of the long-term equity investments, etc. The expenses, taxes and other necessary
expenditures directly related with gaining the long-term equity investments shall also be recorded
into investment cost.
(2) Follow-up measurement of long-term equity investment and recognized method of profits and
losses
The long-term equity investment that the Company does not have joint control or significant
influences on the invested entity, and has no offer in the active market and its fair value cannot be
reliably measured, it shall be measured by adopting the cost method; a long-term equity
investment that the Company has joint control or significant influences over the invested entity
shall be measured by employing the equity method; a long-term equity investment that the
Company does not have control, joint control or significant influence on the invested entity, as
well as its fair value can be reliably measured, it shall be accounted as financial assets
available-for-sale.
Moreover, long-term equity investment adopting the cost method in the financial statements, and
which the Company has control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be
included at its initial investment cost, the return on investment at current period shall be
recognized in accordance with the cash dividend or profit announced to distribute by the invested
entity, except the announced but not distributed cash dividend or profit included in the actual
payment or consideration upon gaining the investment.
②Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's attributable share
of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of
the long-term equity investment may not be adjusted. If the initial cost of a long-term equity
investment is less than the Company's attributable share of the fair value of the invested entity's
identifiable net assets for the investment, the difference shall be included in the current profits and
losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, the investment profits or losses at current period shall
be the attributable share of the net profits or losses of the invested entity. The investing enterprise
shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains
the investment, and in accordance with the accounting policies and accounting periods, recognize
the attributable share of the net profits and losses of the invested entity after it adjusts the net
profits of the invested entity. For the profits and losses of unrealized insider dealing between the
Group and joint-operative enterprise or co-operative enterprise, the investment profits and losses
shall be recognized after the part attributable to the Group calculated by proportion of shares held
being offset. However, if the losses of unrealized insider dealing between the Group and
joint-operative enterprise or co-operative enterprise was attributed to the impairment losses of the
transferred assets in accordance with the Accounting Standards for Enterprises No. 8— Asset
Impairment, which shall not be offset. The other comprehensive profits from invested entity shall
be recognized as other comprehensive profits after adjusting the book value of long-term equity
investment, and then recorded into capital reserves
The Group shall recognize the net losses of the invested enterprise until the book value of the
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
long-term equity investment and other long-term rights and interests which substantially form the
net investment made to the invested entity are reduced to zero. However, if the Group has the
obligation to undertake extra losses, which shall be recognized as the estimated liabilities in
accordance with the estimated duties and then recorded into investment losses at current period. If
the invested entity realizes any net profits later, the Group shall, after the amount of its attributable
share of profits offsets against its attributable share of the un-recognized losses, resume to
recognize its attributable share of profits.
For the long-term equity investment on joint-enterprise and co-operative enterprise held by the
Group before the initial execution of New Accounting Standards for Enterprise as 1 Jan. 2007, if
there existed the balance of debtor for equity investment related with such long-term equity
investment, which shall be recorded into current profits and losses with the amount by
straight-line amortization in the remained period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term equity
investment increased by acquiring shares of minority interest and the attributable net assets on the
subsidiary calculated by the increased shares held since the purchase date (or combination date),
the capital reserves shall be adjusted, if the capital reserves are not sufficient to offset, the retained
profits shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity
investment on subsidiaries without losing its controlling right on them, the balance between the
disposed price and attributable net assets of subsidiaries by disposing the long-term equity
investment shall be recorded into owners’ equity; where the Company losses the controlling right
by disposing part of long-term equity investment on such subsidiaries, it shall treated in
accordance with the relevant accounting policies in Note IV. 4 (2)— Method on preparation of
combined financial statements.
For other ways on disposal of long-term equity investment, the balance between the book value of
the disposed equity and its actual payment gained shall be recorded into current profits and losses;
for the long-term equity investment measured by adopting equity method, the other
comprehensive income originally recorded into owners’ equity shall be transferred into current
profits and losses by proportions upon the disposal. The remained equity shall be recognized as
long-term equity investment or other relevant financial assets in accordance with the book value,
and carried out the follow-up measurement in accordance with the above accounting policies for
the long-term equity investment or financial assets. If the measurement method of remained equity
is transferred from cost method to equity method, it shall be subject to retrospective adjustment in
accordance with relevant rules and stipulations.
(3) Recognition basis of joint control and significant influences
The term "control" refers to the power to determine the financial and operating polices of an
enterprise and obtain benefits from its operating activities of the enterprise. The term "joint
control" refers to the control over an economic activity in accordance with the contracts and
agreements, which does not exist unless the investing parties of the economic activity with one an
assent on sharing the control power over the relevant important financial and operating decisions.
The term "significant influences" refers to the power to participate in making decisions on the
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
financial and operating policies of an enterprise, but not to control or do joint control together with
other parties over the formulation of these policies. When ascertaining whether or not it is able to
control or have significant influences on an invested entity, an enterprise shall take into
consideration the invested enterprises' current convertible corporate bonds and current executable
warrants held by the investing enterprise and other parties, as well as other potential factors
concerning the voting rights.
(4) Testing method of impairment and withdrawal method of provision for impairment
The Group shall, on the day of balance sheet, make a judgment on whether there is any sign of
possible impairment of the long-term equity investment. Where there is sign of impairment, the
Group shall estimate the recoverable amount of the long-term equity investment. Where the
recoverable amount of the long-term equity investment is lower than its book value, which
balance shall be withdrawn the provision for impairment and recorded into current profits and
losses.
Once any loss of impairment of the long-term equity investment is recognized, it shall not be
switched back in the future accounting periods.
13. Investment real estates
14. Fixed assets
(1)Recognized standard of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as
follows: they are held for the sake of producing commodities, rendering labor service, renting or
business management; and their useful life is in excess of one fiscal year.
(2) Recognition basis and pricing method of fixed assets by finance lease
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards
related to the ownership of an asset. Its ownership may or may not eventually be transferred. The
fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets.
If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when
the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not
reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry
of the lease term, the leased asset shall be fully depreciated over the shorter one of the lease term
or its useful life.
(3) Depreciation methods of fixed assets
The initial measurement of a fixed asset shall be made at its cost after considering the effect of
expected discard expenses. The Group shall withdraw the depreciation of fixed assets by adopting
the straight-line method since the second month of its useful life. Useful life, expected net salvage
value (refers to the expected amount that the Group may obtain from the current disposal of a
fixed asset after deducting the expected disposal expenses at the expiration of its expected useful
life) and annual depreciation rate of each fixed assets are as below:
Category of fixed assets Useful life (Y) Expected net salvage value Annual deprecation
Housing and building 5-20 5-10 19.00-4.50
Machinery equipments 10-13 5-10 6.92-9.50
Electronic equipments and other 5 5-10 19.00-18.00
Transportation vehicle 5 5-10 19.00-18.00
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Other equipments
Fixed assets acquired under
-- -- --
finance lease:
Of which: housing and building
Machinery equipments
Electronic equipments and other
Transportation vehicle
Other equipments
(4) Testing method of impairment and withdrawal method of provision for impairment on fixed
assets
For the non-current non-financial assets, such as fixed assets, Construction in process, intangible
assets with finite service life, investment real assets measured by cost mode as well as long-term
equity investment on subsidiaries, co-operative enterprise and joint-operative enterprise, etc., are
tested for impairment if there is any indication that an asset may be impaired at the balance date.
If there is any sign of possible assets impairment, the Group shall estimate the recoverable amount
and made the impairment tests. No matter whether there is any sign of possible assets impairment,
the good will, intangible assets without certain service life, intangible assets not ready for use shall
be subject to impairment test every year.
If the result of the impairment test indicates that the recoverable amount of the asset is less than its
book value, a provision for impairment and an impairment loss are recognized for the amount by
which the asset’s book value exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and the present value of the future cash flows
expected to be derived from the asset. The fair value of an asset shall be determined in light of the
basis of the price as stipulated in the sales agreement. Where there is no sales agreement but there
is an active market of assets, the fair value of the asset shall be determined according to the price
bidden by the buyer of the asset; Where there is no sales agreement and no active market of assets,
the fair value of an asset shall be estimated in light of the best information available. The disposal
expenses shall include the relevant legal expenses, relevant taxes, trucking charge as well as the
direct expenses for bringing the assets into a marketable state. The current value of the expected
future cash flow of an asset shall be determined by the discounted cash with an appropriate
discount rate, on the basis of the expected future cash flow generated during the continuous use or
final disposal of an asset. A provision for asset Impairment is determined and recognized on an
individual asset basis. If it is not possible to estimate the recoverable amount of an individual
asset, the recoverable amount of the group of assets to which the asset belongs is determined. A
group of assets is the smallest group of assets that is able to generate independent cash inflows.
For the goodwill separately listed in the financial statements, during the impairment test, the book
value of this goodwill is allocated to the related asset group or groups of asset group which is
expected to benefit from the synergies of the business combination. If the result of the test
indicates that the recoverable amount of an asset group or groups of asset group including the
goodwill allocated is lower than its book value, the corresponding impairment loss is recognized.
The impairment loss is first deducted from the book value of goodwill allocated to the asset group
or groups of asset group, and then deducted from the book value of the remaining assets of the
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
asset group or groups of asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognized, it is not allowed to be reversed
even if the value is recovered in the subsequent periods.
(5) Other explanations
The follow-up expenses related to a fixed asset, if the economic benefits pertinent to this fixed
asset are likely to flow into the enterprise and its cost can be reliably measured, shall be recorded
into cost of fixed assets and ultimately recognized as the book value of the replaced part;
otherwise, they shall be included in the current profits and losses.
When the Group sells, transfers or discards any fixed assets, or when any fixed assets of the Group
is damaged or destroyed, the Group shall deduct the book value of the fixed assets as well as the
relevant taxes from the disposal income, and include the amount in the current profits and losses.
The Group shall check the useful life, expected net salvage value and depreciation method of the
fixed assets at the end of the year at least, if there is any change, it shall be regarded as a change of
the accounting estimates.
15. Construction in process
(1) Categories of construction in process
Construction in process is measured at actual cost. Actual cost comprises construction costs,
borrowing costs that are eligible for capitalization before the fixed assets being ready for their
intended us and other relevant costs.
(2) Standards and time of transferring construction in process into fixed asset
Construction in process is transferred to fixed assets when the assets are ready for their intended
use.
(3) Impairment test method and withdrawal method for impairment provision of construction in
process
For the non-current non-financial assets, such as fixed assets, Construction in process, intangible
assets with finite service life, investment real assets measured by cost mode as well as long-term
equity investment on subsidiaries, co-operative enterprise and joint-operative enterprise, etc., are
tested for impairment if there is any indication that an asset may be impaired at the balance date.
If there is any sign of possible assets impairment, the Group shall estimate the recoverable amount
and made the impairment tests. No matter whether there is any sign of possible assets impairment,
the good will, intangible assets without certain service life, intangible assets not ready for use shall
be subject to impairment test every year.
If the result of the impairment test indicates that the recoverable amount of the asset is less than its
book value, a provision for impairment and an impairment loss are recognized for the amount by
which the asset’s book value exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and the present value of the future cash flows
expected to be derived from the asset. The fair value of an asset shall be determined in light of the
basis of the price as stipulated in the sales agreement. Where there is no sales agreement but there
is an active market of assets, the fair value of the asset shall be determined according to the price
bidden by the buyer of the asset; Where there is no sales agreement and no active market of assets,
the fair value of an asset shall be estimated in light of the best information available. The disposal
expenses shall include the relevant legal expenses, relevant taxes, trucking charge as well as the
direct expenses for bringing the assets into a marketable state. The current value of the expected
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future cash flow of an asset shall be determined by the discounted cash with an appropriate
discount rate, on the basis of the expected future cash flow generated during the continuous use or
final disposal of an asset. A provision for asset Impairment is determined and recognized on an
individual asset basis. If it is not possible to estimate the recoverable amount of an individual
asset, the recoverable amount of the group of assets to which the asset belongs is determined. A
group of assets is the smallest group of assets that is able to generate independent cash inflows.
For the goodwill separately listed in the financial statements, during the impairment test, the book
value of this goodwill is allocated to the related asset group or groups of asset group which is
expected to benefit from the synergies of the business combination. If the result of the test
indicates that the recoverable amount of an asset group or groups of asset group including the
goodwill allocated is lower than its book value, the corresponding impairment loss is recognized.
The impairment loss is first deducted from the book value of goodwill allocated to the asset group
or groups of asset group, and then deducted from the book value of the remaining assets of the
asset group or groups of asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognized, it is not allowed to be reversed
even if the value is recovered in the subsequent periods.
16. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums
on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where
the borrowing costs incurred to an enterprise can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it shall start to be capitalized when
the asset disbursements have already incurred, the borrowing costs has already incurred and the
acquisition and construction or production activities which are necessary to prepare the asset for
its intended use or sale have already started; When the qualified asset under acquisition and
construction or production is ready for the intended use or sale, it shall stop to be capitalized.
Other borrowing costs shall be recognized as costs upon their occurrence.
(2) Capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of
capitalization of the borrowing costs, excluding the period of suspension of capitalization of the
borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended
use or sale, the capitalization of the borrowing costs shall be ceased.
When partial projects of a qualified asset under acquisition and construction or production are
completed respectively and ready for independent use, the capitalization of borrowing costs for
such parts of asset shall be ceased.
Where each part of a asset under acquisition and construction or production is completed
separately and is ready for use or sale during the continuing construction of other parts, but it can
not be used or sold until the asset is entirely completed, the capitalization of the borrowing costs
shall be ceased when the asset is completed entirely.
(3) Period for ceasing capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally
and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs
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shall be suspended until the acquisition and construction or production of a qualified asset resume
again
(4) Calculation method of capitalized amount of borrowing costs
The to-be-capitalized amount of interests shall be determined in light of the actual interests
incurred of the specially borrowed loan at the present period minus the income of interests earned
on the unused borrowing loans as a deposit in the bank or as a temporary investment; the
enterprise shall calculate and determine the to-be-capitalized amount on the general borrowing by
multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing
used. The capitalization rate shall be calculated and determined in light of the weighted average
interest rate of the general borrowing.
During the period of capitalization, the exchange balance on foreign currency special borrowings
shall be capitalized; the exchange balance on foreign currency general borrowings shall be
recorded into current profits and losses.
The term ―assets eligible for capitalization‖ refers to the fixed assets, investment real estate,
inventories and other assets, of which the acquisition and construction or production may take
quite a long time to get ready for its intended use or for sale.
17. Biological assets
18. Oil-gas assets
19. Intangible assets
(1) Pricing method of intangible assets
The term "intangible asset" refers to the identifiable non-monetary assets possessed or controlled
by enterprises which have no physical shape.
The intangible assets shall be initially measured according to its cost. The costs related with the
intangible assets, if the economic benefits related to intangible assets are likely to flow into the
enterprise and the cost of intangible assets can be measured reliably, shall be recorded into the
costs of intangible assets; otherwise, it shall be recorded into current profits and losses upon the
occurrence.
The use right of land gained is usually measured as intangible assets. For the self-developed and
constructed factories and other constructions, the related expenditures on use right of land and
construction costs shall be respectively measured as intangible assets and fixed assets. For the
purchased houses and buildings, the related payment shall be distributed into the payment for use
right of land and the payment for buildings, if it is difficult to be distributed, the whole payment
shall be treated as fixed assets.
(2) Estimated useful life of intangible assets with limited useful life
At the end of period, the Group shall check the service life and amortization method of intangible
assets with finite service life, if there is any change, it shall be regarded as a change of the
accounting estimates. Besides, the Group shall check the service life of intangible assets without
certain service life, if there is any evidence showing that the period of intangible assets to bring
the economic benefits to the enterprise can be prospected, it shall be estimated the service life and
amortized in accordance with the amortization policies for intangible assets with finite service life.
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After checking the service life and amortization method of intangible assets with finite service life,
the service life and amortization method of intangible assets at the period-end is same with the
previous estimation.
Item Estimated useful life Basis
(3) Judgment basis of intangible assets with uncertain useful life
There are evidences showing that the service life of intangible assets on bringing economical
benefits to the Company is predictable.
(4) Withdrawal of impairment provision of intangible assets
For the non-current non-financial assets, such as fixed assets, Construction in process, intangible
assets with finite service life, investment real assets measured by cost mode as well as long-term
equity investment on subsidiaries, co-operative enterprise and joint-operative enterprise, etc., are
tested for impairment if there is any indication that an asset may be impaired at the balance date.
If there is any sign of possible assets impairment, the Group shall estimate the recoverable amount
and made the impairment tests. No matter whether there is any sign of possible assets impairment,
the good will, intangible assets without certain service life, intangible assets not ready for use shall
be subject to impairment test every year.
If the result of the impairment test indicates that the recoverable amount of the asset is less than its
book value, a provision for impairment and an impairment loss are recognized for the amount by
which the asset’s book value exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and the present value of the future cash flows
expected to be derived from the asset. The fair value of an asset shall be determined in light of the
basis of the price as stipulated in the sales agreement. Where there is no sales agreement but there
is an active market of assets, the fair value of the asset shall be determined according to the price
bidden by the buyer of the asset; Where there is no sales agreement and no active market of assets,
the fair value of an asset shall be estimated in light of the best information available. The disposal
expenses shall include the relevant legal expenses, relevant taxes, trucking charge as well as the
direct expenses for bringing the assets into a marketable state. The current value of the expected
future cash flow of an asset shall be determined by the discounted cash with an appropriate
discount rate, on the basis of the expected future cash flow generated during the continuous use or
final disposal of an asset. A provision for asset Impairment is determined and recognized on an
individual asset basis. If it is not possible to estimate the recoverable amount of an individual
asset, the recoverable amount of the group of assets to which the asset belongs is determined. A
group of assets is the smallest group of assets that is able to generate independent cash inflows.
For the goodwill separately listed in the financial statements, during the impairment test, the book
value of this goodwill is allocated to the related asset group or groups of asset group which is
expected to benefit from the synergies of the business combination. If the result of the test
indicates that the recoverable amount of an asset group or groups of asset group including the
goodwill allocated is lower than its book value, the corresponding impairment loss is recognized.
The impairment loss is first deducted from the book value of goodwill allocated to the asset group
or groups of asset group, and then deducted from the book value of the remaining assets of the
asset group or groups of asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognized, it is not allowed to be reversed
even if the value is recovered in the subsequent periods.
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(5) Criteria of separating the research phase and development phase of internal R&D project
The Company’s expenditures for research and development are divided into expenditures in
research phase and expenditures in development phase in accordance with their natures and
whether the intangible assets ultimately formed from such R&D activities exist significant
uncertainty or not.
(6) Calculation of the expenditures of internal R&D project
Expenditures for research and development shall be recorded into current profits and losses upon
the occurrence.
The development expenditures for its internal research and development projects of an enterprise
may be confirmed as intangible assets when they satisfy the following conditions simultaneously,
otherwise，it shall be recorded into current profits and losses.
① It is feasible technically to finish intangible assets for use or sale;
② It is intended to finish and use or sell the intangible assets;
③ The usefulness of methods for intangible assets to generate economic benefits shall be
proved, including being able to prove that there is a potential market for the products
manufactured by applying the intangible assets or there is a potential market for the intangible
assets itself or the intangible assets will be used internally;
④ It is able to finish the development of the intangible assets, and able to use or sell the
intangible assets, with the support of sufficient technologies, financial resources and other
resources; and
⑤ The development expenditures of the intangible assets can be reliably measured.
If the expenditures for research and expenditures for development can not be distinguished from
each other, all the expenditures for research and development shall be recorded into current profits
and losses.
20. Long-term deferred expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year
(one year excluded) that have occurred but attributable to the current and future periods.
Long-term deferred expense shall be amortized averagely within benefit period.
21. Assets transfer with repurchasing conditions
22. Estimated liabilities
(1) Recognition criteria of estimated liabilities
(2) Measurement of estimated liabilities
23. Share-based payment and equity instruments
The term "share-based payment" refers to a transaction in which the Company grants equity
instruments or undertakes equity-instrument-based liabilities in return for services from employee
or other parties.
(1) Categories of share-based payment
The share-based payments shall consist of equity-settled share-based payments and cash-settled
share-based payments.
① Equity-settled share-based payments
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The equity-settled share-based payment in return for employee services shall be measured at the
fair value of the equity instruments granted to the employees on the grant day. If the right of the
amount of the fair value of the equity instruments cannot be exercised until the vesting period
comes to an end or until the prescribed performance conditions are met, then based on the best
estimate of the number of vested equity instruments, it shall be included in the relevant costs or
expenses by straight-line method, and also increase the capital reserves.
An equity-settled share-based payment in return for the service of any other party shall be
conducted in accordance with the following circumstances, respectively: If the fair value of the
service of any other party can be measured in a reliable way, it shall be measured at the fair value
of the service on the acquisition date by any other service party; If the fair value of the service of
any other party can not be measured in a reliable way, but the fair value of the equity instruments
can be measured in a reliable way, the fair value of the equity instruments on date of the service
acquisition shall be included in the relevant costs or expenses, and the owner's equities shall be
increased accordingly.
② Cash-settled share-based payments
A cash-settled share-based payment shall be measured in accordance with the fair value of liability
calculated and confirmed based on the shares or other equity instruments undertaken by the Group.
As to the cash-settled share-based payment, if the right may be exercised immediately after the
grant, it shall be included in the relevant costs or expenses on the date of the grant, and the
liabilities shall be increased accordingly; if the right may not be exercised until the vesting period
comes to an end or until the specified performance conditions are met, on each balance sheet date
within the vesting period, the services obtained in the current period shall, based on the best
estimate of the information about the exercisable right, be included in the relevant costs or
expenses and the corresponding liabilities at the fair value of the liability undertaken by the
Group.
The Group shall, on each balance sheet date and on each account date prior to the settlement of the
relevant liabilities, re-measure the fair values of the liabilities and include the changes in the
current profits and losses.
(2) The measures for the recognition of the fair value of the equity instruments.
The fair value of the restricted shares granted by the Group is measured at the closing price of
A-share on the day before the grant day.
(3) Basis for the recognition of the best estimation of the vested equity instruments
On each balance sheet date within the vesting period, the best estimation shall be made in
accordance with the newly gained subsequent information on the change of vested number of
staffs, and then revise the estimated number of vested equity instrument.
(4) Relevant accounting treatment on the implementation, revision and termination of share-based
payment plan
As to the revision on the share-based payment plan made by the Group, if the fair value of the
granted equity instrument increases after the revision, it shall recognize the increase of the service
gained according to the increase of the fair value of equity instrument. The increase of the fair
value of equity instrument refers to the balance between the fair value on the revising date of the
equity instruments before and after the revision. If the total fair value of share-base payment
decreases after the revision or adopting other ways against the staffs in the revision, it shall
continue to conduct accounting treatment on the service gained as if the revision never happens,
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only if the Group cancel partial or total granted equity instrument.
During the vesting period, if the Group cancels the granted equity instrument, the Group shall treat
the cancel of granted equity instrument as accelerating the vesting, and includes the amount shall
be recognized during the remained vesting period into current profit and loss, and also recognize
the capital reserves. If staffs or other party can choose to meet the non-vesting conditions but not
meet them during the vesting period, which will be treated as the cancel of granted equity
instrument by the Group.
24. Repurchase of shares of the Company
25. Revenue
(1) Criteria for recognition time of revenue from selling goods
1) Revenue from selling goods
No revenue from selling goods may be recognized unless the following conditions are met
simultaneously: the significant risks and rewards of ownership of the goods have been transferred
to the buyer by the enterprise; the enterprise retains neither continuous management right that
usually keeps relation with the ownership nor effective control over the sold goods; the relevant
amount of revenue can be measured in a reliable way; the relevant economic benefits may flow
into the enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable
way.
(2) Revenue from providing labor services
If an enterprise can reliably estimate the outcome of a transaction concerning the labor services it
provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method on the balance sheet date. The percentage-of-completion is
determined by the proportion of the costs incurred against the estimated total costs.
The outcome of a transaction concerning the providing of labor services can be measured in a
reliable way, means that the following conditions shall be met simultaneously: ① The amount of
revenue can be measured in a reliable way; ② The relevant economic benefits are likely to flow
into the enterprise; ③ The schedule of completion under the transaction can be confirmed in a
reliable way; ④ The costs incurred or to be incurred in the transaction can be measured in a
reliable way.
If the Company can not measure the result of a transaction concerning the providing of labor
services in a reliable way, it shall be conducted in accordance with the following circumstances,
respectively: If the cost of labor services incurred is expected to be compensated, the
compensation amount for the cost of labor services shall be recognized as the revenue from
providing labor service, and the cost of labor service incurred shall be as the current cost; if the
cost of labor services incurred is not expected to compensate, no revenue from the providing of
labor services may be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods
and providing of labor services, if the part of sale of goods and the part of providing labor services
can be distinguished from each other and can be measured respectively, the part of sale of goods
and the part of providing labor services shall be treated respectively. If the part of selling goods
and the part of providing labor services can not be distinguished from each other, or if the part of
sale of goods and the part of providing labor services can be distinguished from each other but can
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not be measured respectively, both parts shall be conducted as selling goods.
(2) Recognition basis of royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be
recognized as revenue on accrual basis.
(3) Recognition basis and method for the schedule of contracted project when recognizing the
revenue from providing labor services and construction contract by percentage-of-completion
method
26. Government subsidies
(1) Types
A government subsidy means the monetary or non-monetary assets obtained free by the Group
from the government, but excluding the capital invested by the government as the owner of the
enterprise. Government subsidies consist of the government subsidies pertinent to assets and
government subsidies pertinent to income.
(2) Accounting treatment method
If a government subsidy is a monetary asset, it shall be measured in the light of the received or
receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its fair
value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal
amount. The government subsidies measured at their nominal amounts shall be directly included
in the current profits and losses.
The government subsidies pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits and
losses. The government subsidies pertinent to incomes shall be treated respectively in accordance
with the circumstances as follows: those subsidies used for compensating the related future
expenses or losses of the enterprise shall be recognized as deferred income and shall included in
the current profits and losses during the period when the relevant expenses are recognized; or
those subsidies used for compensating the related expenses or losses incurred to the enterprise
shall be directly included in the current profits and losses.
Where it is necessary to refund any government subsidy which has been recognized, it shall be
treated respectively in accordance with the circumstances as follows: if there is the deferred
income concerned, the book balance of the deferred income shall be offset against, but the
excessive part shall be included in the current profits and losses; or if there is no deferred income
concerned to the government subsidy, it shall be directly included in the current profits and losses.
The government capital investment is not government subsidies.
27. Deferred income tax assets and deferred income tax liabilities
(1) Recognition basis of deferred income tax assets
The balance between the book value of deferred tax assets and deferred tax liabilities and its
taxable amount, as well as the temporary difference between the book value of those unrecognized
as assets and liabilities but with clear taxable amount and the taxable amount should adopt law of
liabilities for balance sheet to recognize deferred income tax assets and deferred income tax
liabilities.
No deferred taxable assets should be recognized for the deductible temporary difference of initial
recognition of assets and liabilities arising from the transaction which is not business combination,
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the accounting profits will not be affected, nor will the taxable amount or deductible loss be
affected at the time of transaction. Besides, no deferred taxable assets should be recognized for the
deductible temporary difference related to the investments of the subsidiary companies, associated
enterprises and joint enterprises, which are not likely to be reversed in the expected future or is not
likely to acquire any amount of taxable income tax that may be used for making up such
deductible temporary differences. Otherwise, the Company shall recognize the deferred income
tax assets arising from a deductible temporary difference basing on the extent of the amount of the
taxable income that is likely to be acquired to make up such deductible temporary differences
For any deductible loss or tax deduction that can be carried forward to the next year, the
corresponding deferred income tax asset shall be determined to the extent that the amount of
future taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
On the balance sheet date, the deferred income assets and deferred income tax liabilities shall be
measured at the tax rate applicable to the period during which the assets are expected to be
recovered or the liabilities are expected to be settled.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is
unlikely to obtain sufficient taxable income to offset against the benefit of the deferred income tax
asset, the book value of the deferred income tax assets shall be written down. Any such
write-down should be subsequently reversed where it becomes probable that sufficient taxable
income will be available.
(2) Recognition basis of deferred income tax liabilities
The balance between the book value of deferred tax assets and deferred tax liabilities and its
taxable amount, as well as the temporary difference between the book value of those unrecognized
as assets and liabilities but with clear taxable amount and the taxable amount should adopt law of
liabilities for balance sheet to recognize deferred income tax assets and deferred income tax
liabilities.
No deferred tax liability is recognized for a temporary difference arising from the initial
recognition of goodwill, the initial recognition of assets or liabilities due to a transaction other
than a business combination, which affects neither accounting profit nor taxable profit (or
deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary
differences related to the investments of subsidiary companies, associated enterprises and joint
enterprises, and the investing enterprise can control the time of the reverse of temporary
differences as well as the temporary differences are unlikely to be reversed in the excepted future.
Otherwise, the Group should recognize the deferred income tax liabilities arising form other
taxable temporary difference.
28. Operating lease and financial lease
(1) Accounting treatments of operating lease
1) The Group records the operating lease as the leasee
The rental payment from operating leases shall be recorded by the lessee in the relevant asset costs
or the profits and losses of the current period by using the straight-line method over each period of
the lease term. The initial direct costs incurred by a lessee shall be recognized as the profits and
losses of the current period. The contingent rents shall be recorded into the profits and losses of
the current period in which they actually arise.
2) The Group records the operating lease as the leasor
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The rental income from operating leases shall be recorded by the lessee in the profits and losses of
the current period by using the straight-line method over each period of the lease term. The initial
direct costs with large amount shall be capitalized upon the occurrence, and recorded into current
profits and losses by using the recognition basis for rental income method over each period of the
lease term; the initial direct costs with small amount shall be recorded into current profits and
losses upon occurrence. The contingent rents shall be recorded into the profits and losses of the
current period in which they actually arise.
(2) Accounting treatments of financial lease
1) The Group records the finance lease as the leasee
On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset
and the present value of the minimum lease payments on the lease beginning date as the entering
value in an account, recognize the amount of the minimum lease payments as the entering value in
an account of long-term account payable, and treat the balance between the recorded amount of
the leased asset and the long-term account payable as unrecognized financing charges. Otherwise,
the initial direct costs incurred during the process of lease negotiating and signing the leasing
agreement which can be included into the items of lease shall be recorded in the asset value of the
current period. The balance that the minimum lease payment minus the unrecognized financing
charges should be listed as long-term liabilities and long-term liabilities due within 1 year
respectively.
The unrecognized financing charges should be recorded into current financing charges measured
by adopting effective interest method during the lease period. The contingent rents should be
recorded into current profits and losses upon occurrence.
2) The Group records the finance lease as the lessor
On the beginning date of the lease term, a lessor shall recognize the sum of the minimum lease
receipts on the lease beginning date and the initial direct costs as the entering value in an account
of the financing lease values receivable, and record the unguaranteed residual value at the same
time. The balance between the sums of the minimum lease receipts, the initial direct costs and the
unguaranteed residual value, and the sum of their present values shall be recognized as unrealized
financing income. A lessor shall present the balances between the financial lease income minus the
unrecognized financing income as long-term creditor’s right and long-term creditor’s right due
within 1 year respectively.
The unrealized financing income should be recorded into current financing income measured by
adopting effective interest method during the lease period. The contingent rents should be
recorded into current profits and losses upon occurrence.
29. Assets held for sale
(1) Recognition criteria of the assets held for sale
(2) Accounting treatments of the assets held for sale
30. Capitalization of assets
31. Hedging accounting
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32. Changes in main accounting policies and estimates
Were the main accounting policies or estimates changed during the report period?
□Yes √No □ Inapplicable
(1) Change of accounting policies
Were the main accounting policies changed during the report period?
□Yes √No □ Inapplicable
(2) Change of accounting estimates
Were the main accounting estimates changed during the report period?
□Yes √No □ Inapplicable
33. Correction of previous accounting errors
Was any accounting error made in previous periods discovered in the report period?
□Yes √No □ Inapplicable
(1) Retrospective restatement method
Was any previous accounting error adopting retrospective restatement method discovered in the
report period?
□Yes √No □ Inapplicable
(2) Prospective application method
Was any previous accounting error adopting prospective application method discovered in the
report period?
□Yes √No □ Inapplicable
34. Other main accounting policies and estimates as well as compilation method of financial
statements
V. Taxation
1. Main taxes and tax rate
Category of taxes Tax basis Tax rate
Calculated the output tax at 17%,
13% of taxable income and paid
VAT the VAT by the amount after 17%、13%
deducting the deductable
withholding VAT at current period.
Consumption tax
Paid by 3%, 5% of taxable
Business tax 3%、5%
business income
Paid at 7%, 5%, 1% of the
Urban maintenance and construction tax 7%、5%、1%
circulating tax actually paid
Paid at 15%, 16.5%, 25% of
Enterprise income tax 15%、16.5%、25%
taxable income respectively
The income tax rates adopted by each subsidiary and branch factory
2. Tax preference and official documents
The Company, in accordance with the Notice on Passing the Re-examination of New High-tech
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Enterprise for 504 Companies Including Jinan Shengquan Group Co., Ltd. (Lu-Ke-Gao-Zi [2012]
No. 19) from Department of Science & Technology of Shandong Province, Finance Bureau of
Shandong Province, National Taxation Bureau of Shandong and Local Taxation Bureau of
Shandong Province, was recognized as a New High-tech Enterprise and obtained the Certificate of
New High-tech Enterprise on 31 Oct. 2011. The Company shall, in line with the Article 28 of
Enterprise Income Tax Law of the People’s Republic of China and Notice of the State
Administration of Taxation on the Issues concerning the Administration of Enterprise Income Tax
Deduction and Exemption (GSF [2008] No. 111 document), enjoy a 15-percent rate for enterprise
income tax.
The Company’s wholly-owned subsidiary— Lufeng Weaving & Dyeing Co., Ltd., in accordance with
the Notice on Confirmation of New High-tech Enterprise for 430 Companies Including Jinan
Feshen Xinng’an Technologies Co., Ltd. (Lu-Ke-Gao-Zi [2012] No. 38) from Department of
Science & Technology of Shandong Province, Finance Bureau of Shandong Province, National
Taxation Bureau of Shandong and Local Taxation Bureau of Shandong Province, was recognized
as a New High-tech Enterprise and obtained the Certificate of New High-tech Enterprise on 30
Nov. 2011.. The above subsidiary shall, in line with the Article 28 of Enterprise Income Tax Law
of the People’s Republic of China and Notice of the State Administration of Taxation on the Issues
concerning the Administration of Enterprise Income Tax Deduction and Exemption (GSF [2008]
No. 111 document), enjoy a 15-percent rate for enterprise income tax.
Luthai (Hong Kong) Co., Ltd. (hereinafter refers as Luthai (Hong Kong)), the wholly-owned
subsidiary company of the Company, was incorporated in Hong Kong SAR, whose profit tax shall
be paid at tax rate of 16.5%.
3. Other notes
VI. Business combination and consolidated financial statement
General instruction of business combination and consolidated financial statements
1. Subsidiaries
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
95
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(1) Subsidiaries obtained by establishment and investment
Unit: RMB Yuan
Balance of
parent
company’s
equity after
deducting
Actual the
The The
amount of Other Included in Deductible difference
Registered Business Registered Business proportion proportion Minority
Subsidiaries Type Currency investments essential consolidated minority that loss of
place nature capital scope of holding of voting interest
at the investment statement interests minority
shares（%） rights（%）
period-end interests
exceed
equity
obtained by
minority
shareholders
Beijing Wholesale
Lufeng of clothing
Sunshine and
Wholly-own
Garmetnt Wholesale commodity;
ed 15,000,000. 15,000,000.
Co., Ltd. Beijing and retail CNY costume 100% 100% Yes
subsidiary 00 00
(hereinafter industry designing;
refer to as service of
―Lufeng technology
Sunshine‖) diffusion
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Design and
Beijing manufacturi
Innovative ng of
Garment clothing,
Wholesale
Co., Ltd. Holding 42,000,000. adornment, 25,200,000. 13,476,715.
Beijing and retail CNY 60% 60% Yes
(hereinafter subsidiary 00 fabric and 00 92
industry
refer to as trimmings;
―Beijing sale of
Innovative‖) self-made
products
Import &
export trade,
Luthai Wholly-own Wholesale collection of
6,000,000.0 6,366,600.0
(Hong ed Hong Kong and retail HKD market 100% 100% Yes
0 0
Kong) subsidiary industry information,
information
consultation
Shanghai Design,
Luthai technology
Textile Co., R&D of
Wholly-own Wholesale
Ltd. 5,000,000.0 textile and 5,000,000.0
ed Shanghai and retail CNY 100% 100% Yes
(hereinafter 0 garment; 0
subsidiary industry
refer to as wholesale
―Shanghai of textile
Lutai‖) and garment
Xinjiang Holding Xinjiang Manufacturi 146,534,217 CNY Purchase, 82,400,701. 58.24% 58.24% Yes 136,572,800
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Luthai subsidiary ng .01 processing 97 .46
Harvest and sale of
Cotton Co., cotton and
Ltd. cotton-by
(hereinafter products;
refer to as production
―Xinjiang and sales of
Luthai‖) conventiona
l seed of
crops;
foreign
trade,
production
and sale of
cotton
textile
products;
processing
and sale of
edible
vegetable
oil;
wholesale
and retail of
agricultural
materials;
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
crops
planting
Production
Lufeng and sale of
Weaving & textile and
Dyeing Co., printing and
Ltd. Holding dyeing
Manufacturi 706,160,000 529,620,000 240,603,892
(hereinafter subsidiary Zibo CNY products; 75% 75% Yes
ng .00 .00 .46
refer to as wholesale
―Lufeng and retail of
Weaving & yarn,
Dyeing‖) clothing and
adornment
Production
Zibo Luqun and sale of
Textile Co., cotton
Ltd. Wholly-own polyester
Manufacturi 168,220,000 171,784,550
(hereinafter ed Zibo CNY yarn, 100% 100% Yes
ng .00 .00
refer to as subsidiary weaving,
―Luqun clothing,
Textile‖) adornment
and textile
Zibo Power
Wholly-own
Xinsheng Manufacturi 162,435,600 supply, 176,340,737
ed Zibo CNY 100% 100% Yes
Power Co., ng .00 power .93
subsidiary
Ltd. generation,
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(hereinafter production
refer to as and sale of
―Xinsheng hollow
Power‖) brick and
cement
block for
architecture
Other notes to subsidiaries obtained by establishment and investment
100
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(2) Subsidiaries obtained by business combination under same control
Naught
(3) Subsidiaries obtained by business combination not under same control
Naught
2. Special purpose entities or operating entities with control right formed by entrusted operation or lease
□ Applicable √ Inapplicable
Other explanation on special purpose entities or operating entities with control right formed by entrusted operation
or lease:
3. Explanation on changes in consolidated scope
Explanation on changes in consolidated scope:
□ Applicable √ Inapplicable
4. Subsidiaries that newly combined into and not combined into consolidation scope in the reporting period
The subsidiaries, special purpose entities and operating entities with control right formed by entrusted operation or lease that newly
included in the consolidated scope
Unit: RMB Yuan
Name Closing net assets Net profit in current period
The subsidiaries, special purpose entities and operating entities with control right formed by entrusted operation or lease that not
longer included in the consolidated scope in the reporting period
Unit: RMB Yuan
Net profit from year-begin to
Name Net asset at the disposal date
disposal date
Other notes to entities newly combined into and not combined into consolidation scope:
5. Business combination under same control during the reporting period
Unit: RMB Yuan
Cash flow arising
Judgment basis
The consolidated The consolidated from operating
of business Actual controller
income from net profit from activities
The combined party combination of the same
period-begin to period-begin to between
under the same control
combination date combination date period-begin and
control
combination date
Other notes to business combination under same control:
6. Business combination not under same control during the reporting period
Unit: RMB Yuan
The combined party Amount of goodwill Calculation method of goodwill
Other notes to business combination not under same control:
7. Subsidiaries reduced by selling equities without control right during the reporting period
Recognition method of gains and
Name of subsidiary Disposal date
losses
Other notes to subsidiaries reduced by selling equities without control right during the reporting period:
8. The counter purchases in the reporting period
Calculation method of
goodwill recognized or
Judgment basis of counter Recognition method of
The backdoor party included into current gains
purchase combination costs
and losses in the
combination
Other notes to counter purchases:
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
9. Mergers in the reporting period
Unit: RMB Yuan
Type of merger Main assets merged in Main liabilities merged in
Mergers under
Mergers under the same control Item Amount Item
the same control
Mergers not under the same control Item Amount Item Amount
Other notes to mergers:
10. Exchange rates of major items in financial statements for foreign entities
Item Items of assets and liabilities
30 Jun. 2012 1 Jan. 2012
Lu Thai (HongKong) HK $1 = RMB 0.8152 yuan HK $1 = RMB 0.8111 yuan
Item Items of income, expense and cash flow
Jan. – Jun. 2012 Jan. – Jun. 2011
Lu Thai (HongKong) HK $1 = RMB 0.8132 yuan HK $1 = RMB 0.8419 yuan
(Ⅶ) Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
Closing balance Opening balance
Excha Amount in
Item Amount in Amount in Exchange
nge foreign Amount in RMB
foreign currency RMB rate
rate currency
Cash: -- -- 679,890.17 -- -- 1,187,641.58
RMB -- -- 360,909.97 -- -- 918,446.06
USD 14,612.63 6.3249 92,423.42 7,639.07 6.3009 48,133.02
EUR 12,632.11 7.871 99,427.33 16,632.11 8.1625 135,759.59
JPY 225,638.00 0.0796 17,960.78 439,638.00 0.0811 35,654.64
HKD 74,764.53 0.8152 60,948.05 1,644.44 0.8107 1,333.15
THP 120.19 0.1994 23.97 120.19 0.1991 23.93
SGD 91.90 4.969 456.65 91.90 4.8569 446.35
GBP 1,794.36 9.8169 17,615.05 1,794.36 9.7116 17,426.11
AUD 4,746.03 6.3474 30,124.95 4,746.03 6.4093 30,418.73
Bank deposit: -- -- 410,711,633.46 -- -- 804,149,797.35
RMB -- -- 174,835,777.64 -- -- 671,198,883.94
USD 34,955,749.55 6.3249 221,091,620.32 14,694,594.59 6.3009 92,589,171.06
EUR 233,570.73 7.871 1,838,435.22 954,250.12 8.1625 7,789,066.60
130,885,536.0
JPY 14,811,697.00 0.0796 1,179,011.09 0.0811 10,614,816.98
0
HKD 14,432,353.25 0.8152 11,765,254.37 23,013,199.11 0.8107 18,656,800.53
CHF 232.90 6.59 1,534.82 492,070.99 6.7085 3,301,058.24
Other monetary funds: -- -- 28,287,583.48 -- -- 5,810,708.00
RMB -- -- -- --
USD 4,472,379.91 6.3249 28,287,355.69 922,179.97 6.3009 5,810,563.77
EUR 28.93 7.871 227.71 17.67 8.1625 144.23
JPY 1.00 0.0796 0.08
Total -- -- 439,679,107.11 -- -- 811,148,146.93
Special explanation shall be made for the accounts limited by being mortgaged, pledged or frozen, deposited overseas or with
potential collecting risks:
① USD, EUR and JPY deposit in the other monetary fund is foreign currency payment, from which the Company exported the
products, being in verification stage in accordance with the State Administration of Foreign Exchange.
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
② As of 30 Jun. 2012, monetary funds the Group deposited in overseas translated into RMB 11,817,837.17 (RMB 18,656,426.70 on
31 Dec. 2011), all of which was monetary fund deposit of holding subsidy Luthai (Hongkong).
2. Trading financial assets
(1) Trading financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
Trading bonds investment
Trading equity instruments investment
The financial assets which are measured at their
fair values and the variation of which is recorded
into the profits and losses of the current period
Derivative financial assets 20,939,380.00
Hedging instruments
Others
Total 20,939,380.00
(2) Trading financial assets with realizable limit
Unit: RMB Yuan
Trading restriction or other significant limits in
Item Closing balance
realization
(3) Hedging instruments and notes to relevant hedging transaction
3. Notes receivable
(1) Category of notes receivable
Unit: RMB Yuan
Category Closing balance Opening balance
Bank acceptance bill 13,037,336.30 59,855,568.33
Letter of credit 95,239,541.43 100,644,229.43
Total 108,276,877.73 160,499,797.76
(2) Notes receivable pledged at period-end
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Total -- -- --
Notes:
(3) Notes transferred to accounts receivable because drawer of the notes fails to execute the contract or
agreement, and undue notes endorsed to other parties at the end of the period
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Total -- -- --
Notes:
Undue notes endorsed to other parties by the Company
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Qingdao Haoshilai
18 Apr. 2012 17 Oct. 2012 1,000,000.00
Suits Co., Ltd.
Jiangsu Baozitou
11 May 2012 9 Nov. 2012 1,000,000.00
Fashion Co., Ltd.
Jiangsu Baozitou
1 Feb. 2012 1 Aug. 2012 1,000,000.00
Fashion Co., Ltd.
Zhejiang Tianchi
25 May 2012 21 Nov. 2012 940,000.00
Costume Co., Ltd.
Qingdao Haoshilai
14 Mar. 2012 13 Sep. 2012 870,000.00
Suits Co., Ltd.
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Total -- -- 5,590,000.00 --
Note:
Notes of bank acceptance bill that already discounted or pledged.
4. Dividends receivable
Unit: RMB Yuan
Increase in current
Item Opening balance Decrease in current period Closing balance
period
Dividends receivable
aging less than one year
Of which:
Dividends receivable
aging over one year
Of which: -- -- -- --
Total
Note:
5. Interest receivable
(1) Interest receivable
Unit: RMB Yuan
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Total
(2) Overdue interest
Unit: RMB Yuan
Borrowing entity Overdue days (day) Amount of overdue interest
Total --
(3) Notes to interest receivable
6. Accounts receivable
(1) Accounts receivable listed by categories
Unit: RMB Yuan
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Accounts receivable with
significant single amount
and individually 0.00 0.00 0.00 0.00
withdrawn bad debt
provision
Accounts receivable for which bad debt provisions are made on the group basis
221,149,00 11,183,257. 212,016,3 10,688,493.9
Common business group 99.41% 5.06% 99.38% 5.04%
7.36 00 96.99 4
221,149,00 11,183,257. 212,016,3 10,688,493.9
Subtotal of the groups 99.41% 5.06% 99.38% 5.04%
7.36 00 96.99 4
Accounts receivable with
insignificant single
1,313,784.0 1,313,784.0 1,313,784
amount and individually 0.59% 100% 0.62% 1,313,784.00 100%
0 0 .00
withdrawn bad debt
provision
222,462,79 12,497,041. 213,330,1 12,002,277.9
Total -- -- -- --
1.36 00 80.99 4
Notes to category of accounts receivable:
Accounts receivable with significant single amount and individually withdrawn bad debt provision
□Applicable □Inapplicable
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Aging Book balance Provision for bad Book balance Provision for bad
Amount Proportion debts Amount Proportion debts
Within 1 year
Including: -- -- -- -- -- --
Subtotal of ithin 1
220,205,721.48 99.57% 11,010,286.08 211,216,781.24 99.62% 10,560,839.06
year
1-2 years 220,205,721.48 99.57% 11,010,286.08 211,216,781.24 99.62% 10,560,839.06
2-3 years 333,390.23 0.15% 33,339.02 498,209.46 0.24% 49,820.94
Over 3 years 433,367.86 0.2% 86,673.56 125,879.50 0.06% 25,175.90
3 to 4 years 176,527.79 0.08% 52,958.34 175,526.79 0.08% 52,658.04
4 to 5 years
Over 5 years
Total
Subtotal of within
221,149,007.36 -- 11,183,257.00 212,016,396.99 -- 10,688,493.94
1 year
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□Applicable √Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision
□Applicable √Inapplicable
Other closing individually insignificant but provisions for bad debts individually accounts receivable:
√Applicable □Inapplicable
Unit: RMB Yuan
Content of accounts
Book value Provision for bad debts Withdrawal proportion Reason for withdrawal
receivable
It was receivables of
subsidiary Xinsheng
Power aging over 3 three
years. As Xinsheng
Zichuan Liaozhai Hotel Power is in bad operation
1,168,548.00 1,168,548.00 100%
Co., Ltd. and barely meet the
payment that the
Company made
provision in full amount
of its due account.
It was receivables of
subsidiary Xinsheng
Power aging over 3 three
years. As Xinsheng
ZIBO HUAYANG Power is in bad operation
145,236.00 145,236.00 100%
BLANKET CO., LTD and barely meet the
payment that the
Company made
provision in full amount
of its due account.
Total 1,313,784.00 1,313,784.00 100% --
(2) Accounts receivable reversed or collected in the reporting period
Unit: RMB Yuan
Reversed or collected
Recognition basis of
Content of accounts Reversed or amount of the Reversed or collected
original bad debt
receivable collected reason accrued bad debt amount
provision
provision
Total -- -- --
The withdrawal of bad debt provision of accounts receivable with significant single amount or insignificant single amount but
individually made impairment test at the end of reporting period:
Withdrawing
Content Book balance Bad debt amount Reason
proportion（%）
Total -- --
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Notes to accounts receivable with insignificant single amount but large risks of groups after grouping by credit
risks characteristics:
(3) The write-off accounts receivable
Unit: RMB Yuan
Nature of Related party
Name of entity accounts Write-off time Write-off amount Write-off reason transaction or
receivable not?
Total -- -- -- --
Notes to write off of accounts receivable:
(4) Particulars about accounts receivable due to shareholders holding 5% (including 5%) voting rights of
the Company
□ Applicable √ Inapplicable
(5) Information of top 5 accounts receivable:
Unit: RMB Yuan
The relationship with
Name of entity Amount Aging Proportion
the Company
Li & Fung Limited Non-related customer 57,855,039.26 Within 1 year 26%
TAL Non-related customer 38,669,219.87 Within 1 year 17.38%
Central Heating
Office of Zichuan Non-related customer 11,736,069.99 Within 1 year 5.28%
District, Zibo
Zibo Power Supply
Non-related customer 7,725,260.22 Within 1 year 3.47%
Company
Chen Feng (Jin Tan)
Non-related customer 6,822,022.16 Within 1 year 3.07%
Garments Co., Ltd.
Total -- 122,807,611.50 -- 55.2%
(6) The amounts due from related parties
Unit: RMB Yuan
The relationship with the
Name of entity Amount Proportion
Company
Total --
(7) Information of accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination
Item Amount of termination
of recognition
Total
(8) If securitization is carried out on accounts receivable as the underlying assets, please list amount of assets and
liabilities arising from further involvement
Unit: RMB Yuan
Item Period-end
Assets:
Subtotal of assets
Liabilities:
Subtotal of liabilities
7. Other accounts receivable
(1) Other accounts receivable disclosed by type:
Unit: RMB Yuan
Closing balance Opening balance
Provision for Provision for doubtful
Category Balance Balance
doubtful debts debts
Amount Proporti Amount Proporti Amount Proportio Amount Proporti
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
on (%) on (%) n (%) on (%)
Other accounts
receivable that is
individually
0.00 0.00 0.00 0.00
significant and
provisions for bad
debts individually
Other accounts receivable that provisions for bad debts by group
Common business 128,090,35 14,757,078. 86,643,935. 12,109,557.2
100% 11.52% 100% 13.98%
group 0.43 86 83 3
128,090,35 14,757,078. 86,643,935. 12,109,557.2
Subtotal of group 100% 11.52% 100% 13.98%
0.43 86 83 3
Other accounts
receivable that is
individually
insignificant but
provisions for bad
debts individually
128,090,35 14,757,078. 86,643,935. 12,109,557.2
Total -- -- -- --
0.43 86 83 3
Notes for categories of other accounts receivable:
Other closing accounts receivable that is individually significant and provisions for bad debts individually.
□Applicable√ Inapplicable
In the group, other accounts receivable that provisions for bad debts by aging analysis:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Period-end Period-begin
Book balance Book balance
Aging Provision for Provision for bad
Propor Propor
Amount bad debts Amount debts
tion tion
Within 1 year
Including:
67.36 59.17
Within 1 year 86,282,622.56 4,314,131.13 51,271,519.53 2,563,575.98
% %
Subtotal of within 1 67.36 59.17
86,282,622.56 4,314,131.13 51,271,519.53 2,563,575.98
year % %
1-2 years 8,614,222.29 6.73% 861,422.23 4,489,922.85 5.18% 448,992.29
2-3 years 3,765,261.80 2.94% 753,052.37 1,677,590.86 1.94% 335,518.18
22.97 33.71
Over 3 years 29,428,243.78 8,828,473.13 29,204,902.59 8,761,470.78
% %
3 to 4 years
4 to 5 years
Over 5 years
Total 128,090,350.43 -- 14,757,078.86 86,643,935.83 -- 12,109,557.23
In the group, other accounts receivable that provisions for bad debts by balance percentage:
□Applicable√ Inapplicable
In the group, other accounts receivable that provisions for bad debts by other methods:
□Applicable√ Inapplicable
Other closing individually insignificant but provisions for bad debts individually accounts receivable:
√ Applicable □ Inapplicable
(2) Information of other accounts receivable reversed or recovered in the reporting period
Unit: RMB Yuan
Reason for Basis for Accrued amount
Other accounts Amount of reversed
reversed or determination of bad before reversal or
receivable or recovered
recovered debts provision recovery
Total -- -- --
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Withdrawal of closing individually significant or insignificant but provisions for bad debts individually accounts receivable:
Provision for bad Withdrawal
Content Book balance Reason
debts percentage
Total -- --
Notes of individually insignificant but was of big risk after grouped by credit risk other accounts receivable:
(3) Information of other accounts receivable written off in the reporting period
Unit: RMB Yuan
Nature of other Whether arising
Name of Write off
accounts Write off date Write off reason from related party
company amount
receivable transactions or not
Total -- -- -- --
Notes of written-off of other accounts receivable:
(4) Other accounts receivable is due from shareholders with more than 5% (including 5%) of the voting
shares of the Company
□ Applicable √ Inapplicable
(5) Nature or details of other significant accounts receivable
Unit: RMB Yuan
Nature or details of
Name of entity Amount Proportion of the total (%)
the amount
Total --
Notes:
(6) Information of top five other accounts receivable
Unit: RMB Yuan
Relationship with the Proportion of the
Name of entity Amount Aging
Company total (%)
Export refund tax Not related
49,927,235.33 Within 1 year 38.98%
receivable relationship
Tianhong State Own Within 1 year, 1 to 2
Not related
Assets Investment and 18,801,994.40 years, more than 3 14.68%
Business Co., Ltd.
relationship
years
Contracter of cotton Not related
5,507,479.67 Within 1 year 4.3%
field relationship
Wage margin of
Within 1 year, 1 to 2
labourer of Zichuan Not related
2,955,620.10 years, more than 3 2.31%
District of Zibo relationship
years
Municipal
Bureau of Finance of
Not related
Zichuan District of 2,665,685.60 Over 3 years 2.08%
Zibo
relationship
Total -- 79,858,015.10 -- 62.35%
(7) Information of the amounts due from related parties
Unit: RMB Yuan
Relationship with the
Name of entity Amount Proportion
Company
Total --
(8) Information of other accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination
Item Amount of termination
of recognition
Total
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(9) If securitization is carried out on other accounts receivable as the underlying assets, please list amount
of assets and liabilities arising from further involvement
Unit: RMB Yuan
Item Closing balance
Assets:
Subtotal of assets
Liabilities:
Subtotal of liabilities
8. Prepayment
(1) List by aging analysis:
Unit: RMB Yuan
Closing balance Opening balance
Aging Proportion Proportion
Amount Amount
(%) (%)
Within 1
167,347,853.46 97.07% 303,864,716.05 99.8%
year
1 year to 2
4,541,975.92 2.63% 142,552.71 0.05%
years
2 years to 3
315,366.43 0.18% 447,247.30 0.15%
years
Over 3 years 212,028.46 0.12% 14,857.08 0%
Total 172,417,224.27 -- 304,469,373.14 --
Notes of aging of prepayment:
(2) Information of the top 5 prepayment
Unit: RMB Yuan
Relationship with the
Name of entity Amount Aging Reason for unsettled
Company
Non-related-party Advance material
Jam Smith Company 50,855,150.81 30 Jun. 2012
supplier payment
BRIGHANN
COTTON Non-related-party Advance material
16,696,468.43 30 Jun. 2012
MARKETING PTY supplier payment
LTD
Zibo Power
SupplyCompany of Non-related-party Advance material
17,216,789.26 30 Jun. 2012
Shandong Electricity supplier payment
Power Corporation
Non-related-party Advance material
Allenberg Cotton Co. 15,290,805.13 30 Jun. 2012
supplier payment
Huahong Cotton
Machine Technology Non-related-party Advance material
6,053,445.24 31 Mar. 2012
Service Center of supplier payment
Aqsu
Total -- 106,112,658.87 -- --
Notes of important companies of prepayment:
(3) Information about amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in prepayment
□ Applicable √ Inapplicable
(4) Notes of prepayment
9. Inventory
(1) Category
Unit: RMB Yuan
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Closing balance Opening balance
Impairment
Item Impairment of
Book balance of Book value Book balance Book value
inventories
inventories
572,484,455.6 596,471,983.5 596,471,983.5
Raw materials 572,484,455.65
5 5 5
Construction 476,352,579.7 568,544,948.1 568,544,948.1
476,352,579.76
contract assets 6 5 5
39,596,505.3 626,170,402.9 531,208,097.4 474,351,481.3
Inventory goods 665,766,908.23 56,856,616.19
2 1 9 0
Turnover material
Consumable
biological assets
Assigned
processing 22,194,586.50 22,194,586.50 27,542,842.92 27,542,842.92
products
1,736,798,530.1 39,596,505.3 1,697,202,024. 1,723,767,872. 1,666,911,255.
Total 56,856,616.19
4 2 82 11 92
(2) Impairment of inventories
Unit: RMB Yuan
Decrease
Category Opening balance Increase Closing balance
Reversal Written off
Raw materials
Construction
contract assets
Inventory goods 56,856,616.19 0.00 0.00 17,260,110.87 39,596,505.32
Turnover material
Consumable
biological assets
Total 56,856,616.19 0.00 0.00 17,260,110.87 39,596,505.32
(3) Details of provision for falling price of inventories
Proportion of reversal of
Basis on provision for provision for impairment of
Item Reasons for reversal
falling price of inventories inventories to closing
balance
Raw materials
On the Balance Sheet Date,
inventory will be measured
at its cost and realizable net
value, which is lower. When
realizable net value is lower
than cost, make provision
for falling price of inventory.
Provision for falling price of
inventory is withdrawn by
the difference between cost
of each item of inventory
Inventory goods and its realizable net value.
Construction contract assets
Turnover material
Consumable biological
assets
Notes of inventory:
10. Other current assets
Unit: RMB Yuan
110
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Item Closing balance Opening balance
Total
Notes of other current assets:
11. Available-for-sale financial assets
(1) Information of available-for-sale financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
Available-for-sale bonds
Available-for-sale equity instruments
Others
Total
In the reporting period, the Company reclassified the held-to-maturity investment into available-for-sale financial assets, a total of
RMB0.00 was reclassified, which takes 0% of total matured investment before reclassification.
Notes of available-for-sale financial assets
(2) Long-term liability investment of available-for-sale financial assets
Unit: RMB Yuan
Accrued
Interest in
Initial accounts
Matured Opening the Closing
Item Category Balance investment receivable
date balance reporting balance
cost or received
period
interest
Total -- -- --
Notes of long-term liability investment of available-for-sale financial assets:
12. Held-to-maturity investment
(1) Information
Unit: RMB Yuan
Item Closing book balance Opening book balance
Total
Notes of held-to-maturity investment:
(2) Information of held-to-maturity investment sold in the reporting period but was not matured
Unit: RMB Yuan
Percentage of the investment amount before
Item Amount
sales
Total --
Notes of undue held-to-maturity investment sold in the reporting period:
13. Long-term accounts receivable
Unit: RMB Yuan
Category Closing balance Opening balance
Financing leases
Including: unrealized
financing gains
Installment sales
Installment offering service
Others
Total
14. Investment to joint ventures and associated enterprises
Unit: RMB Yuan
Name Nature Nature Percent Voting Total Total Net
Registr Legal Registe Total Net
of of of Curren age of percent closing operati profit
ation represe red closing closing
investe enterpri busines cy holding age of liabiliti on of the
place ntative capital assets assets
e ses s shares the es revenu reporti
111
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
of the Compa e of the ng
Compa ny in reporti period
ny investe ng
e period
I. Joint ventures
II. Associated enterprises
Notes if significant differences exist between the important accounting policies and accounting estimations of joint ventures,
associated enterprises and the Company:
15. Long-term equity investment
112
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(1) List of long-term equity investment
Unit: RMB Yuan
Explanation for
indifferences
Withdrawn
between the
Share holding Voting impairment Cash bonus in
Accounting Initial Opening Increase/decrea share holding Impairment
Investee Closing balance percentage in percentage in provision in the the reporting
method investment cost balance se percentage and provision
investee investee reporting period
voting
period
percentage in
investee
Zibo
Chengshun
Heating Co.,
Ltd.
Cost method 160,000.00 160,000.00 160,000.00 2% 2%
(hereinafter
refer to as
―Chengshun
Heating‖ )
Zibo Limin
Walling
Material Co., Cost method 1,500,000.00 1,500,000.00 -1,500,000.00
Ltd. (Limin
Walling)
Yantai
Rongchang
Pharmacy Co.,
Ltd.
Cost method 55,282,600.00 55,282,600.00 55,282,600.00 5.555% 5.555%
(hereinafter
refer to as
―Rongchang
Pharmacy‖)
Gaoqing
Hongqiao
Power Co., Ltd. Cost method 12,000,000.00 12,000,000.00 12,000,000.00 20.68% 20.68%
(Hongqiao
Power)
Total -- 68,942,600.00 68,942,600.00 -1,500,000.00 67,442,600.00 -- -- --
113
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(2) Information of the limitation on the capability to transfer capital to investee
Unit: RMB Yuan
Item that with limitation on the
Accumulated investment losses
capability to transfer capital to Reason for limitation
unrecognized in current period
investee
Notes of long-term equity investment:
16. Investment property
(1) Investment property calculated by cost
□ Applicable □ Inapplicable
(2) Investment property calculated by fair value
□ Applicable □ Inapplicable
Notes of investment property that altered calculated mode and failed to accomplish certification of property, and notes of reason that
the fail accomplish and estimated accomplish date
17. Fixed assets
(1) Fixed assets details
Unit: RMB Yuan
Opening book Decrease in the Closing book
Item Increase in the reporting period
balance reporting period balance
I. Total original book 5,947,370,403.3 6,749,486,956.1
807,594,808.96 5,478,256.09
value 2 9
Including: Property and 1,614,559,815.2 1,884,632,323.6
271,658,561.35 1,586,053.00
building 6 1
4,192,187,039.2 4,712,830,726.5
Machineries 524,140,892.41 3,497,205.09
0 2
Vehicles 61,174,305.72 2,896,362.22 325,407.00 63,745,260.94
Electronic equipments
79,449,243.14 8,898,992.98 69,591.00 88,278,645.12
and other
Increase in the Closing book
Opening book Withdrawal in the Decrease in the
-- reporting balance in the
balance reporting period reporting period
period reporting period
II. Accumulated 2,425,852,353.8 2,619,190,776.6
0.00 197,372,381.53 4,033,958.71
depreciation 3 5
Including: Property and
459,745,300.51 34,236,088.77 864,572.64 493,116,816.64
building
1,876,299,941.8 2,030,075,215.2
Machineries 156,589,161.27 2,813,887.87
7 7
Vehicles 37,702,631.71 2,874,900.70 292,866.30 40,284,666.11
Electronic equipments
52,104,479.74 3,672,230.79 62,631.90 55,714,078.63
and other
Closing book
Opening book
-- -- balance in the
balance
reporting period
III. The net book value 3,521,518,049.4 4,130,296,179.5
--
of fixed assets 9 4
Including: Property and 1,154,814,514.7 1,391,515,506.9
--
building 5 7
2,315,887,097.3 2,682,755,511.2
Machineries --
3 5
Vehicles 23,471,674.01 -- 23,460,594.83
Other equipment 27,344,763.40 -- 32,564,566.49
IV. Total impairment
35,445,076.07 -- 35,367,686.69
provision
Including: Property and
66,031.47 -- 66,031.47
building
114
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Machineries 35,195,517.93 -- 35,119,231.25
Vehicles 61,235.72 -- 61,235.72
Electronic equipments
122,290.95 -- 121,188.25
and other
V. Total book value of 3,486,072,973.4 4,094,928,492.8
--
fixed assets 2 5
Including: Property and 1,154,748,483.2 1,391,449,475.5
--
building 8 0
2,280,691,579.4 2,647,636,280.0
Machineries --
0 0
Vehicles 23,410,438.29 -- 23,399,359.11
Electronic equipments
27,222,472.45 -- 32,443,378.24
and other
Depreciation amount of this reporting period was RMB197,372,381.52; original value of RMB536,112,043.20 was transferred into
fixed assets from construction project.
(2) Temporary idle fixed assets
Unit: RMB Yuan
Original book Accrued Impairment
Item Net book value Note
value depreciation provision
Property and
building
Machineries
Vehicles
(3) Fixed assets leased in from financing lease
□ Applicable √ Inapplicable
(4) Fixed assets leased out from operation lease
√ Applicable □ Inapplicable
Unit: RMB Yuan
Category Closing book value
House and buildings 1,028,401.78
Machinery equipments
Vehicles
(5) Information of hold-for-sale fixed assets at period-end
Unit: RMB Yuan
Estimated disposal
Item Book value Fair value Estimated settle date
cost
(6) Information of fixed assets failed to accomplish certification of property
Item Reason Estimated accomplish date
Ongoing inspection, surveying,
Luqun Spinning workshop verification to application 31 Dec. 2012
procedures by Housing authorities
Ongoing inspection, surveying,
Comprehensive building 3rd factory
verification to application 31 Dec. 2012
of spinning
procedures by Housing authorities
Ongoing inspection, surveying,
Main factory building of 6# boiler of
verification to application 31 Dec. 2012
Xinsheng Power
procedures by Housing authorities
Notes of fixed assets:
Xinjing Luthai pledged house and buildings, machinery equipments and land use right with a net book value of RMB 36,809,409.52
for short-term borrowings of RMB 77,000,000.00 from the bank.
18. Construction in progress
(1)
Unit: RMB Yuan
Closing balance Opening balance
Item
Book Impairment Book value Book Impairment Book value
115
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
balance provision balance provision
Lu Thai Industry Park 2,050,609.26 2,050,609.26 1,582,502.44 1,582,502.44
Reform project of 8
6,651,874.15 6,651,874.15 1,250,810.63 1,250,810.63
million-meter yarn-dyed
Production line project of
25,670,940.3 25,670,940.3 105,799,838. 105,799,838.2
40 million-meter
high-grade yarn-dyed
8 8 29 9
Piece dying project 210,151.40 210,151.40 357,288.21 357,288.21
50 million-meter
61,325,970.7 61,325,970.7 320,423,966. 320,423,966.1
high-grade yarn-dyed
fabric project
9 9 10 0
Spinning project of
5,188,861.60 5,188,861.60 1,780,848.96 1,780,848.96
Xinjiang Luthai
Office district project of 15,961,662.1 15,961,662.1 14,182,206.6
14,182,206.64
Xinjiang Luthai 4 4 4
Power plant expansion 19,360,839.2 19,360,839.2 13,672,588.3
13,672,588.38
project 7 7 8
Production line project of 3
12,152,892.7
million-piece high-grade 6,139,108.27 6,139,108.27 12,152,892.72
2
shirts
Increasing production line
project of 0.23 million
2,207,404.28 2,207,404.28
spindle and 35,000
twister
Arrangement workshop
and project of Exhibition 9,328,906.53 9,328,906.53
Building of Luthai
55,218,759.5 55,218,759.5 30,962,979.1
Other small projects 0.00 30,962,979.17
6 6 7
209,315,087. 209,315,087. 502,165,921. 502,165,921.5
Total 0.00 0.00
63 63 54 4
116
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(2) Changes in significant construction in progress
Unit: RMB Yuan
Including:
Project Capitalizati
Transferred Capitalizati capitalizatio
Name of Opening Other input Project on of Source of Closing
Budget Increase to fixed on of n of
project balance decrease percentage process interest rate funding balance
assets interest interest this
of budget (%)
period
Lu Thai
3,600,000.0 1,582,502.4 2,050,609.2
Industry 468,106.82 95% 95% Other
Park
0 4 6
Reform
project of 8 180,000,000 1,250,810.6 5,401,063.5 6,651,874.1
98% 98% Other
million-mete .00 3 2 5
r yarn-dyed
Production
line project
Raise of
of 40 504,700,000 105,799,838 49,401,102. 129,530,000 25,670,940.
69% 69% funds and
million-mete .00 .29 09 .00 38
r high-grade
other
yarn-dyed
Piece dying 26,000,000.
357,288.21 147,136.81 98% 98% Other 210,151.40
project 00
50
million-mete
r high-grade 659,930,000 320,423,966 141,058,349 400,156,345 61,325,970.
68% 68% Other
yarn-dyed .00 .10 .73 .04 79
fabric
project
Spinning
project of 13,300,000. 1,780,848.9 3,672,789.5 5,188,861.6
264,776.90 97% 97% Other
Xinjiang 00 6 4 0
Luthai
Office
district
20,000,000. 14,182,206. 1,779,455.5 15,961,662.
project of 95% 95% Other
00 64 0 14
Xinjiang
Luthai
Power plant 36,000,000. 13,672,588. 5,688,250.8 53% 53% Other 19,360,839.
117
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
expansion 00 38 9 27
project
Production
line project
of 3 66,870,000. 12,152,892. 6,013,784.4 6,139,108.2
95% 95% Other
million-piec 00 72 5 7
e high-grade
shirts
Increasing
production
line project
of 0.23 928,860,000 2,207,404.2 2,207,404.2
0.24% 0.24% Other
million .00 8 8
spindle and
35,000
twister
Arrangemen
t workshop
and project
20,530,000. 9,328,906.5 9,328,906.5
of 45% 45% Other
00 3 3
Exhibition
Building of
Luthai
Other small 58,090,000. 30,962,979. 24,255,780. 55,218,759.
95% 95% Other
projects 00 17 39 56
2,517,880,0 502,165,921 243,261,209 536,112,043 209,315,087
Total 0.00 -- -- 0.00 0.00 -- --
00.00 .54 .29 .20 .63
Notes of changes in construction in progress:
118
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(3) Impairment provision of construction in progress
Unit: RMB Yuan
Increase in the Decrease in the Reason for
Item Opening amount Closing balance
reporting period reporting period withdrawal
Total 0.00 0.00 --
(4) Information of procedures of significant construction in progress
Item Project process Note
The process of the project is
50 million-meter high-grade yarn-dyed measured on basis of proportion of
68%
fabric project the actual cost occurred to total
contract projected cost
Production line project of 40
69% Ditto
million-meter high-grade yarn-dyed
Increasing production line project of
0.23 million spindle and 35,000 0.24% Ditto
twister
(5) Notes of construction in progress
19. Engineering materials
Unit: RMB Yuan
Increase in the Decrease in the
Item Opening balance Closing balance
reporting period reporting period
Specific materials 1,950,981.79 949,471.70 2,900,453.49
Specific equipments 37,795,616.03 249,756,952.51 249,651,056.13 37,901,512.41
Total 39,746,597.82 250,706,424.21 249,651,056.13 40,801,965.90
Notes of engineering materials:
20. Clearance of fixed assets
Unit: RMB Yuan
Reason for transferring to
Item Opening book value Closing book value
clearance
Total --
Notes of clearance process of fixed assets with a clearance term of over 1 year since the transfer into fixed assets:
21. Productive biological assets
(1) Calculated by cost
□Applicable □Inapplicable
(2) Calculated by fair value
□Applicable □Inapplicable
22. Oil and gas assets
Unit: RMB Yuan
Opening book Closing book
Item Increase Decrease
balance balance
I. Total original book
value
1. Property rights of
proved mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
II. Total accumulated
depreciation
1. Property rights of
proved mining area
2. Well and relevant
119
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
facilities a
III. Total accumulated
oil and gas assets
depreciation
1. Property rights of
proved mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
IV. Total book value of
oil and gas assets
1. Property rights of
proved mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
Notes of oil and gas assets:
23. Intangible assets
(1) Information
Unit: RMB Yuan
Increase in the Decrease in the
Item Opening balance Closing balance
reporting period reporting period
I. Total original book
350,923,245.11 22,302,556.41 0.00 373,225,801.52
value
Land use right 244,731,599.56 21,039,802.00 265,771,401.56
Land use right of
12,155,433.14 12,155,433.14
Xinsheng Power
Lufeng Weaving &
52,238,474.94 1,252,498.00 53,490,972.94
Dyeing-land use right
Luqun Textile-land
39,632,561.00 39,632,561.00
use right
Franchise of patent 1,985,176.47 1,985,176.47
Software use right 180,000.00 10,256.41 190,256.41
II. Accumulative
41,823,963.98 5,260,142.03 0.00 47,084,106.01
amortization
Land use right 33,044,202.43 3,799,533.93 36,843,736.36
Land use right of
2,930,592.94 253,671.66 3,184,264.60
Xinsheng Power
Lufeng Weaving &
2,094,836.38 547,815.44 2,642,651.82
Dyeing-land use right
Luqun Textile-land
3,513,728.27 418,346.10 3,932,074.37
use right
Franchise of patent 231,603.96 231,603.96 463,207.92
Software use right 9,000.00 9,170.94 18,170.94
III. Total net book
value of intangible 309,099,281.13 0.00 0.00 326,141,695.51
assets
Land use right 211,687,397.13 228,927,665.20
Land use right of
9,224,840.20 8,971,168.54
Xinsheng Power
Lufeng Weaving &
50,143,638.56 50,848,321.12
Dyeing-land use right
Luqun Textile-land
36,118,832.73 35,700,486.63
use right
120
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Franchise of patent 1,753,572.51 1,521,968.55
Software use right 171,000.00 172,085.47
IV. Total impairment
0.00 0.00 0.00 0.00
provision
Land use right
Land use right of
Xinsheng Power
Lufeng Weaving &
Dyeing-land use right
Luqun Textile-land
use right
Franchise of patent
Software use right
Total book value of
309,099,281.13 0.00 0.00 326,141,695.51
intangible assets
Land use right 211,687,397.13 228,927,665.20
Land use right of
9,224,840.20 8,971,168.54
Xinsheng Power
Lufeng Weaving &
50,143,638.56 50,848,321.12
Dyeing-land use right
Luqun Textile-land
36,118,832.73 35,700,486.63
use right
Franchise of patent 1,753,572.51 1,521,968.55
Software use right 171,000.00 172,085.47
Amortization was of RMB 5,260,142.03 in the reporting period.
(2) Company development expense
Unit: RMB Yuan
Decrease
Recognized into
Item Opening balance Increase Recognized as Closing balance
current
intangible assets
gains/losses
Total 0.00 0.00 0.00 0.00 0.00
Development expense percentage of total expenditure of R&D projects in the reporting period.
Percentage intangible assets arising from inner R&D of the Company of closing book value of intangible assets.
Notes of R&D projects of the Company, those that includes individual value of more than RMB 1 million and recognized with a
basis of assessed value, please disclose name of evaluation authority and method of evaluation:
(3) Information of intangible assets that failed to accomplish certification of property
24. Goodwill
Unit: RMB Yuan
Impairment
Name of investee or event Opening Increase in the Decrease in the
Closing balance provision at
that generated goodwill balance reporting period reporting period
period-end
Xinsheng Power 20,563,803.29 50,000.00 20,613,803.29 0.00
Total 20,563,803.29 50,000.00 0.00 20,613,803.29 0.00
Notes of test method of goodwill impairment and impairment withdrawal method:
25. Long-term amortization expense
Unit: RMB Yuan
Opening Amortization Closing Reason for
Item Increase Other decrease
balance balance balance other decrease
Total 0.00 0.00 0.00 0.00 0.00 --
Notes of long-term amortization expense:
121
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
26. Deferred tax assets and liabilities
(1) Deferred tax assets and liabilities are not listed as the net value after offset
√ Applicable □ Inapplicable
Deferred tax assets and liabilities that already recognized
Unit: RMB Yuan
Item Closing balance Opening balance
Deferred income tax assets:
Provision for assets impairment 17,563,384.58 20,001,738.16
Formation expenses
Deductible losses 2,676,933.88 2,676,933.88
Fair value changes on trading financial
1,516,147.50
assets
One-time listed decoration expenses 1,492,562.20 1,492,562.20
Offset unrealized internal profit 6,256,521.62 11,633,887.90
Payroll payable 14,416,113.01 14,416,113.01
Deferred income 9,738,671.79 9,840,240.68
Stock payment expense 2,535,759.69
Subtotal 56,196,094.27 60,061,475.83
Deferred income tax liabilities:
Estimated value of trading financial
instruments, derivative financial
instruments
Fair value changes on available-for-sale
financial assets that recognized into capital
reserves
Accumulated depreciation 2,133,545.52 2,121,768.09
Fair value change on trading financial
3,140,907.00
assets
Subtotal 2,133,545.52 5,262,675.09
List of unrecognized deferred income tax assets
Unit: RMB Yuan
Item Closing balance Opening balance
Deductible temporary
Deductible losses
Total
Deductible losses of unrecognized deferred income tax assets will due in the following years
Unit: RMB Yuan
Year Closing balance Opening balance Remark
Total --
List of taxable differences and deductible differences items
Unit: RMB Yuan
Temporary differences amount
Item
As at period-end As at period-begin
Taxable differences items
Accumulated depreciation 12,930,578.91 12,859,200.55
Fair value change on available-for-sale
20,939,380.00
financial assets
Subtotal 12,930,578.91 33,798,580.55
Deductible differences item
Provision for assets impairment 102,218,311.87 116,412,397.08
Fair value changes on trading financial
10,107,650.00
liabilities
One-time listed decoration expenses 9,429,958.34 9,429,958.34
Offset unrealized internal profit 41,710,144.16 77,559,252.68
Payroll payable 87,121,659.89 87,121,659.89
122
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Deferred income 64,924,478.57 65,601,604.49
Deductible losses 10,707,735.52 10,707,735.52
Stock payment expense 16,905,064.60
Subtotal 343,125,002.95 366,832,608.00
(2) Deferred income tax assets and liabilities are listed as the net value after offset
□Applicable √ Inapplicable
Notes of deferred income tax assets and liabilities
27. List of provision for assets impairment
Unit: RMB Yuan
Opening book Decrease Closing book
Item Increase
balance Reversal Written off balance
27,254,119.8
I. Provision for bad debt 24,111,835.17 3,155,937.27 13,652.58
6
II. Provision for inventory 39,596,505.3
56,856,616.19 0.00 0.00 17,260,110.87
falling price 2
III. Impairment provision
of available-for-sale
financial assets
IV. Impairment provision
of held-to-maturity
investment
V. Impairment provision
of long-term equity
investment
VI. Impairment provision
of investment property
VII. Impairment 35,367,686.6
35,445,076.07 77,389.38
provision of fixed assets 9
VIII. Impairment
provision of engineering
materials
IX. Impairment provision
of construction in 0.00 0.00
progress
X. Impairment provision
of productive biological
assets
Including: mature
productive biological
assets
XI. Impairment provision
of oil gas assets
XII. Impairment
provision of intangible 0.00 0.00 0.00
assets
XIII. Impairment
0.00
provision of goodwill
XIV. Others
102,218,311.
Total 116,413,527.43 3,155,937.27 0.00 17,351,152.83
87
Notes of the list of assets impairment:
28. Other non-current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Advance payment for land 7,890,690.00 25,402,452.00
Total 7,890,690.00 25,402,452.00
123
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Notes of other non-current assets
29. Short-term loan
(1)Category
Unit: RMB Yuan
Category Closing balance Opening balance
Pledge loan
Mortgage loan 207,000,000.00 125,000,000.00
Guarantee loan 20,000,000.00 20,000,000.00
Credit loan 874,618,199.90 1,006,414,422.38
Total 1,101,618,199.90 1,151,414,422.38
Notes of short-term loan:
(2) List of unsettled mature short-term loan
Unit: RMB Yuan
Amount of Reason for
Name of creditor Rate of loan Usage Estimated settle date
loan unsettlement
Total 0.00 -- -- -- --
RMB000 was paid back after the Balance Sheet Date.
Notes of short-term loan, for those gaining extended term, notes term of extension and new mature date:
30. Trading financial liabilities
Unit: RMB Yuan
Item Closing fair value Opening fair value
Public trading bonds
Financial liabilities designed to
recognized with a basis on fair value and
with its changes recognized into current
gains and losses
Derivative financial liabilities 10,107,650.00 0.00
Other financial liabilities
Total 10,107,650.00 0.00
Notes of trading financial liabilities:
31. Notes payable
Unit: RMB Yuan
Category Closing balance Opening balance
Trade acceptance bill 18,259,051.11 11,981,603.44
Bank acceptance bill
Total 18,259,051.11 11,981,603.44
RMB18,259,051.11 will be due in next fiscal period.
Notes of notes payable:
32. Accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 269,469,164.16 273,542,707.03
1 to 2 years 3,386,268.04 3,901,412.46
2 to 3 years 2,081,507.11 1,181,009.73
Over 3 years 5,795,637.91 5,737,544.29
Total 280,732,577.22 284,362,673.51
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares of the
Company
□ Applicable √ Inapplicable
Notes of the accounts payable aging over one year:
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
33. Advance from customers
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 64,812,914.20 88,987,801.77
1 to 2 years 1,975,257.41 208,454.27
2 to 3 years 184,730.72 563,776.62
Over 3 years 285,841.47 1,266,327.05
Total 67,258,743.80 91,026,359.71
(2) Advanced from customers from shareholders with more than 5% (including 5%) of the voting shares of
the Company
□ Applicable √ Inapplicable
Notes of significant advance from customers aging over one year:
34. Payroll payable
Unit: RMB Yuan
Item Opening book Increase Decrease Closing book
balance balance
I. Salary, bonus,
allowance, 416,038,868.07 406,980,175.33 523,882,573.28 299,136,470.12
subsidy
II. Employee
43,789,026.01 43,789,026.01
welfare
III. Social
1,949,051.66 107,965,921.11 90,814,545.84 19,100,426.93
insurance
Including: 1.
Medical
217,826.11 25,881,085.58 21,617,676.76 4,481,234.93
insurance
premiums
2. Basic
1,528,304.65 70,807,697.92 59,322,358.06 13,013,644.51
pension benefits
3.
Unemployment 121,116.42 7,622,371.33 6,370,141.16 1,373,346.59
insurance
4.
Work-related 32,070.61 2,142,098.98 2,053,631.74 120,537.85
injury insurance
5.
Maternity 49,733.87 1,512,667.30 1,450,738.12 111,663.05
insurance
IV. Housing fund 69,361.01 5,739,314.22 5,371,655.45 437,019.78
V. Redemption
for terminations
of labor contract
VI. Others 17,049,134.65 12,307,702.92 8,948,261.19 20,408,576.38
Including: Labour
union budget and
17,049,134.65 9,244,215.30 5,884,773.57 20,408,576.38
employee
education budget
Non-monetary 3,063,487.62 3,063,487.62
benefits
Total 435,106,415.39 576,782,139.59 672,806,061.77 339,082,493.21
RMB 0.00 is the amounts in arrears in the payroll payable.
The labor union budget and employee education budget is RMB 5,884,773.57, and the non-monetary benefits are RMB 3,063,487.62,
as well as the compensation for terminating the labor contract is RMB 0.00.
The estimated distribution date and amount as well as other arrangements for payroll payable:
Payroll payable is usually distributed on 5th of the following month, and the amount for in need is transferred into an account of
125
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
payroll service bank before the said date.
35. Taxes payable
Unit: RMB Yuan
Item Closing balance Opening balance
Value-added tax -69,547,680.12 -30,047,161.67
Consumption tax
Business tax 469,206.32 678,956.29
Corporate income tax 22,935,812.10 36,607,437.37
Personal income tax 15,931,724.02 1,751,854.91
Urban maintenance and construction tax 4,869,121.70 9,259,206.97
Stamp tax 269,181.63 380,253.54
Property tax 1,301,934.15 2,425,296.90
Land use tax 1,869,468.79 1,459,476.32
Education surtax 2,111,945.03 4,089,602.35
Local education surtax 1,407,963.25 2,647,685.57
Local water conservancy facility construction
702,611.01 1,323,842.79
fund
Total -17,678,712.12 30,576,451.34
Notes of taxes payable: for the taxable income of branch companies and factories approved to be inter-adjusted by their local tax
authorities, the Company shall specified their calculation procedure.
36. Interest payable
Unit: RMB Yuan
Item Closing balance Opening balance
Interest payable on long-term borrowings that
interest was paid by stages and principle was 95,214.71 135,727.46
repay upon due
Interest of corporate bond
Interest payable on short-term borrowings 3,072,082.83 1,977,415.76
Total 3,167,297.54 2,113,143.22
Notes:
37. Dividends payable
Unit: RMB Yuan
Reason for unsettlement over
Name of company Closing balance Opening balance
1 year
Minority shareholders’
dividends paid by subsidiaries
Individual shareholders didn’t
Individual shareholders’
442,309.44 442,309.44 withdraw cash dividends on
dividends paid by the Group
previous years
Dividends payable on restricted
3,945,200.00
shares paid by the Group
Total 4,387,509.44 442,309.44 --
Notes:
38. Other accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 56,171,583.98 46,923,901.20
1 to 2 years 13,643,129.16 11,251,406.33
2 to 3 years 13,001,173.14 13,432,423.50
Over 3 years 31,985,747.01 39,173,064.89
Total 114,801,633.29 110,780,795.92
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(2) Other accounts payable from shareholders with more than 5% (including 5%) of the voting shares of the
Company
√ Applicable □ Inapplicable
Unit: RMB Yuan
Name of entity Closing balance Opening balance
Lucheng Textile 20,900,000.00 20,900,000.00
Total 20,900,000.00 20,900,000.00
(3) Notes of the other large amount accounts payable aging over 1 year
Name of creditor Amount Reason for Whether pay
unsettlement after the
Balance Sheet
Date or not?
11,925,000.00 Received earnest
Cotton and Jute Company money for Sale No
Contract
9,516,043.40 Receiving
Contracting fees in locus contractus contracting fees in No
locus contractus
Deposit for trees planting 9,257,462.50 Deposit No
Total 30,698,505.90
(4) Notes of other accounts payable with significant amount
Name of creditor Closing balance Nature or content
Lucheng Textile 20,900,000.00 Flow borrowings
11,925,000.00 Earnest money for
Cotton and Jute Company
Cotton Sale Contract
9,516,043.40 Contracting fees in
Contracting fees in locus contractus
locus contractus
Deposit for trees planting 9,257,462.50 Deposit
Employee’s housing deposit 6,995,000.00 Deposit
Total 58,593,505.90
39. Estimated liabilities
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
External offering
guarantee
Unsettled lawsuit
Product quality
guarantee
Responsibility of
reorganization
Dismissal welfare
Loss contract to be
executed
Other
Total
Notes:
40. Non-current liabilities due within 1 year
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Long-term loan due within 1 year 36,531,875.00 69,058,740.00
Bonds payable due within 1 year
Long-term accounts payable due within 1
127
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
year
Total 36,531,875.00 69,058,740.00
(2) Long-term loan due within 1 year
Long-term loan due within 1 year
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan
Mortgage loan
Guarantee loan
Credit loan 36,531,875.00 69,058,740.00
Total 36,531,875.00 69,058,740.00
RMB000 of long-term loan due within 1 year was of mature loan with extended term.
Top five long-term loan due within 1 year
Unit: RMB Yuan
Closing balance Opening balance
Starting Foreign Foreign
Creditor Ending date Currency Rate (%) RMB RMB
date currency currency
balance balance
balance balance
Societe
Generale
29 Sep. 28 Sep. 2,400,000.0 15,179,760. 2,400,000.0 15,122,160.
Private USD 3.5%
2010 2012 0 00 0 00
Banking
Wuhan
China
Constructio
n Bank
1,000,000.0 7,871,000.0
Corporation 5 Mar. 2007 5 Mar. 2013 EUR 2.82%
0 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
26 Mar. 26 Sep. 2,846,205.0 2,835,405.0
Corporation USD 1.52% 450,000.00 450,000.00
2007 2012 0 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
26 Mar. 26 Dec. 2,846,205.0 2,835,405.0
Corporation USD 1.52% 450,000.00 450,000.00
2007 2012 0 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
26 Mar. 25 Mar. 2,846,205.0
Corporation USD 1.52% 450,000.00
2007 2013 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
29 Mar. 29 Sep. 1,647,500.0
Corporation CHF 2.56% 250,000.00
2007 2012 0
Zibo
Zichuan
Subbranch
128
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
China
Constructio
n Bank
29 Mar. 29 Dec. 1,647,500.0
Corporation CHF 2.56% 250,000.00
2007 2012 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
29 Mar. 28 Mar. 1,647,500.0
Corporation CHF 2.56% 250,000.00
2007 2013 0
Zibo
Zichuan
Subbranch
Societe
Generale
22 Jun. 22 Jun. 3,600,000.0 22,683,240.
Private USD 3.8%
2010 2012 0 00
Banking
Wuhan
Societe
Generale
29 Sep. 29 Mar. 5,040,720.0
Private USD 3.5% 800,000.00
2010 2012 0
Banking
Wuhan
China
Constructio
n Bank
1,000,000.0 8,162,500.0
Corporation 5 Mar. 2007 5 Mar. 2012 EUR 2.82%
0 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
26 Mar. 26 Mar. 2,835,405.0
Corporation USD 1.52% 450,000.00
2007 2012 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
26 Mar. 26 Jun. 2,835,405.0
Corporation USD 1.52% 450,000.00
2007 2012 0
Zibo
Zichuan
Subbranch
36,531,875. 62,350,240.
Total -- -- -- -- -- --
00 00
Mature loan of long-term loan due within 1 year:
Unit: RMB Yuan
Amount of Annual rate Reason for Estimated
Creditor Overdue date Usage
loan (%) unsettlement settle date
Total 0.00 -- -- -- -- --
RMB000 was paid back after Balance Sheet Date:
Notes of long-term borrowings due within 1 year:
(3)Bonds payable due within 1 year
Unit: RMB Yuan
Issuance Issuing Opening Accrued Interest Closing Closing
Name Par value Term
date amount interest interest in paid in the interest balance
129
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
payable current reporting payable
period period
Notes:
(4) Long-term accounts payable due within 1 year
Unit: RMB Yuan
Accrued Closing
Creditor Term Initial amount Rate (%) Conditions
interest balance
Notes of long-term accounts payable due within 1 year:
41. Other current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Total
Notes:
42. Long-term loan
(1)Category of long-term loan
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan
Mortgage loan
Guarantee loan
Credit loan 36,531,875.00 81,733,770.00
Less: long-term loan due within 1 year -36,531,875.00 -69,058,740.00
Total 0.00 12,675,030.00
Notes:
(2)The top five long-term loans
Unit: RMB Yuan
Closing balance Opening balance
Starting Foreign Foreign
Creditor Ending date Currency Rate (%) RMB RMB
date currency currency
amount amount
amount amount
China
Constructio
n Bank
12 Mar. 1,000,000.0 8,162,500.0
Corporation 5 Mar. 2007 EUR 2.82%
2013 0 0
Zibo
Zichuan
Subbranch
China
Constructio
n Bank
26 Mar. 25 Mar. 2,835,405.0
Corporation USD 1.52% 450,000.00
2007 2013 0
Zibo
Zichuan
Subbranch
130
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
China
Constructio
n Bank
29 Mar. 28 Mar. 1,677,125.0
Corporation CHF 2.56% 250,000.00
2007 2013 0
Zibo
Zichuan
Subbranch
12,675,030.
Total -- -- -- -- -- 0.00 --
00
Notes of long-term loan: for the long-term loans arising from mature loans with extended term, the Company shall explain the
conditions of extension, principal, interest, expected repayment arrangement:
43. Bonds payable
Unit: RMB Yuan
Interest
Opening Closing Closing
Issuance Issuing paid in the Closing
Name Par value Term interest interest interest
date amount reporting balance
payable payable payable
period
Notes of bonds payable, including the conditions and date of conversion of the convertible corporate bonds:
44. Long-term payable
(1) The top five long-term payable
Unit: RMB Yuan
Accrued Closing Conditions of
Company Term Initial amount Rate (%)
interest balance loan
Power bonds
9,735,560.00 9,735,560.00 Credit
payable
(2)List of the financing lease payable under the long-term loan
Unit: RMB Yuan
Closing balance Opening balance
Company
Foreign currency RMB Foreign currency RMB
Total 0.00 0.00 0.00 0.00
RMB000 was guarantee for the Company’s financing lease provided by the independent third party.
Notes of the long-term payable:
45. Specific payable
Unit: RMB Yuan
Increase in Decrease in
Opening Closing
Item reporting reporting Note
balance balance
period period
Total --
Notes of specific payable:
46. Other non-current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Deferred income 64,924,478.57 65,601,604.49
Other 1,840,000.00 1,840,000.00
Total 66,764,478.57 67,441,604.49
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Notes of other non-current liabilities, including each government grants relevant to assets and income received in the reporting period
and their closing amounts:
In the reporting period, other non-current liabilities mainly were government grants relevant to assets on land
subsidies, all of which would continually amortized in service term till the end.
47. Share capital
Unit: RMB Yuan
Increase/Decrease (+/-)
Opening Capitalization Closing
Issuing new
balance Bonus shares of public Other Subtotal balance
shares
reserves
1,008,954,80 1,008,954,80
Total shares 0.00
0.00 0.00
Notes of changes in share capital, for those action of increasing capital or decreasing capital in the reporting period, the Company
shall disclose the name of the accounting firm executing the capital verification and document number of the capital verification
report; for joint-stock companies running for less than three years, only the net assets shall be specified for particulars before
establishment; while for case of totally changing the limited liability companies into joint-stock companies, capital verification on the
establishment shall be specified:
48. Treasury stock
Notes of treasury stock:
49. Special reserves
Notes of special reserves:
50. Capital reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Capital premium (share
1,121,877,528.91 1,121,877,528.91
capital premium)
Other capital reserves 75,883,113.15 31,344,986.79 107,228,099.94
Other comprehensive
2,350,000.00 2,350,000.00
income
Total 1,200,110,642.06 31,344,986.79 0.00 1,231,455,628.85
Notes:
The increase of RMB 31,344,986.79 on other capital reserves was mainly beecause RMB 31,344,966.24 was recoginzed on fair value
of share-based instruments that settled by equity method.
51. Surplus reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 512,554,180.18 512,554,180.18
Discretional surplus
3,341,572.58 3,341,572.58
reserves
Reserve fund
Enterprise development
funds
Other
Total 515,895,752.76 0.00 0.00 515,895,752.76
Notes of surplus reserves: for surplus reserves transferred to share capital, compensating losses and distributed as dividends, relevant
resolutions shall be explained:
52. Provision for general risk
Notes of provision for general risk:
53. Retained profits
Unit: RMB Yuan
132
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Withdrawal or
Item Amount
distributed proportion
Opening balance of retained profits
--
before adjustments
Adjustments of opening balance of
retained profits (―+‖ means add, ―-‖ --
means reduce)
Opening balance of retained profits
2,386,185,711.95 --
after adjustments
Add: Net profit attributable to owners
301,503,288.19 --
of the Company
Less: Withdrawal of statutory surplus
reserves
Withdrawal of discretional surplus
reserves
Withdrawal of provision for general
risk
Dividend of common stock payable 282,507,344.00
Dividend of common stock converted
into share capital
Closing retained profits 2,386,185,711.95 --
List of adjustment of opening retained profits:
1) RMB0.00 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for
Business Enterprises and relevant new regulations.
2) RMB0.00 opening retained profits was affected by changes on accounting policies.
3) RMB0.00 opening retained profits was affected by correction of significant accounting errors.
4) RMB0.00 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB0.00 opening retained profits was affected totally by other adjustments.
Notes: as for IPO companies, if the accumulated profits were enjoyed by new and original shareholders according to the resolutions
made at the shareholders’ general meeting before public offering, the Company shall explain clearly; if the accumulated profits were
distributed before public offering and enjoyed by the original shareholders according to the resolutions made at the shareholders’
general meeting, the Company shall clearly disclose the audited profits of dividends payable enjoyed by the original shareholders.
54. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Unit: RMB Yuan
Item Reporting period Same period of last year
Sales of main business 2,724,452,576.74 2,844,570,820.27
Other operating income 83,572,988.02 136,242,276.93
Cost of sales 2,055,106,728.52 1,966,770,465.74
(2)Main business (Classified by industry)
√ Applicable □ Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
133
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Textile and apparel 2,502,951,569.95 1,803,668,572.18 2,699,031,735.24 1,739,737,238.70
Cotton 54,482,474.92 44,457,699.53 65,534,144.93 55,979,266.60
Electricity and gas 94,492,825.45 88,624,820.99 65,719,852.72 66,968,529.92
Other 72,525,706.42 67,142,781.86 14,285,087.38 9,890,526.85
Total 2,724,452,576.74 2,003,893,874.56 2,844,570,820.27 1,872,575,562.07
(3)Main business (Classified by product)
√ Applicable □ Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
Yarn-dyed products 1,865,722,025.87 1,375,834,973.23 2,060,726,860.93 1,320,813,606.52
Skirts 637,229,544.08 427,833,598.95 638,304,874.31 418,923,632.18
Ginned cotton 54,482,474.92 44,457,699.53 65,534,144.93 55,979,266.60
Electricity, gas 94,492,825.45 88,624,820.99 65,719,852.72 66,968,529.92
Other 72,525,706.42 67,142,781.86 14,285,087.38 9,890,526.85
Total 2,724,452,576.74 2,003,893,874.56 2,844,570,820.27 1,872,575,562.07
(4) Main business (Classified by area)
□ Applicable √ Inapplicable
(5) The revenue of sales from the top five customers
Unit: RMB Yuan
Customer Main business revenue Proportion of total business revenue (%)
Li & Fung Limited 336,981,378.47 12%
TAL 207,756,665.15 7.4%
PVH 127,805,120.28 4.55%
OLYMP 120,099,854.53 4.28%
Chen Feng 97,931,400.74 3.49%
Total 890,574,419.17 31.72%
Notes:
55. Revenue from the construction contracts
□ Applicable □ Inapplicable
Notes of revenue from the construction contracts:
56. Business tax and surtax
Unit: RMB Yuan
Same period of last
Item Reporting period Calculation and payment standard
year
Consumption tax
Business tax
Urban maintenance and 7%, 5%, 1% of actual taxed
1,161,154.79 5,884,910.37
construction tax turnover tax
Education surtax 640,488.41 2,635,879.50 3% of actual taxed turnover tax
Resources tax
Local education surtax 395,249.19 1,663,156.42 2% of actual taxed turnover tax
Local water conservancy
164,042.54 1% of actual taxed turnover tax
construction fund
Total 2,360,934.93 10,183,946.29 --
Notes:
57. Gains and losses from changes in fair value
Unit: RMB Yuan
Source Reporting period Same period of last year
Trading financial assets -20,939,380.00 -22,579,700.00
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Including: gains from the changes in fair
-20,939,380.00 -22,579,700.00
value of derivative financial instruments
Trading financial liabilities -10,107,650.00 1,950,713.28
Investment property calculated in fair value
Other
Total -31,047,030.00 -20,628,986.72
Notes:
58. Investment income
(1) List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Long-term equity investment income
0.00 0.00
accounted by cost method
Long-term equity investment income
0.00 0.00
accounted by equity method
Investment income arising from disposal of
-549,000.00
long-term equity investments
Investment income received from holding of
trading financial assets
Investment income received from holding of
held-to-maturity investments
Investment income received from holding of
available-for-sale financial assets
Investment income received from disposal of
19,601,638.49 40,469,067.77
trading financial assets
Investment income received from holding of
held-to-maturity investments
Investment income received from
available-for-sale financial assets
Other
Total 19,052,638.49 40,469,067.77
(2) Long-term equity investment income accounted by cost method
Unit: RMB Yuan
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
Total 0.00 0.00 --
(3) Long-term equity investment income accounted by equity method
Unit: RMB Yuan
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
Total 0.00 0.00 --
Notes of investment income: make notes if there is significant limitation for recovery of investment income. If
there isn’t the said limitation, notes too:
135
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
59. Impairment losses
Unit: RMB Yuan
Item Reporting period Same period of last year
I. Bad debts losses 3,155,937.27 3,002,034.04
II. Inventory falling price losses
III. Impairment losses of available-for-sale
financial assets
IV. Impairment losses of held-to-maturity of
investment
V. Impairment losses of long-term equity
investment
VI. Impairment losses of investment property
VII. Impairment losses of fixed assets 195,306.49
VIII. Impairment losses of engineering materials
IX. Impairment loss of construction in progress
X. Impairment losses of productive biological
assets
XI. Impairment losses of oil and gas assets
XII. Impairment losses of intangible assets
XIII. Impairment losses of goodwill
XIV. Other
Total 3,155,937.27 3,197,340.53
60. Non-operating gains
(1)
Unit: RMB Yuan
Item Reporting period Same period of last year
Total gains from disposal of non-current assets 459,008.99 856,260.04
Including：Gains from disposal of fixed assets 459,008.99 856,260.04
Gains from disposal of intangible assets
Gains from debt reconstruction
Gains from non-monetary assets exchange
Acceptance of donations
Government grants 16,550,426.92 12,444,285.74
Other 3,143,506.16 2,832,101.90
Total 20,152,942.07 16,132,647.68
(2) List of government grants
Unit: RMB Yuan
Same period of last
Item Reporting period Note
year
Circular on Commending
Scientific and Technological
Scientific and technological Progress Award of Y2011 of
60,000.00
progress award People’s Government of Zichuan
District (Chuan-Zheng-Fa [2012]
No.9)
Reward for energy-saving and Circular of People’s Government
10,000.00 of Zichuan District on Rewarding
consumption reduction Advanced Units and Advanced
136
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Enterprises in Energy-saving and
Consumption Reduction in
2011 (Chuan-Zheng-Fa [2012]
No.11)
Notice on Allotting Subsidy
forGovernment Quality Reward
Government Quality Reward
200,000.00 of Shangdong Province by Work
of Shandong Province
Leading Group of ―Quality Help
to Thriving Shandong Province‖
Scientific and technological Award Method on Science and
20,000.00
progress award technology of Shandong Province
Circular of People’s Government
Rewards such as Reward for of Zichuan District on Rewarding
energy-saving and 1,160,000.00 Part of Enterprises and Projects
consumption reduction of 2012 (Chuan-Wei [2012] No.
16)
Notice on Issuing Budget Target
Subsidies for export credit of Subsidy for Export Credit
450,000.00 Premium of 2011 by the State of
premium Zibo Finance Bureau
(Zi-Cai-Qi-Zhi [2011] No.46)
Notice on Issuing Budget Target
Import subsidies 162,500.00 of Import Subsidies of 2011
(Zi-Cai-Qi-Zhi [2011] No.91)
Notice on Issuing Budget Target
of Special Funds for
Special funds for development Development of Enterprises and
of enterprises and colleges as 100,000.00 Colleges as well as Training Base
well as training base of 2011 (Zibo-Finance Bureau
Document Cai-Qi) of Finance
Bureau of Zibo
Notice on Issuing Budget Target
of Subsidy for Overseas Patent
Subsidies for overseas patent
10,000.00 Application of 2011
application
(Chuan-Cai-Jiao-Zhi [2012]
No.2)
Notice on Draft Allocating
Budget Target Financial Award
Financial award funds on Funds on Transform of
transform of energy-saving 2,660,000.00 Energy-saving Technology
technology (Phase II) of 2011
(Zi-Cai-Zheng-Zhi [2011]
No.108)
Notice on Publishing Allotment
Method of Awards for Heating
Measurement and Energy-saving
Subsidies on heat metering Innovation Project of Existing
402,000.00
and energy efficiency Residential Buildings of 2009
(Lu-Jian-Jie-Ke-Zi [2010] No.4)
of Housing and Urban-Rural
Development Bureau
Management Method of Zibo
Municipal reward for
200,000.00 Workstation of Academicians
workstation of academicians
(Trial)
Notice on Forward Notice on
Subsidies on Heat metering
300,000.00 Putting Forward Heating
and energy efficiency
Metering and Energy Efficiency
137
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
of Existing residential heating
system in North China and
Gathering and Submitting
Relevant Materials such as
Energy-saving Goals etc.
(Lu-Cai-Jian [2011] No.14) of
Finance Bureau of Shandong
Province and Housing and
Urban-Rural Development
Bureau
Notice on Allocating Special
Special funds for Independent Funds for Independent Innovation
1,786,000.00
Innovation ([2012] No.6) of Finance Bureau
of Zichuan District
Notice on Allotting More Special
Funds on Supporting Agricultural
Product Process Enterprises and
Receipt of discount interest on Township Enterprises of
100,000.00
loans of township enterprises Autonomous of 2011
(Xin-Nong-Chan-Cai [2011]
No.16) of Xinjiang Uygur
Autonomous Region
Notice on Issuing Financial
Financial subsidies on loans of Subsidy on Loans of Supporting
150,000.00
supporting the poor project the Poor Project of 2011
(A-Di-Cai-Fu [2012] No.2)
Notice on Issuing Special Fund
for the Development of
Special Funds for Agricultural Product Processing
Development of Agricultural 300,000.00 Enterprises by Financial Support
Product Process Enterprises of Autonomous Region of 2012
([2012] No.69) of the Finance
Bureau of Aqsu District
Notice on Printing and
Distributing Management
Subsidies for Xinjiang Cotton
4,233,848.00 Method on Subsidy for Xinjiang
out of Xinjiang
Cotton out of Xinjiang by
Finance Bureau
Notice on Providing Premium
Subsidies For Enterprises
Involved in Export Credit
Subsidies for export credit
41,000.00 130,000.00 Insurance (Zi-Zheng-Ban-Zi
premium
[2009] No.96)of the General
Office of People’s Government of
Zibo Municipality
Circular on Commending
Scientific and Technological
Scientific and technological Progress Award of Y2010 of
18,000.00
progress award People’s Government of Zichuan
District (Chuan-Zheng-Fa [2011]
No.18)
Reward for energy-saving and Circular of People’s Government
10,000.00
consumption reduction of Zichuan District on Rewarding
138
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Advanced Units and Advanced
Enterprises in Zichuan District in
Energy-saving and Consumption
Reduction in 2010
(Chuan-Zheng-Fa [2011] No.21)
Resolution of Zichuan District
Committee of CCP on
Reward for outstanding Commending and Rewarding
scientific and technological 100,000.00 Some Enterprises and Projects of
cooperation projects Y2010 (Chuan-Wei [2011]
No.34) – (Resolution of) Zichuan
District Committee of CCP
Circular of the General Office of
People’s Government of Zibo
Municipality on Announcing the
List of Enterprises Which Win
the Special Fund for Supporting
Reward for innovative and
900,000.00 the Development of Innovative
growth-oriented enterprises
and Growth-oriented Enterprises
of Zibo Municipality of Y2010
(Zi-Zheng-Ban-Zi [2011] No.37)
of the General Office of People’s
Government of Zibo Municipality
The Circular on Printing and
Distributing the Notice on
Subsidies for Transferring Temporary Management Method
for Subsidies for Transferring
Xinjiang Cotton Yarn to 1,162,200.00 3,760,600.00
Xinjiang Cotton Yarn to
Warehouses out of Xinjiang Warehouses Out of Xinjiang
(Cai-Jian [2009] No. 561) of
Ministry of Finance
Circular on Transmitting the 4th
Batch of Plans on Investment
Within the Budget Scope of the
Fund for interest discount of Central Government of Y2009 on
the loan applied to renovation the Project of Renovating and
250,000.00 Transforming Production
and transformation of Equipment of Cotton Processing
production equipment Factories in Aqsu Region of the
Development and Reform
Commission of Aqsu Region
(A-Di-Fa-Gai-Ji [2009]No.629)
Circular on Distributing
Subsidies for Instructors and
Subsidies for instructors and
Enumerators in Population
enumerators in population 15,000.00
Census of the Office of
census
Population Census of Awat
County ([2011] No.5)
Circular on Thoroughly
Subsidies for social insurance 1,074,860.10
Implementing Relevant Work
139
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Ruled in Xin-Dang-Fa [2009]
No.11 Documentof the
Department of Human Resources
and Social Security, the
Department of Finance, the
Department of Health, and the
Department of Education of the
Autonomous Region
(Xin-Ren-She-Fa [2010] No.1)
Notice on Printing and
Distributing Management
Method for Key Economic Parks
in Gaoqing County (Gao-Cai-Fa
[2002] No.28) of People’s
Government of Gaoqing County
Local support fund 2,365,753.00 3,243,674.72 and Supplementary Agreement
Signed between People’s
Government of Gaoqing County,
the Management Committee of
Economic Development District
of Gaoqing County, and the
Company
Fund for environment
600,000.00
protection (air pollution)
Circular on Printing and
Distributing the Action Plan
(2008-2010) for Green Water and
Fund for environment Blue Sky in Zibo Municipality
330,000.00
protection (Zi-Zheng-Fa [2008] No.8) of
People’s Government of Zibo
Municipality in Shandong
Province
Circular of People’s Government
of Zichuan District on Rewarding
Advanced Units and Advanced
Reward for energy-saving and
10,000.00 Enterprises in Zichuan District in
consumption reduction
Energy-saving and Consumption
Reduction in 2010
(Chuan-Zheng-Fa [2011] No.21)
Circular on Submitting the Item
of Fund for Constructing the
Public Service Platform for
Fund for constructing the Foreign Trade
500,000.00
public service platform (Lu-Shang-Wu-Gui-Cai-Han-Zi
[2010] No.51) of the Department
of Commerce of Shandong
Province
Subsidies for export credit
500,000.00 Circular on Printing and
premium
140
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Distributing the Financial
Support Policy for Promoting
Fast and Stable Development of
International Economy and Trade
of Shandong Province of Y2010
(Lu-Cai-Qi [2010] No.26) of the
Finance Bureau and the
Department of Commerce of
Shandong Province
Resolution on Science and
Technology Reward of Zibo
Reward for science and Municipality of Y2010
100,000.00
technology of Zibo Municipal (Zi-Zheng-Fa [2011] No.14) of
People’s Government of Zibo
Municipality
Implementation Opinion on
Underemployed University
Graduates form Zibo
Municipality Engaging in
Employment and Apprentice
Apprentice subsidies 27,000.00 (Zi-Ren-Fa [2008] No.87)of
Human Resource Bureau of Zibo
Municipality / Finance Bureau of
Zibo Municipality / Labor and
Social Security Bureau of Zibo
Municipality
Circular on Transmitting
Development Plans (the 1st
Batch) on Science and
Technology of Shandong
Subsidies for development on
200,000.00 Province of Y2009 (Lu-Ke-Ji-Zi
science and technology
[2009] No.94) of the Department
of Science and Technology and
the Finance Bureau of Shandong
Province
Notice on Signing and
Distributing Management
Method for Special Funds for
Subsidies for patents of
Patent Development of Shandong
Intellectual Property Office of 8,000.00
Province (Lu-Cai-Jiao [2009]
Shandong
No.36)of Shandong Province
Finance Bureau and Intellectual
Property Office of Shandong
Amortization of deferred
677,125.92 667,150.92 Amortization of deferred income
income
Total 16,550,426.92 12,444,285.74 --
Note:
141
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
61. Non-operating expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
Loss on disposal of non-current assets 626,520.62 8,210,095.87
Including: Loss on disposal of fixed assets 626,520.62 8,210,095.87
Loss on disposal of intangible assets
Loss on debt reconstruction
Loss on exchange of non-monetary assets
External donation
Penalty expense 10,771.24 18,108.41
Compensation expense 353,029.87 232,679.03
External donation expense 1,152,386.12 2,741,771.83
Other 100.71 67,495.33
Total 2,142,808.56 11,270,150.47
Notes:
62. Income tax expense
Unit: RMB Yuan
Item Reporting period Same period of last year
Current income tax expense accounted by tax and
49,041,744.23 114,651,076.55
relevant regulations
Adjustment of income tax 724,474.56 -11,872,133.81
Total 49,766,218.79 102,778,942.74
63. Calculation procedure of basic earnings per share and diluted earnings per share
(1) List of earnings per share and diluted earnings per share in each period
Profit in reporting Reporting period Same period of last year
period
Basic EPS Deluted EPS Basic EPS Deluted EPS
Net profit attributable 0.30 0.30 0.49 0.49
to common
shareholders of the
Company
Net profit attributable 0.30 0.30 0.48 0.48
to common
shareholders of the
Company after
deduction of
non-recurring profit
and loss
(2) Calculation procedure of basic EPS and deluted EPS
During the reporting period, there were no diluted potential common shares in the Company so that EPS-diluted
equaled to EPS-basic.
1. When calculated the EPS-basic, the net profits attributable to common shareholders were as follows:
Items Reporting period Same period of last year
301,503,288.19 491,647,065.96
Net profit attributable to common shareholders of
the Company
301,503,288.19 491,647,065.96
Of which：Net profit attributable to continual
142
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
operating
Net profit attributable to discontinued
operating
Net profit attributable to common shareholders of 302,733,028.86 476,456,565.30
the Company after deducting non-recurring gains
and losses
302,733,028.86 476,456,565.30
Of which ： Net profit attributable to continual
operating
Net profit attributable to terminated
operating
②When calculated the EPS-basic, the denominator refers to the weighted average amount of outstanding issued
common shares, and the accounting process as follows:
Item Reporting period Same period of last year
Amount of outstanding issued common shares at 1,008,954,800.00 994,864,800.00
period-begin
Add：weighted average amount of common shares
issued at current period
Deduct：weighted average amount of common
shares repurchased at current period
Weighted average amount of outstanding issued 1,008,954,800.00 994,864,800.00
common shares at period-end
64. Other comprehensive income
Unit: RMB Yuan
Item Reporting period Same period of last year
1. Profits/(losses) from available-for-sale financial
assets
Less: Effects on income tax generating from
available-for-sale financial assets
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
Subtotal
2. Interests in the investee entities’ other
comprehensive income as per equity method
Less: Effects on income tax generating from the
interests in the investee entities’ other comprehensive
income as per equity method
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
Subtotal 0.00 0.00
3. Profits/(losses) from cash flow hedging instrument
143
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Less: Effects on income tax generating from cash flow
hedging instrument
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
The adjustment value that is the converted initial
recognition amount of arbitrage project
Subtotal 0.00 0.00
4. Converted amount of foreign currency financial
207,989.91 -715,557.69
statements
Less: Net value of disposal of oversea operations that
recognized into current profit and loss
Subtotal 207,989.91 -715,557.69
5. Other 1,570,000.00
Less: Effects on income tax generating from the
others that included into other comprehensive income
Net amount transferred into profit and loss in the
current period that recognized into other
comprehensive income in prior period
Subtotal 0.00 1,570,000.00
Total 207,989.91 854,442.31
Notes:
65. Notes of Cash Flow Statement
(1)Other cash received relevant to operating activities
Unit: RMB Yuan
Item Amount
Government subsidy 15,873,301.00
Collection for employees 1,171,102.88
Claim income 2,149,066.42
Penalty income 28,405.12
Recovery of employee borrowings, petty cash and deposit 1,410,006.90
Other 7,587,366.22
Total 28,219,248.54
Notes:
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
Item Amount
Transportation fees 24,706,271.13
Rent for sales counters and administration expense 6,950,911.19
Rent 6,315,658.63
Advertising fees 3,826,450.36
Business travel fee 5,042,310.80
Insurance expense 4,728,098.96
Bank charges 1,330,568.61
Inspection charges 2,745,342.80
Copyright royalty 2,939,833.35
Audit, consultancy and public notice expenses 1,876,271.96
Decoration and maintenance expense 2,939,833.35
Water and electricity expense 1,889,985.87
144
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
External donations 1,000,000.00
Advance for agricultural materials 20,730,247.50
Other 49,439,638.95
Total 136,461,423.46
Notes:
(3) Other cash received relevant to investment activities
Unit: RMB Yuan
Item Amount
Interest income 2,769,714.80
Trading financial assets (liabilities) investment income 19,601,638.49
Total 22,371,353.29
Notes:
(4) Other cash paid relevant to investment activities
Unit: RMB Yuan
Item Amount
Total 0.00
Notes
(5) Other cash received relevant to financing activities
Unit: RMB Yuan
Item Amount
Borrowed related parties accounts 3,000,000.00
Total 3,000,000.00
Notes of other cash received relevant to financing activities:
(6) Other cash paid relevant to financing activities
Unit: RMB Yuan
Item Amount
Settlement account to minority shareholders paid by subsidiaries
Accounts paid back to related parties 2,300,000.00
Total 2,300,000.00
Notes
66. Supplemental information for Cash Flow Statement
(1) . Supplemental information for Cash Flow Statement
Unit: RMB Yuan
Supplemental information Reporting period Same period of last year
1. Reconciliation of net profit to net cash flows
-- --
generated from operations：
Net profit 308,349,593.63 525,143,315.61
Add: Provision for assets impairments 3,155,937.27 3,197,340.53
Depreciation of fixed assets, oil-gas assets and
197,372,381.53 185,587,029.70
productive biological assets
Amortization of intangible assets 5,260,142.03 4,916,845.02
Amortization of long-term deferred expense
Losses/gains on disposal of property, intangible
-296,249.12 6,539,060.77
asset and other long-term assets (gains: negative)
Losses/gains on scrapped of fixed assets (gains:
463,760.75 814,775.06
negative)
Losses/gains from variation of fair value (gains: 31,047,030.00 20,628,986.72
145
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
negative)
Financial cost (income: negative) 29,576,388.66 24,992,416.97
Investment loss (gains: negative) -19,052,638.49 -40,469,067.77
Decrease in deferred tax assets (increase:
3,865,381.56 -8,237,648.81
negative)
Increase in deferred tax liabilities (decrease:
-3,129,129.57 -3,684,997.05
negative)
Decrease in inventory (increase: negative) -13,030,658.03 -499,402,365.85
Decrease in accounts receivable from operating
110,529,861.85 126,172,267.05
activities (increase: negative)
Increase in accounts payable from operating
-237,072,334.61 82,371,292.95
activities (decrease: negative)
Others
Net cash flows generated from operating activities 417,039,467.46 428,569,250.90
2. Significant investing and financing activities
-- --
without involvement of cash receipts and payments
Debt converted into capital
Convertible company bonds due within 1 year
Financing leased fixed assets
3. Change of cash and cash equivalent: -- --
Closing balance of Cash 439,679,107.11 602,875,935.34
Less: opening balance of cash 811,148,146.93 522,955,236.37
Plus: closing balance of cash equivalent
Less: opening balance of cash equivalents
The net increase in cash and cash equivalents -371,469,039.82 79,920,698.97
(2) Relevant information of acquisition or disposal of subsidiaries and other operation entities in the reporting
period
Unit: RMB Yuan
Supplemental information Reporting period Same period of last year
I. Relevant information on acquisition of
-- --
subsidiaries and other operation entities:
1. Price of acquisition of subsidiaries and other
operation entities
2. Cash and cash equivalents paid for acquisition
of subsidiaries and other operation entities
Less: Cash and cash equivalents held by
subsidiaries and other operation entities
3. Net cash acquired from subsidiaries and other
operation entities
4. Net assets acquired from subsidiaries 0.00 0.00
Current assets
Non-current assets
Current liabilities
Non-current liabilities
146
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
II. Relevant information on disposal of subsidiaries
-- --
and other operation entities
1. Price of disposal of subsidiaries and other
951,000.00
operation entities
2. Cash and cash equivalents received for disposal
951,000.00
of subsidiaries and other operation entities
Less: Cash and cash equivalents held by
subsidiaries and other operation entities
3. Net cash received from disposal of subsidiaries
951,000.00
and other operation entities
4. Net assets on disposal of subsidiaries 0.00 0.00
Current assets
Non-current assets
Current liabilities
Non-current liabilities
(3) Composition of cash and cash equivalents
Unit: RMB Yuan
Item Closing balance Opening balance
I. Cash 439,679,107.11 811,148,146.93
Including: Cash on hand 679,890.17 1,187,641.58
Bank deposit on demand 410,711,633.46 804,149,797.35
Other monetary funds on demand 28,287,583.48 5,810,708.00
Central Bank deposit on demand
Due from banks
Call loan to banks
II. Cash equivalents
Including: bond investments due in three months
III. Closing balance of cash and cash equivalents 439,679,107.11 811,148,146.93
Notes
67. Notes to statement of changes in owners’ equity
Notes on the items under ―Other‖ for adjusting the opening balance and the relevant adjusted amounts as well as retrospective
adjustment arising from business combination under the same control, etc.:
(VIII) Accounting treatment of assets securitization business
1. Notes of main trade arrangement and its accounting treatment of assets securitization business as well as
articles of bankruptcy remote
2. Main information about the special purpose entities in which the Company has no control right but bears
relevant risks:
Unit: RMB Yuan
Revenue of
Net profit in
Total closing Total closing Net closing sales in the
Name the reporting Note
assets liabilities assets reporting
period
period
147
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(IX) Related Parties and Related-party Transactions
1. Information of the parent company of the Company
Unit: RMB Yuan
The
The parent The parent ultimate
Legal
Parent Relationsh Business Registered Business Registered company's company's controllin Organizati
Represent Currency
company ip Type place nature Capital shareholdi voting g party of on Code
ative
ng (%) right (%) the
Company
DongsouH
Zibo
uanghe
Lucheng Industrial
Actual Private Road, Liu 63,260,00 Liu 16420039-
Textile investmen 12.22% 12.22%
controller enterprise Gaoqing Shizhen 0.00 Shizhen 1
Investmen t
County,
t Co., Ltd
Zibo
Notes:
Zibo Lucheng Textile Investment Co., Ltd is the first principal shareholder as well as the actual controller of the Company.
Legal representative: Liu Shizhen
Registered capital: RMB 63.26 million
Business scope: Zibo Lucheng Textile Investment Co., Ltd. (hereinafter referred to as Lucheng Investment) was engaged in
investment textile, electric power and pharmacy; knitwear and the relevant import and export business; retail of lubricating oil, gas
oil and diesel oil; Chinese meal and wholesale and retail of general merchandise and etc. Registered capital: RMB 63.26 million
Business scope: Zibo Lucheng Textile Investment Co., Ltd. (hereinafter referred to as Lucheng Investment) was engaged in
investment textile, electric power and pharmacy; knitwear and the relevant import and export business; retail of lubricating oil, gas
oil and diesel oil; Chinese meal and wholesale and retail of general merchandise and etc.
As at the end of the reporting period, Lucheng Investment held 123,3147 million shares of the Company, taking up 12.22% of total
share capital of the Company.
2. Information of subsidiaries of the Company
Unit: RMB Yuan
Percentage
Legal Percentage
Business Registered Business Registered of Organizati
Full name Type representat Currency of voting
type place nature capital Shareholdi on code
ive right (%)
ng (%)
Beijing
Innovative
Garment
Co., Ltd. Wholesale
Controlled Private Liu 42,000,000 71774843-
(hereinafte Beijing and retail CNY 60% 60%
subsidiary enterprise Shizhen .00 8
r refer to industry
as ―Beijing
Innovative
‖)
Luthai
Controlled Private Import and
Hong Liu 6,000,000.
(Hong export HKD 100% 100%
subsidiary enterprise Kong Shizhen
trade
00
Kong)
Xinjiang
Luthai Controlled Private Liu Production 146,534,21 75165238-
Xinjiang CNY 58.24% 58.24%
Harvest subsidiary enterprise Shizhen and sale 7.01 4
Cotton
148
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Co., Ltd.
(hereinafte
r refer to
as
―Xinjiang
Luthai‖)
Lufeng
Weaving
& Dyeing
Co., Ltd.
(hereinafte Controlled Private Liu Production 706,160,00 76001835-
Zibo CNY 75% 75%
r refer to subsidiary enterprise Shizhen and sale 0.00 0
as ―Lufeng
Weaving
&
Dyeing‖)
Zibo
Luqun
Textile
Co., Ltd. Controlled Private Liu Production 168,220,00 76870633-
Zibo CNY 100% 100%
(hereinafte subsidiary enterprise Shizhen and sale 0.00 4
r refer to
as ―Luqun
Textile‖)
Zibo
Xinsheng
Power Co.,
Ltd.
Controlled Private Liu Production 162,435,60 61329023-
(hereinafte Zibo CNY 100% 100%
subsidiary enterprise Shizhen and sale 0.00 1
r refer to
as
―Xinsheng
Power‖)
Beijing
Wholesale
Lufeng Controlled Private Liu 15,000,000 55488176-
Sunshine Beijing and retail CNY 100% 100%
Garments subsidiary enterprise Shizhen .00 X
industry
Co., Ltd.
Shanghai
Luthai
Textile
Co., Ltd. Wholesale
Controlled Private Liu 5,000,000. 56659750-
(hereinafte Shanghai and retail CNY 100% 100%
subsidiary enterprise Shizhen 00 4
r refer to industry
as
―Shanghai
Lutai‖)
149
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
3. Information of joint ventures and associated enterprises
Unit: RMB Yuan
Total sales
Percentage Net profit
Legal Percentage Total Total Total of revenue
Name of Business Registered Business Registered of in the Relationshi Organizatio
representati Currency of voting closing closing closing net in the
investee type address nature capital shareholdin reporting p n code
ve rights (%) assets liabilities assets reporting
g (%) period
period
I. Joint
-- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ventures
II.
Associated -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
enterprises
150
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
4. Information of other related parties of the Company
Name of other related party Relationship Organization code
Zibo Stanluian Cosmetics Co., Ltd. Affiliated person (same chairman as
61329036-2
(hereinafter called ―Stanluian‖) the Company)
Zibo Taimei Ties Co., Ltd. Controlled subsidiary of the parent
61329035-4
(hereinafter called Taimei Ties) company
Zibo Limin Purified Water Co.,
Wholly-owned subsidiary of the
Ltd. (hereinafter called Limin 76575998-3
parent company
Purified Water)
Zibo Luqun Land Co., Ltd Wholly-owned subsidiary of the
77630667-2
(hereinafter called Luqun Land) parent company
Dongtai International Development
Wholly-owned subsidiary of the
CO., Ltd. (hereafter called Dongtai
parent company
International)
Controlled subsidiary of the parent
Chengshun Heating 69544896X
company
Notes:
5. Related-party transactions
(1) Purchase of goods and acceptance of service
Unit: RMB Yuan
Pricing method Reporting period Same period of last year
and
Content of the
Related party decision-making Proporti Proporti
transaction Amount Amount
procedures for on (%) on (%)
the transaction
Lucheng Textile Fine staple cotton Market price 1,596,593.14 0.33%
T-shirt, towel, sock,
Lucheng Textile Market price 2,470,111.77 100% 2,746,597.01 100%
oil product
Gift box for
Stanluian cosmetic, lotion,
Market price 75,159.42 100% 61,180.54 100%
Company washing-up liquid,
Liquid soap, etc.
Taimei Ties Purchase of ties Market price 183,858.97 100% 135,292.31 100%
Processing charges
Lucheng Textile for the leg of a Market price 228,021.26 0.17% 144,998.03 0.11%
stocking
Processing charges
Taimei Ties for commodities and Market price 577,601.73 0.42% 462,288.46 0.34%
quilt cover
Limin Purified
Sewage disposal Market price 3,302,232.84 100% 2,561,816.00 100%
Water
Loan interest
Lucheng Textile Pay for interests rates in the same 653,310.79 1.95% 1,564,130.58 4.59%
period
151
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Loan interest
Taimei Ties Pay for interests rates in the same 82,836.05 0.25%
period
Loan interest
Stanluian
Pay for interests rates in the same 68,456.96 0.2%
Company
period
Sales of goods and rendering of service
Unit: RMB Yuan
Pricing method Reporting period Same period of last year
and
Content of the
Related party decision-making Proporti Proporti
transaction Amount Amount
procedures for on (%) on (%)
the transaction
Materials,
Lucheng Textile electricity, running Market price 148,541.60 1.57% 142,459.53 1.39%
water and steam
Dyed yarn, facing
Lucheng Textile material and Market price 319,686.50 0.01% 148,417.36 0%
garments
Electricity, heating
Taimei Ties charges, garment Market price 9,259.95 0.11% 7,824.91 0.07%
etc.
Materials,
Stanluian electricity, running
Market price 20,083.86 0.21% 4,715.30 0.05%
Company water and heating
charges
Limin Purified Materials and
Market price 84,516.53 0.01% 10,831.88 0%
Water garment
Heating power,
Chenshun Power materials and Market price 3,210,811.85 3.4% 10,119.66 0%
garment
(2)Information of related party trust/contract
Information of entrusted management/contract
Unit: RMB Yuan
Trust /
Information Amount of Pricing contract
Name of Type of the Initial date Ending date
Name of of the basis for the income Trust/contra
entrusting entrusted/co of being of being
trustee entrusted/co entrusted/co trust / recognized ct income
party/contra ntracted entrusted/co entrusted/co
/contractor ntracted ntracted contract in the effect
ctee assets ntract ntract
assets assets income reporting
period
Information of entrusting management/contracted
Unit: RMB Yuan
Name of Name of Information Amount of Type of the Initial date Ending date Pricing Trust / Entrusting /
entrusting trustee of the entrusted/co of of basis for the contract fee contracted
party/contra /contractor entrusted/co entrusted/co ntracted entrusting/ entrusting/ trust / recognized income
152
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
ctee ntracted ntracted assets being being contract fee in the effect
assets assets contracted contracted reporting
period
Notes
(3) Information of related-party lease
Rental situation of the Company
Unit: RMB Yuan
Rental
Rental
Category Informatio Pricing income
Amount of income
Name of Name of of the n of the Ending basis for recognized
the leased Initial date effect on
lessor lessee leased leased date the rental in the
assets the
assets assets income reporting
Company
period
Luthai Lucheng House and Normal 31 Dec. Market
1 Jul. 2008 76,818.00 76,818.00
Textile Textile building lease 2013 price
Xinsheng Chenshun House and Normal 1 Jan. 31 Dec. Market
7,700.00 7,700.00
Power Power building lease 2011 2012 price
Lease situation of the Company
Unit: RMB Yuan
Lease
Rental
Category Informatio Pricing charges
Amount of income
Name of Name of of the n of the Ending basis for recognized
the leased Initial date effect on
lessor lessee leased leased date the lease in the
assets the
assets assets charges reporting
Company
period
Lucheng Luthai Rent of Normal 31 Dec. Market 1,897,578. 1,897,578.
1 Jan. 2010
Textile Textile land lease 2012 price 00 00
Lucheng Luthai Rent of gas Normal 1 Aug. 31 Dec. Market
241,278.00 241,278.00
Textile Textile station lease 2008 2013 price
Rent of
Lucheng Luthai Normal 31 Dec. Market
land and 1 Jan. 2008 201,720.00 201,720.00
Textile Textile lease 2013 price
buildings
Rent of
Luqun Luthai Normal 31 Dec. Market
land and 1 Jan. 2011 901,272.00 901,272.00
Land Textile lease 2012 price
buildings
Lufeng
Lucheng Rent of Normal 31 Dec. Market
Weaving & 1 Jan. 2010 348,323.22 348,323.22
Textile houses lease 2012 price
Dyeing
Lucheng Luqun Rent of Normal 31 Dec. Market 1,758,865. 1,758,865.
1 Jan. 2010
Textile Textile equipments lease 2012 price 20 20
Notes of related-party lease
(4) Information of related-party guarantee
Unit: RMB Yuan
Whether the
Guarantee guarantee was
Guarantor Secured party Initial date Due date
amount accomplished or
not
Notes:
153
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(5) Related-party call loan
Unit: RMB Yuan
Related party Amount of call loan Initial date Due date Note
Loan from banks and other financial institutions
Accounts borrowed
Lucheng Textile 20,900,000.00 4 Jul. 2011 31 Dec. 2012
by Luqun Textile
Accounts borrowed
Taimei Ties 2,650,000.00 5 Jan. 2011 31 Dec. 2012
by Luqun Textile
Accounts borrowed
Stanluian Company 2,190,000.00 5 Jan. 2011 31 Dec. 2012
by Luqun Textile
Accounts borrowed
by Luqun Textile, and
Chenshun Power 3,000,000.00 7 Jan. 2012 31 Dec. 2012
already paid back 2.3
million
Lending to banks and other financial institutions
(6) Information about assets transfer, debt reorganization of related parties
Unit: RMB Yuan
Pricing Reporting period Same period of last year
Type of method and
related decision-maki
Content of the
Related party party ng procedures Proporti Proporti
transaction Amount Amount
transactio for the on (%) on (%)
n related-party
transaction
Equity transfer
Limin Purified Transfer Auditing net
of Limin 951,000.00 100%
Water of assets value
Walling
Transfer of
Lucheng Transfer
equipments of Fair value 4,718,535.99 1.88%
Textile of assets
Lucheng Textile
Limin Purified Transfer Transfer of
Fair value 133,142.88 0.05%
Water of assets equipments
(7) Other related-party transaction
6. Amounts due from/to related parties
Amount due from related parties
Unit: RMB Yuan
Name Related party Closing balance Opening balance
Amount due to related parties
Unit: RMB Yuan
Name Related party Closing balance Opening balance
Other accounts payable Lucheng Textile 20,900,000.00 20,900,000.00
Other accounts payable Taimei Ties 2,650,000.00 2,650,000.00
Other accounts payable Stanluian Company 2,190,000.00 2,190,000.00
Other accounts payable Chenshun Power 700,000.00
(X) Share-based Payment
1. Overview of share-based payment
Total of each equity instrument granted
0.00
by the Company in the reporting period
Total of each equity instrument excised 0.00
154
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
by the Company in the reporting period
Total of each equity instrument expired
0.00
in the reporting period
Scope of excising price and remaining
contract term of stock options that 5.025 yuan/share, 38 months
externally issued as at the period-end
Scope of excising price and remaining
contract term of other equity instruments 0
as at the period-end
Notes
2. Information of equity-settled share-based payment
Unit: RMB Yuan
Recognition method on fair value of equity instruments at The closing price of A-share on the day before the grant
the grant date day
Whether employee service conditions and non-market
Recognition method on the best estimate of the number of
conditions in incentive plan of the Company meet with the
vesting equity instruments
best estimate
Reason for significant differences of estimate between the
reporting period and the same period of last year
Accumulated amount of equity-settled share-based
52,241,610.40
payment in capital reserves
Total expense recognized for the equity-settle share-based
52,241,610.40
payment
Notes
3. Information of cash-settled share-based payment
Unit: RMB Yuan
Recognition method of fair value of liabilities that are
born by the Company and calculated basing on stocks or
other equity instruments
Accumulated amount of liabilities that arising from
cash-settled share-based payment
Total expense recognized for the cash-settle share-based
payment
Notes:
4. Information of share-based payment service
Unit: RMB Yuan
Total employee service exchanged by share-based
payment
Total other service exchanged by share-based payment
5. Modification, termination of share-based payment
(XI) Contingency
1. Contingent liabilities and its financial effect arising from unsettled litigation or arbitration
2. Contingent liabilities and its financial effect arising from loan guarantee offered to other
companies
155
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Other contingent liabilities and its financial effect:
As to 30 Jun. 2012, information about physical assets pledged by controlled subsidiaries for the
purpose of acquiring bank loans
Company Pledged asset Asset value Acquired loan Term of borrowing
Xinjiang Luthai Inventory 74,143,836.43 50,000,000.00 2011.12.1-2012.7.27
Xinjiang Luthai Inventory 44,486,301.85 30,000,000.00 2012.3.27-2012.12.26
Xinjiang Luthai Inventory 74,143,836.43 50,000,000.00 2012.5.29-2012.12.27
Xinjiang Luthai Fixed assets 36,809,409.52 32,000,000.00 2012.6.25-2013.5.20
Xinjiang Luthai Land-use right 87,488.89
Xinjiang Luthai Land-use right 9,052,157.36 45,000,000.00 2011.8.30-2012.8.29
Total 238,723,030.48 207,000,000.00
(XII) Commitments
1. Significant commitments
Item Closing balance Opening balance
Commitments signed but hasn’t been
recognized in financial statements
- Commitment for constructing and 10,456 23,864
purchasing long-term assets
Total 10,456 23,864
2. Fulfillment of prior commitments
Contracted amount Fulfillment of prior
Item
(RMB Ten thousand) commitments
Commitment for constructing and purchasing 23,864 Fulfilled
long-term assets
(XIII)Events after the Balance Sheet Date
1. Notes of significant events after the Balance Sheet Date
Unit: RMB Yuan
Influence number on Reason for failing to
Item Details financial status and estimate the influence
operating results number
2. Notes of profit distribution after Balance Sheet Date
Unit: RMB Yuan
Drafted distributed profit or dividends
Profit or dividends claimed to distribute after review
and approval
3. Notes of other events after Balance Sheet Date
(XIV)Notes of other significant events
1. Exchange of non-monetary assets
2. Debt reorganization
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
3. Business combination
4. Lease
5. Closing financial instruments that externally issued and convertible into shares
6. Main content and significant changes of annuity plan
7. Other significant events
(XV) Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Provision for bad debts Balance Provision for bad debts
Category Prop
Proport Proport Proport
Amount ortio Amount Amount Amount
ion (%) ion (%) ion (%)
n (%)
Accounts receivable
with significant single
amount and 0.00 0.00 0.00 0.00
individually withdrawn
bad debt provision
Accounts receivable for which bad debt provisions are made on the group basis
247,479,416. 303,982,000.
Subtotal of groups 100% 16,969,061.25 6.66% 100% 17,385,371.27 5.72%
08 68
Accounts receivable
with insignificant
single amount but
0.00 0.00 0.00 0.00
individually
withdrawn bad debt
provision
247,479,416. 303,982,000.
Total -- 16,969,061.25 -- -- 17,385,371.27 --
08 68
Notes to category of accounts receivable:
Accounts receivable with significant single amount and individually withdrawn bad debt provision at period-end
□ Applicable √ Inapplicable
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Book balance
Aging Propor Bad debt Propor Bad debt
Amount tion provision Amount tion provision
(%) (%)
Within 1 year
Including: -- -- -- -- -- --
157
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Subtotal for
those aging 87.09
215,529,540.60 10,776,477.03 279,974,702.67 92.1% 13,998,735.13
within 1 %
year
1-2 years 9,526,423.86 3.85% 952,642.39 14,148,234.65 4.66% 1,414,823.47
2-3 years 14,870,936.58 6.01% 2,974,187.32 9,859,063.36 3.24% 1,971,812.67
Over 3
7,552,515.04 3.05% 2,265,754.51
years
3-4 years
4-5 years
Over 5
years
Total 247,479,416.08 -- 16,969,061.25 303,982,000.68 -- 17,385,371.27
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Inapplicable
Accounts receivable with insignificant single amount but individually withdrawn bad debt provision at period-end:
□ Applicable √ Inapplicable
(2) Information of accounts receivable reversed or recovered in the reporting period
Unit: RMB Yuan
Withdrawal amount
Basis on recognition
Content of accounts Reason for reversal of bad debt provision Reversed or
of provision for bad
receivable or recovery before the reversal or recovered amount
debts
recovery
Total -- -- --
The withdrawal of bad debt provision of accounts receivable with significant single amount or
insignificant single amount but individually made impairment test at the end of report period:
Content of accounts Withdrawal
Book balance Amount of bad debts Reason
receivable proportion (%)
Total -- --
Notes to accounts receivable with insignificant single amount but large risks of groups after
grouping by credit risks characteristics:
(3) Information of accounts receivable that written off in the report period
Unit: RMB Yuan
Whether arising
Name of
Nature Date Amount Reason from related-party
company
transaction or not
Total -- -- -- --
Notes:
(4) Information of shareholders with more than 5% (including 5%) of the voting shares of
the Company in accounts receivable in report period
□ Applicable √ Inapplicable
(5) Nature or content of other accounts receivable with significant amount
158
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
(6) Top five accounts receivable
Unit: RMB Yuan
Name of company Relationship Amount Term Proportion (%)
Li & Fung Limited Non-related customer 53,436,732.61 Within 1 year 21.59%
Within 1 year, 1 to 3
Beijing Innovative Controlled subsidiary 53,027,739.27 21.43%
years, over 3 years
TAL Non-related customer 28,231,602.41 Within 1 year 11.41%
Lufeng Weaving &
Controlled subsidiary 27,952,819.15 Within 1 year 11.29%
Dyeing
Chenfeng (Jintan)
Non-related customer 6,822,022.16 Within 1 year 2.76%
Garments Co., Ltd.
Total -- 169,470,915.60 -- 68.48%
(7) Accounts receivable due from related parties
Unit: RMB Yuan
Name of company Relationship Amount Proportion (%)
Beijing innovative Controlled subsidiary 53,027,739.27 21.43%
Lufeng Weaving &
Controlled subsidiary 27,952,819.15 11.3%
Dyeing
Lufeng Sunshine Controlled subsidiary 2,886,721.30 1.17%
Luthai (Hong Kong) Controlled subsidiary 2,119,532.73 0.85%
Total -- 85,986,812.45 34.75%
(8)
RMB0.00 was transferred from the accounts receivable not meeting the conditions of termination recognition.
(9) If securitization is carried out on accounts receivale as teh underlying asset, please brief
on the arrangement of relevant transactions
2. Other accounts receivable
(1) Other accounts receivable
Unit: RMB Yuan
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Category
Prop Prop Prop Prop
Amount ortio Amount ortio Amount ortio Amount ortio
n (%) n (%) n (%) n (%)
Other accounts receivable
with significant single
amount and individually 0.00 0.00 0.00 0.00
withdrawn bad debt
provision
Other accounts receivable for which bad debt provisions are made on the group basis
7.02
Subtotal of the groups 71,010,836.53 100% 4,982,801.99 39,121,958.69 100% 2,739,458.00 7%
%
Other accounts receivable
with insignificant single
amount but individually 0.00 0.00 0.00 0.00
withdrawn bad debt
provision
Total 71,010,836.53 -- 4,982,801.99 -- 39,121,958.69 -- 2,739,458.00 --
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Notes of category:
Other accounts receivable with significant single amount and individually withdrawn bad debt provision at
period-end:
□Applicable √ Inapplicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Book balance
Aging Propor Bad debt Propor
Bad debt provision
Amount tion provision Amount tion
(%) (%)
Within 1 year
Including: -- -- -- -- -- --
Subtotal for
79.27 86.61
those aging 56,288,230.06 2,814,411.50 33,882,414.23 1,694,120.71
% %
within 1 year
14.32
1-2 years 10,170,154.58 1,017,015.46 2,289,795.87 5.85% 228,979.59
%
2-3 years 2,143,605.38 3.02% 428,721.08 685,668.80 1.75% 137,133.76
Over 3 years 2,408,846.51 3.39% 722,653.95 2,264,079.79 5.79% 679,223.94
3-4 years
4-5 years
Over 5 years
Total 71,010,836.53 -- 4,982,801.99 39,121,958.69 -- 2,739,458.00
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□Applicable √Inapplicable
Other accounts receivable with insignificant single amount but individually withdrawn bad debt provision at
period-end:
□ Applicable √ Inapplicable
(2) Information of other accounts receivable reversed or recovered in the reporting period
Unit: RMB Yuan
Withdrawal amount
Basis on recognition
Content of other Reason for reversal of bad debt provision Reversed or
of provision for bad
accounts receivable or recovery before the reversal or recovered amount
debts
recovery
Total -- -- --
The withdrawal of bad debt provision of other accounts receivable with significant single amount or insignificant
single amount but individually made impairment test at the end of report period:
Content of other Withdrawal
Book balance Amount of bad debts Reason
accounts receivable proportion (%)
Total -- --
Notes to other accounts receivable with insignificant single amount but large risks of groups after grouping by
160
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
credit risks characteristics:
(3) Information of the write-off other accounts receivable
Unit: RMB Yuan
Whether arising
Name of Date of written
Nature Amount Reason from related-party
company off
transactions
Total -- -- -- --
Notes:
(4) The other accounts receivable due from shareholders with more than 5% (including 5%)
of the voting shares of the Company in the reporting period
□ Applicable √ Inapplicable
(5)Nature or content of other accounts receivable with significant amount
(6) Top five other accounts receivable
Unit: RMB Yuan
Name of company Relationship Amount Term Proportion (%)
Export rebates
Non-related party 37,666,689.72 Within 1year 53.04%
receivable
Wholly-owned Within 1 year, 1 to 2
Shanghai Luthai 13,577,039.80 19.12%
subsidiary years
Deposits for wages
paid to migrant Within 1 year, 2 to 3
Non-related party 1,458,593.50 2.05%
workers in Zichuan years, over 3 years
District, Zibo
Zibo customs Non-related party 1,347,071.19 Within 1year 1.9%
Payment for Staff Within 1 year, 2 to 3
Non-related party 545,183.78 0.77%
dormitories years
Total -- 54,594,577.99 -- 76.88%
(7) Other account receivable due from related parties
Unit: RMB Yuan
Name of company Relationship Amount Proportion (%)
Shanghai Luthai Wholly-owned subsidiary 13,577,039.80 19.12%
Total -- 13,577,039.80 19.12%
(8)
RMB000 was transferred from the other accounts receivable not meeting the conditions of termination recognition.
(9) If securitization is carried out on the other accounts receivable as the underlying asset,
please brief on the arrangement of relevant transactions.
3. Long-term equity investments
Unit: RMB Yuan
Explanatio Withdr
ns on Provi awal Cash
Share
Incre Voting differences sion amount bonus
Accou Initial holdi
The Opening ase/ Closing right between for of in the
nting investment ng
investee balance decre balance Proportio shareholdi impai impair reporti
method cost Propo
ase n ng rment ment ng
rtion
proportion loss provisi period
and voting on in
161
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
right the
proportion reporti
ng
period
Beijing Cost 25,200,000. 25,200,000.
25,200,000.00 60% 60%
Sichuang method 00 00
Xinjiang Cost 82,400,701. 82,400,701. 58.24
82,400,701.97 58.24%
Luthai method 97 97 %
Xinsheng Cost 176,340,737.9 176,340,737 176,340,737
100% 100%
Power method 3 .93 .93
Lufeng
Cost 529,620,000.0 529,620,000 529,620,000
Weaving 75% 75%
method 0 .00 .00
& Dyeing
Luqun Cost 171,784,550.0 171,784,550 171,784,550
100% 100%
Textile method 0 .00 .00
Luthai
Cost 6,366,600.0 6,366,600.0
(Hong 6,366,600.00 100% 100%
method 0 0
Kong)
Lufeng Cost 5,000
10,000,000. 15,000,000.
15,000,000.00 ,000. 100% 100%
Sunshine method 00 00
00
Shanghai Cost 5,000,000.0 5,000,000.0
5,000,000.00 100% 100%
Luthai method 0 0
Rongchan
Cost 55,282,600. 55,282,600. 5.555
g 55,282,600.00 5.555%
method 00 00 %
Pharmacy
Limin -1,50
Cost 1,500,000.0
Wall 1,500,000.00 0,000
method 0
Material .00
3,500
1,068,495,189 1,063,495,1 1,066,995,1
Total -- ,000. -- -- -- 0.00 0.00 0.00
.90 89.90 89.90
00
Notes:
4. Revenue and Cost of Sales
(1) Revenue and Cost of Sales
Unit: RMB Yuan
Item Reporting period Same period of last year
Main business revenue 2,114,438,399.15 2,308,393,542.03
Other business revenue 82,177,082.90 137,643,538.37
Cost of sales 1,679,182,666.68 1,659,122,418.86
Total 517,432,815.37 786,914,661.54
(2)Main business (Classified by industry)
□ Applicable √ Inapplicable
(3)Main business (Classified by product)
√ Applicable □ Inapplicable
Unit: RMB Yuan
Product name Reporting period Same period of last year
162
Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Revenue of sales Cots of sales Revenue of sales Cots of sales
Yarn-dyed fabric 1,530,542,447.91 1,211,696,693.45 1,727,830,220.45 1,155,080,806.78
Shirts 583,895,951.24 407,329,954.01 580,563,321.58 397,538,558.06
Total 2,114,438,399.15 1,619,026,647.46 2,308,393,542.03 1,552,619,364.84
(4) Main business (Classified by area)
□ Applicable √ Inapplicable
(5) Revenue of sales from the top five customers
Unit: RMB Yuan
Proportion of
Customers Total revenue of sales total revenue
of sales (%)
Li & Fung Limited 302,383,117.81 13.77%
TAL 156,194,264.20 7.11%
Chenfeng 97,931,400.74 4.46%
OLYMP 97,782,659.31 4.45%
PVH 56,611,280.95 2.58%
Total 710,902,723.01 32.36%
Notes
5. Investment income
(1)List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Long-term equity investment income accounted by
-549,000.00 165,000,000.00
cost method
Long-term equity investment income accounted by
equity method
Investment income arising from disposal of
long-term equity investments
Investment income received from holding of trading
financial assets
Investment income received from holding of
held-to-maturity investments
Investment income received from holding of
available-for-sale financial assets
Investment income received from disposal of trading
financial assets
Investment income received from holding of
15,004,234.49 33,590,067.77
held-to-maturity investments
Investment income received from available-for-sale
financial assets
Other
Total 14,455,234.49 198,590,067.77
(2) Long-term equity investment income accounted by cost method
Unit: RMB Yuan
Same period of
Name of investee Reporting period Reason for increase/decrease
last year
No dividends distributed in the
Lufeng Weaving & Dyeing 165,000,000.00
reporting period
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Limin Walling Material -549,000.00
Total -549,000.00 165,000,000.00 --
(3) Long-term equity investment income accounted by equity method
Unit: RMB Yuan
Same period of
Name of investee Reporting period Reason for increase/decrease
last year
Total --
Notes:
6. Supplemental information of Cash Flow Statement
Unit: RMB Yuan
Supplemental information Reporting period Same period of last year
1. Reconciliation of net profit to net cash flows generated
-- --
from operations：
Net profit 218,643,723.43 613,559,994.97
Add: Provision for assets impairments 1,827,033.97 3,803,053.48
Depreciation of fixed assets, oil and gas assets and
119,369,172.33 106,469,045.00
productive biological assets
Amortization of intangible assets 3,243,350.19 2,989,197.76
Amortization of long-term deferred expense
Losses/gains on disposal of property, intangible asset and
-199,595.78 4,961,425.10
other long-term assets (gains: negative)
Losses/gains on scrapped of fixed assets (gains:
negative)
Losses/gains from variation of fair value (gains: negative) 24,697,730.00 18,153,686.72
Financial cost (income: negative) 13,109,670.45 12,957,180.51
Investment loss (gains: negative) -14,455,234.49 -198,590,067.77
Decrease in deferred tax assets (increase: negative) -2,252,040.33 94,063.76
Increase in deferred tax liabilities (decrease: negative) -2,341,354.50 -3,015,660.00
Decrease in inventory (increase: negative) 38,361,216.37 -670,557,371.95
Decrease in accounts receivable from operating activities
131,976,225.19 17,182,655.65
(increase: negative)
Increase in accounts payable from operating activities
-109,565,788.89 467,283,939.39
(decrease: negative)
Others
Net cash flows generated from operating activities 422,414,107.94 375,291,142.62
2. Significant investing and financing activities without
-- --
involvement of cash receipts and payments
Debt converted into capital
Convertible company bonds due within 1 year
Financing leased fixed assets
3. Change of cash and cash equivalent: -- --
Closing balance of cash 268,644,073.54 390,690,627.69
Less: opening balance of cash 443,347,389.73 280,772,869.89
Plus: closing balance of cash equivalent
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
Less: opening balance of cash equivalents
The net increase in cash and cash equivalents -174,703,316.19 109,917,757.80
7. Information of assets and liabilities recognized by evaluation value from the counter
purchase
Unit: RMB Yuan
Name Evaluation value Original book value
Asset
Liabilities
(XVI)Supplemental information
1. Return on equity and earnings per share
Unit: RMB Yuan
The weighted average EPS
Profit in the reporting period
ROE (%) Basic EPS Diluted EPS
Net profit attributable to the Company's
5.79% 0.30 0.30
common stock shareholders
Net profit attributable to shareholders of
the Company's common stock after 5.82% 0.30 0.30
deducting non-recurring gains and losses
2. Particulars on the abnormal conditions of main items in the financial statements of the
Company and relevant reasons
(1) As of 30 Jun. 2012, closing amount of monetary capital was of RMB 439,679,107.11 yuan,
with a decrease of 45.80% compared with opening amount, mainly because the Company made
cash dividends payment.
(2) As of 30 Jun. 2012, closing amount of trading financial assets was of RMB 0.00 yuan, with a
decrease of 100.00% compared with opening amount, mainly because the fair value changes on
trading financial assets.
(3) As of 30 Jun. 2012, closing amount of notes receivable was of RMB 108,276,877.73 yuan,
with a decrease of 32.54% compared with opening amount, mainly because the decrease of
closing bank acceptance bill receivable.
(4) As of 30 Jun. 2012, closing amount of prepayments was of RMB 172,417,224.27 yuan, with a
decrease of 43.37% compared with opening amount, mainly because purchase prepayment of last
period was setteled in the reporting period.
(5) As of 30 Jun. 2012, closing amount of other accounts receivable was of RMB 113,333,271.54
yuan, with an increase of 52.06% compared to last period, mainly because the increase of export
rebates receivable.
(6) As of 30 Jun. 2012, closing amount of construction in progress was of RMB 209,315,087.63
yuan, a decrease of 58.32%, mainly because part of 50 million-meter high-grade yarn-dyed fabric
project was put into production and then transferred into fixed assets in the reporting period.
(7) As of 30 Jun. 2012, closing amount of other non-current assets was of RMB 7,890,690.00 yuan,
a decrease of 68.94% compared to opening balance, mainly because land prepayment was
transferred into intangible assets in the reporting period.
(8) As of 30 Jun. 2012, closing amount of trading financial liabilities was of RMB 10,107,650.00
yuan, an increase of 100.00% compared to opening balance, mainly because the fair value chagnes
on trading financial liabilities.
(9) As of 30 Jun. 2012, closing amount of notes payable was of RMB 18,259,051.11 yuan, an
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
increase of 52.39% compared to opening balance, mainly because the incsrease of bill payment.
(10) As of 30 Jun. 2012, closing amount of tax payable was of RMB -17,678,712.12 yuan, an
increase of 157.82% compared to opening balance, mainly because the increase of closing
allowance of input tax on taxable VAT.
(11) As of 30 Jun. 2012, closing amount of interest payable was of RMB 3,167,297.54 yuan, an
increase of 49.89% compared to opening balance, mainly because the increase of withdrawal
interest.
(12) As of 30 Jun. 2012, closing amount of dividends payable was of RMB 4,387,509.44 yuan, an
increase of 891.95%, mainly because the unsettlement of dividends payable of restricted shares in
the reporting period.
(13) As of 30 Jun. 2012, closing amount of non-current liabilities due within 1 year was of RMB
36,531,875.00 yuan, with a decrease of 47.10% compared to opening balance, mainly because the
decrease of long-term borrowings due within 1 year.
(14) As of 30 Jun. 2012, closing amount of long-term borrowings was of RMB 0.00 yuan, a
decrease of 100.00% compared to opening balance, mainly because the return of due borrowings
in the reporting period.
(15) As of 30 Jun. 2012, closing amount of deferred income tax was of RMB 2,133,545.52 yuan, a
decrease of 59.46% compared to opening balance, mainly because the decrease of taxable
temporary difference arising from fair value changes on trading financial assets.
(16) Occur amount of operating taxes and surtax from Jan. to Jun. of 2012 was of RMB
2,360,934.93 yuan, a decrease of 76.82% compared to that of same period of last year, mainly
because the decrease of city maintenace and contruction tax payable and education surtax payable.
(17) Occur amount of financial expense from Jan. to Jun. of 2012 was of RMB 36,737,830.95
yuan, an increase of 47.42% compared to that of same period of last year, mainly because the
increase of exchange loss.
(18) Occur amount of income on fair value change from Jan. to Jun. of 2012 was of RMB
-31,047,030.00 yuan, a decrease of 50.50% compared to that of same period of last year, mainly
because the disposal of due trading financial assets made relevant transfer into original recognition
of fair value changes, and the fair value changes of trading finacial assets.
(19) Occur amount of investment income from Jan. to Jun. of 2012 was of RMB 19,052,638.49
yuan, a decrease of 52.92% compared to that of same period of last year, mainly because the
decrease of investment income of trading financial assets.
(20) Occur amount of non-operating expense from Jan. to Jun. of 2012 was of RMB 2,142,808.56
yuan, a decrease of 80.99% compared to that of same period of last year, mainly because the
decrease of the disposal of non-current assets.
(21) Occur amount of income tax expense from Jan. to Jun. of 2012 was of RMB 49,766,218.79
yuan, a decrease of 51.58% compared to that of same period of last year, mainly because toal
profit in the reporting period was decreased and then with relevant reduce to income tax expense.
IX. Documents for Reference
Documents for Reference
I. Semi-annual Report 2012 signed by legal representative;
II. Financial statements signed and sealed by legal representative, principal of accounting work, and manager of
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Semi-annual Report 2012 of Lu Thai Textile Co., Ltd.
finance department;
III. In the reporting period, all originals of the Company’s documents and public notices have been publicly
disclosed in newspapers designated by CSRC;
IV. The text of this report was deposited in Securities Department of the Company.
Chairman of the Board of Directors: Liu Shizhen
Date for submission approved by the Board of Directors: 13 August, 2012
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