2014 Semi-annual Report of Luthai Textile Co., Ltd.
LUTHAI TEXTILE CO., LTD.
2014 SEMI- ANNUAL REPORT
August 2014
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Section I. Important Reminders, Contents & Definition
The Board of Directors, the Supervisory Committee, directors, supervisors and senior management
staff of Luthai Textile Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report
does not contain any false record or misleading statement or omit any material fact and shall hereby
accept, individually and collectively, responsibility for the factuality, accuracy and completeness of
the contents carried in this report.
Except the following directors, all other directors have attended in person the board session for
reviewing this report.
Reason for not attending the board session in
Name Position Name of proxy
person
Su Xin Independent director Resigned in Jul. 2014 No proxy
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into
share capital.
Liu Shizhen, company principal, Zhang Hongmei, chief of the accounting work, and Zhang Keming,
chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report
enclosed in this report is factual, accurate and complete.
This report is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Contents
Section I. Important Reminders, Contents & Definition ..........................................................................................................................2
Section II. Company Profile ....................................................................................................................................................................5
Section III. Highlights of Accounting Data & Financial Indicators .........................................................................................................7
Section IV. Report of the Board of Directors ...........................................................................................................................................9
Section VII. Preferred Shares ................................................................................................................................................................40
Section VIII. Directors, Supervisors & Senior Management Staff ........................................................................................................41
Section X. Documents for Reference ..................................................................................................................................................149
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Definition
Refers
Term Definition
to
Refers
Issuer, Company, the Company Luthai Textile Co., Ltd.
to
Refers
The Board of Directors The Board of Directors of Luthai Textile Co., Ltd.
to
Refers
The Supervisory Committee The Supervisory Committee of Luthai Textile Co., Ltd.
to
Refers
CSRC China Securities Regulation Commission
to
Refers
Yuan, Ten thousand RMB Yuan, RMB Ten thousand
to
Refers
The “Company Law” The “Company Law of the People’s Republic of China”
to
Refers
The “Securities Law” The “Securities Law of the People’s Republic of China”
to
Refers
Reporting period 1 Jan. 2014-30 Jun. 2014
to
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation LTA, LTB Stock code 000726, 200726
Stock abbreviation after
N/A
change (if any)
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 鲁泰纺织股份有限公司
Abbr. of the Chinese name of
鲁泰纺织
the Company (if any)
English name of the Company
LU THAI TEXTILE CO.，LTD
(if any)
Abbr. of the English name of
LTTC
the Company (if any)
Legal representative of the
Liu Shizhen
Company
II. Contact information
Company Secretary Securities Affairs Representative
Name Qin Guiling Zheng Weiyin
No. 81, Songling East Road, Zichuan No. 81, Songling East Road, Zichuan
Contact address
District, Zibo, Shandong, P.R.China District, Zibo, Shandong, P.R.China
Tel. 0533-5285166 0533-5285166
Fax 0533-5418805；5282188-234 0533-5418805
E-mail qinguiling@lttc.com.cn wyzheng@lttc.com.cn
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the reporting period?
□ Applicable √ Inapplicable
The registered address, office address and their postal codes, website address and email address of the Company did not change
during the reporting period. The said information can be found in the 2013 Annual Report.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable √ Inapplicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report
and the location where this report is placed did not change during the reporting period. The said information can be found in the 2013
Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the reporting period?
□ Applicable √ Inapplicable
The registration date and place of the Company, its business license No., taxation registration No. and organizational code did not
change during the reporting period. The said information can be found in the 2013 Annual Report.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Section III. Highlights of Accounting Data & Financial Indicators
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of any accounting policy or
correction of any accounting error?
□ Yes √ No
Same period of last
Reporting period YoY +/- (%)
year
Operating revenues (RMB Yuan) 3,114,226,581.62 3,060,495,255.17 1.76%
Net profit attributable to shareholders of the Company
476,880,256.93 416,175,890.38 14.59%
(RMB Yuan)
Net profit attributable to shareholders of the Company after
475,996,558.52 393,419,324.10 20.99%
extraordinary gains and losses (RMB Yuan)
Net cash flows from operating activities (RMB Yuan) 399,042,563.87 490,746,920.17 -18.69%
Basic EPS (RMB Yuan/share) 0.50 0.43 16.28%
Diluted EPS (RMB Yuan/share) 0.50 0.43 16.28%
Weighted average ROE (%) 7.81% 7.60% 0.21%
As at the end of the As at the end of last
+/- (%)
reporting period year
Total assets (RMB Yuan) 8,129,457,717.51 8,411,948,561.49 -3.36%
Net assets attributable to shareholders of the Company
6,106,473,928.72 5,988,054,133.73 1.98%
(RMB Yuan)
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
√Applicable □ Inapplicable
Unit: RMB Yuan
Net profit attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
Same period of last
Reporting period Closing amount Opening amount
year
According to Chinese accounting
476,880,256.93 416,175,890.38 6,106,473,928.72 5,988,054,133.73
standards
Items and amounts adjusted according to international accounting standards
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Impact on domestic equipments tax
credit recognized as deferred
754,500.00 842,500.00 -2,539,500.00 -3,294,000.00
income under international
accounting standards
According to international
477,634,756.93 417,018,390.38 5,985,514,633.73 5,984,760,133.73
accounting standards
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
√Applicable □ Inapplicable
The Company exempted from income tax for buying domestic equipment. According to Chinese accounting
standards, the income tax expenses are directly reduced which are recognized as deferred income related to assets
by the international accounting standards. According to the regulations of the international accounting standards,
this difference is amortized over the fixed using periods of year of the fixed assets and adjusting net profit and net
assets.
III. Items and amounts of extraordinary gains and losses
√Applicable □ Inapplicable
Unit: RMB Yuan
Item Amount Explanation
Gain/loss on the disposal of non-current assets (including the offset part of the asset
-2,003,634.07
impairment provisions)
Government grants recognized in the current period, except for those acquired in the
ordinary course of business or granted at certain quotas or amounts according to the 17,088,515.19
country’s unified standards
Gains and losses on change in fair value from tradable financial assets and tradable
financial liabilities, as well as investment income from disposal of tradable financial
-9,840,200.92
assets and tradable financial liabilities and financial assets available for sales except for
effective hedging related with normal businesses of the Company
Non-operating income and expense other than the above 1,646,765.12
Less: income tax effects 5,916,961.71
Minority interests effects (after tax) 90,785.20
Total 883,698.41 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
No such cases during the reporting period.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Section IV. Report of the Board of Directors
I. Overview
In the reporting period, the global economy remained in a slow recovery. The textile industry still
faced low international demand, slow growth of domestic demand, rising costs of production factors,
etc. Under the circumstances, we gave full play to our competitiveness in our full-length industrial
chain, insisted on independent R&D and innovation, thoroughly carried out the excellent
performance management and proactively carried forward the Luthai Production System (LTPS).
The technology innovation, cost control, market expansion, brand building, informationization,
corporate culture development, etc. progressed in a healthy and stable way. And the operating
results steadily improved in the reporting period.
For the reporting period, the Company achieved operating revenues of RMB 3.114 billion,
operating profit of RMB 553 million, net profit attributable to common share holders of RMB 477
million and net profit attributable to shareholders of the Company of RMB 476 million after
deducting extraordinary gains and losses, up 1.76%, 11.45%, 14.59% and 20.99% respectively from
the same period of last year.
During the reporting period, there were no change in the main business of the Company, main profit
source and composition.
In the reporting period, we decided to incorporate a wholly-funded subsidiary in Burma after we
had incorporated a Cambodian subsidiary to further improve the overseas industry chain, avoid the
rising labor cost in China and cultivate international managerial talents.
In the reporting period, we were granted the “China Industrial Award” by China Federation of
Industrial Economics. Meanwhile, on the “2014 China Industrial Enterprise Social Responsibility
Report Press Conference” co-organized by the Ministry of Industry and Information Technology of
China, the Industrial Development Organization of the United Nations and China Federation of
Industrial Economics, we were among the first to be given the title “China Industrial Enterprise
Social Responsibility Fulfillment Five-star Enterprise (2014)”. In the first listed company awarding
ceremony hosted by Sina Finance, we were honored as “The Listed Company Attaching the
Greatest Importance to Returns for Shareholders in 2013”. The Trade Union of the Company was
one of the winners in the 2013 National “Ankang Cup” Contest co-hosted by All China Federation
of Trade Unions and the State Administration of Work Safety. Besides, we were granted “The
Shandong Enterprise Management Award” by Shan Dong Economic and Information Technology
Committee.
During the reporting period, facing the severe situations of international and domestic markets, we
insisted on gathering internal strength, continued to conduct research and innovation, promoted the
research and development ability and strengthened the differentiation of product development. At
the same time, we enhanced cooperation among R&D, design and marketing personnel, and input
more efforts in product development and marketing to satisfy more and more individualized needs
of the customers. We launched 12 series of new products in the reporting period, which were
introduced to the market swiftly. Up to the end of the reporting period, 174 patent applications of
the Company were accepted, including 58 invention patents, 109 utility model patents and 7 design
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
patents. Among them, 122 patents were successfully authorized, including 18 invention patents, 97
utility model patents and 7 design patents. We have been accumulatively granted 30 state and
provincial awards, including 2 state second prizes for technology progress and 8 provincial prizes
for technology progress with the latter comprising 4 first prizes and 1 second prize. We have also
been granted 20 technology progress prizes by China National Textile and Apparel Council,
including 3 first prizes and 8 second prizes. We undertook 8 technology programs at the provincial
level or above and 9 significant research programs at the state and provincial levels. And we also
participated or organized the formulation of 19 sets of standards, including 5 state ones and 14
industry ones.
In the reporting period, we carried on with brand and marketing network development. We
co-incorporated “Beijing Luthai Youqian E-Commerce Co., Ltd.” with Beijing Bishibo
E-Commerce Consulting Co., Ltd., combining our competitive edges in full industrial chain
manufacture technique, quality assurance, etc. with emerging technologies such as 3D modeling
and internet, as well as combining the online marketing platform and the offline experience stores,
to provide highly cost-effective shirts with individualized design and quality service for consumers.
Meanwhile, in customization, we vigorously promoted design by software, business flow
re-arrangement, training of shopping guides for physical stores, process reengineering, production
infrastructure, etc. In terms of shirt fabrics, we introduced our spring and summer products for 2015
to customers from all over the world at Shanghai Spring Fabric Exhibition, Milan Showcase and
some other activities. And our products were recognized by more customers, which helped promote
the influence and reputation of our brand. In the reporting period, we completed the development of
fabrics for the autumn and winter of 2015, including 34 specifications and nearly 3,000 designs. We
also worked with some major customers in product designing, promoted international exchange
among designers and improved their design level. In the future, we will insist on the dual brand
marketing strategy and keep the multi-brand development patter with clear brand positioning,
hierarchical promotion and outstanding quality, to demonstrate the brand concept of “fit and
satisfactory”, and constantly attract consumers’ attention and recognition.
II. Main business analysis
Overview
In the reporting period, operating revenues increased 1.76% year on year. Operating costs, selling
expenses, administrative expenses and income tax expenses increased -2.14%, 13.81%, 13.08% and
5.22% respectively. Financial expenses decreased 69.42% due to the decreased interest expenses.
Net cash flows from investing activities decreased 72.88% year on year mainly because the cash
paid to acquire fixed assets increased 68.54%. Net cash flows from financing activities increased
25.46% mainly because the debt repayments in cash decreased 20.83%.
YoY change of major financial data:
Unit: RMB Yuan
Same period of
Reporting period YoY +/-% Main reasons for change
last year
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Operating revenues 3,114,226,581.62 3,060,495,255.17 1.76%
Operating costs 2,137,850,293.37 2,184,574,937.90 -2.14%
Selling expenses 93,108,145.82 81,811,840.15 13.81%
Administrative expenses 294,932,674.63 260,822,329.39 13.08%
Financial expenses 7,441,307.46 24,336,940.28 -69.42% The interest expenses decreased.
Income tax expenses 88,060,378.95 83,692,908.10 5.22%
R&D input 148,094,648.52 115,069,711.84 28.70%
Net cash flows from operating
399,042,563.87 490,746,920.17 -18.69%
activities
Net cash flows from investing The cash paid to acquire fixed assets
-336,371,410.80 -194,568,887.89 -72.88%
activities increased 68.54%.
Net cash flows from financing
-494,775,481.22 -663,791,817.68 25.46%
activities
Net increase in cash and cash
-427,603,384.69 -369,296,420.31 -15.79%
equivalents
Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable √ Inapplicable
No major changes occurred to the profit structure or sources of the Company during the reporting period.
Reporting period progress of the future development planning in the disclosed documents of the Company such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable √ Inapplicable
The Company did not mention any future planning for the reporting period in its disclosed documents such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.
Review the progress of any previously disclosed business plan in the reporting period:
Inapplicable
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrease Increase/decrease Increase/decrease
of operating of operating costs of gross profit
Operating Gross profit rate
Operating costs revenues over the over the same rate over the same
revenues (%)
same period of period of last year period of last year
last year (%) (%) (%)
Classified by industry:
Textile and
2,724,309,422.81 1,824,632,782.41 33.02% 4.13% 0.24% 2.59%
Apparel
Cotton 159,410,859.92 149,326,721.78 6.33% -28.49% -24.08% -5.43%
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Electricity and
119,119,630.13 88,061,054.53 26.07% 15.99% 3.30% 9.08%
steam
Other 37,080,728.02 28,270,113.47 23.76% 6.82% -2.15% 6.99%
Classified by product:
Fabric products 2,110,310,993.51 1,408,130,198.92 33.27% 3.73% -1.34% 3.42%
Shirts 613,998,429.30 416,502,583.49 32.17% 5.52% 5.98% -0.29%
cotton 159,410,859.92 149,326,721.78 6.33% -28.49% -24.08% -5.43%
Electricity and
119,119,630.13 88,061,054.53 26.07% 15.99% 3.30% 9.08%
steam
Other 37,080,728.02 28,270,113.47 23.76% 6.82% -2.15% 6.99%
Classified by region:
Hong Kong 223,063,001.01 148,872,395.32 33.26% -0.55% -5.39% 3.41%
Japan And South
188,416,112.34 126,981,508.64 32.61% -17.76% -19.43% 1.40%
Korea
Southeast Asia 756,436,217.45 504,853,083.64 33.26% 0.00% -4.86% 3.41%
Europe and
471,269,443.76 317,969,214.62 32.53% -0.28% -1.48% 0.83%
America
Other 441,989,539.34 295,295,948.84 33.19% 26.88% 21.11% 3.18%
China Mainland 958,746,326.98 696,318,521.13 27.37% 1.36% -3.15% 3.38%
IV. Core competitiveness analysis
The Company's comprehensive management ability, research and development ability, and the whole industry chain are the
company's core competitiveness, which did not change during the reporting period.
V. Investment analysis
1. Wealth management entrustment, derivative investments and entrustment loans
（1）Derivative investments
√Applicable □ Inapplicable
Unit：RMB Ten thousand
Proportion
Relate
Impairm of the Actual
d-part
Type of Initial Opening ent Closing closing gain/loss
Relat y Beginning Ending
Operator derivative investment investmen provisio investment investment in
ion transac date date
investment amount t amount n (if amount amount in reporting
tion or
any) the period
not
Company’s
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
closing net
assets (%)
Forward
Non-
Commerc settlement 28 Mar. 18 Sept.
relate No 148,404.11 98,449.79 24,180.09 3.70% 2,095.48
ial bank of 2013 2014
d
exchange
Forward
Non-
Commerc exchange 30 May
relate No 23,537.65 6 Jan. 2014 0 0 20.41
ial bank transaction 2014
d
s
Total 171,941.76 -- -- 98,449.79 24,180.09 3.70% 2,115.89
Capital source for derivative
The Company’s own funds
investment
Cases involving lawsuit (if
Naught
applicable)
Disclosure date of the board
announcement approving the 16 May 2013
derivative investment (if any)
Disclosure date of the general
meeting announcement approving
the derivative investment (if any)
The Company conducted derivatives products transaction in order for hedging. And the forward
settlement hedging was operated by installments, with the relevant amount not more than the
planned derivatives products transactions. And all derivatives products transaction was
zero-deposit. Meanwhile, the Company had a complete risk control system for sufficient analysis
and prevention of possible risks such as risk of laws and regulations, credit risk, operation risk
and market risk.
1. Risk of laws and regulations:
The Company conducted derivatives products transaction in strict accordance with relevant laws
Analysis on risks and control
and rules as well as regulatory policies from government securities regulatory authorities, if there
measures of derivative products
were no standard operation procedures and strict approval procedures, it was easy to cause
held in the reporting period
compliant and regulatory risks existing in the validity and feasibility of contract, commitments
(including but not limited to market
and other legal documents signed.
risk, liquidity risk, credit risk,
Precautionary measures: The Company carefully studied and mastered laws, regulations and
operation risk, law risk, etc.)
policies relevant to derivative products transaction, formulated internal control rules for the
forward settlement hedging business, standardized the operation procedures. And strengthened
the compliant examination on derivative products investment business, and strictly abided by
relevant laws, regulations and the Company’s internal management rules.
2. Credit risk and liquidity risk:
When the contract matures, the Company couldn’t deliver as scheduled due to insufficient
liquidity, and the counterparty or the Company couldn’t fulfill the contract due to other aspects
except the liquidity, which would cause credit risk and further economic losses for the Company.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Precaution measure: the Company chose the powerful financial institutions with good reputation
as the counterparty, and signed standard derivative products transaction contract, as well as
strictly controlled the credit risk of counterparty. The Company conducted derivative investment
transactions according to the relevant approval procedure, which was in line with relevant laws,
regulations, the Company’s Articles of Association, the Management Rules for Derivative
Investment of Lu Thai Textile Co., Ltd. and the Proposal on the Plan of Lu Thai Textile Co., Ltd.
for Derivative Transactions in 2013 approved at the 28th Session of the 6th Board of Directors on
15 May 2013, and performed relevant information disclosure responsibilities. The Company
decided the up limit for the amount of derivative products transaction according to the production
and operation scale and the progress of foreign exchange income for the Company, and delivered
by phases. It was also possible to use extension of term and other ways to ensure the fulfillment
of contract as schedules upon the mature of contract, and wouldn’t cause any loss of credit risk
for the Company due to insufficient liquidity or other reasons.
3. Operation risk:
The derivative financial transactions had high specialty and complexity, so imperfect internal
operation procedures, staffs and external events would make the Company to undertake risks
during the transaction.
Precaution measure: The Company promulgated strict authorization and approval system and
perfect regulatory mechanism, fixed the departments, operation procedures and approval
procedures system to conduct derivative products transaction, established special risk control
positions, implemented strict authorization and post checks and balances system, meanwhile, it
improved the overall quality of relevant personnel through strengthening the business training
and professional ethics education for them. Besides, it established the System of Reporting the
Abnormal Situation Timely, formed an efficient risk management procedures, so as to ensure to
lower the operation risks to the maximum.
4. Market risk:
The forward settlement of exchange is an important derivative products transaction, which was
significantly affected by the exchange rate fluctuation due to its large amount. The Central Bank
decided to expand the inter-bank spot RMB-dollar trading band from 1% to 2% since 17 Mar.
2014, which would increase the difficulty in the operation of forward settlement of exchange.
Besides, if the RMB is devalued by a large margin on the basis of the current situation before the
contract is due, so then, the larger losses shall incur in the contract on forward settlement of
exchange signed by the Company.
Risk analysis and precaution measure: Renminbi appreciated significantly compared with that
before the exchange rate reform, but Renminbi internationalization would be a long-term goal,
which decided that Renminbi would not depreciated significantly. Although the increased
fluctuation range added the operation difficulty, it provided a certain opportunity, which required
relevant personnel of the Company actively master the market trend, carefully operate and hold
positive opportunity, so as to try the best to reduce the market risks under the condition of
increased market difficulty.
Changes of market prices or fair 1. Up to 30 Jun. 2014, the Company held 6 undue financial derivative product contracts, totaling
values in the reporting period of the US$ 39 million, all forward settlement contracts (the latest expiration before Sept. 2014). The
invested derivatives. And the above financial derivative products accounted for 3.70% of the closing net assets.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
analysis on the fair value of the 2. From Jan. 2014 to Jun. 2014, the due financial derivative products of the Company totally
derivatives should include the equaled to US$ 238.0056 million, all of which were delivered on time and generated a gain of
specific use methods and the RMB 21.1589 million. The due forward settlement was US$ 199.6 million, all of which were
relevant assumptions and delivered on time and generated a gain of RMB 20.9548 million. The due forward foreign
parameters. exchange trading amount equaled to US$ 38.4056 million, all of which were delivered on time
and generated a gain of RMB 204,100.
Whether significant changes
occurred to the Company’s
accounting policy and specific
No significant change
accounting principles of derivatives
in the reporting period compared to
the previous reporting period
The Company’s independent directors Zhou Zhiji, Zhang Chengzhu, Wang Lei and Xu Jianjun,
concerning conducting derivatives business, have issued the following professional advice: we
Specific opinion from independent were of the opinion that it would strengthen the Company’s competitiveness to use derivative
directors on the Company’s transactions with focus on forward settlement and purchase as an effective tool to avoid foreign
derivatives investment and risk exchange risks, to strengthen the relevant internal control and to carry out the loss and risk
control prevention measures so as to improve the operation and management. It was considered feasible
for the Company to conduct derivative transactions with focus on forward settlement and
purchase, and no harm was done to interests of the Company’s shareholders.
2. Use of raised funds
（1）Overview of the use of raised funds
√Applicable □ Inapplicable
Unit: RMB Ten thousand
Total raised capital 95,081.45
Total raised capital input in the reporting period 773.3
Accumulative raised capital input 95,585.18
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 (%)
Overview of the use of raised funds
In Dec. 2008, the Company made an additional issue of 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,
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
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, 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 433,955,800, of which raised funds of RMB 140 million
was used, including RMB 28,103,000 for construction and RMB 111,897,000 for equipment purchase. The Project went into full
production in Apr. 2014.
In the reporting period, the raised funds investment to The Marketing Network Development Project increase RMB 7.733 million,
total raised funds investment is RMB 65.0373 million (of which RMB 5.0373 million was the net interest income from the raised
funds after deducting the bank charges). So far, in addition to set up specialty stores, the company expand online sales channel by
Luthai online and other electric business platform.
（2）Projects promised to be invested with raised funds
√Applicable □ Inapplicable
Unit: RMB Ten thousand
Investme Profit
Project Accumul Date when Material
Projects invested nt generat
changed or Raised Investme Input in ative the project Reach the change in
with raised capital progress ed in
not capital nt after the input up reaches the expected the
as promised and up to the the
(including input as adjustme reporting to the expected profit or project
investments with period-en reportin
partially promised nt (1) year period-en usable not feasibility
over-raised capital d (%)(3) g
changed) d (2) condition or not
＝(2)/(1) period
Projects invested with raised capital as promised
The Project for
Marketing 30 Jun.
Yes 6,000 6,000 773.3 6,503.73 100.00% 0 Yes No
Network 2014
Development
Subtotal of
promised
-- 6,000 6,000 773.3 6,503.73 -- -- 0 -- --
investment
projects
Investments of over-raised capital
Total -- 6,000 6,000 773.3 6,503.73 -- -- 0 -- --
Reason for failing
to reach scheduled
progress or
Naught
projected income
(explain one
project by one
16
2014 Semi-annual Report of Luthai Textile Co., Ltd.
project)
Explanation on
significant
Up to 30 Jun. 2014, no material change had occurred in the feasibility of the Company’s raised capital
changes in
investment projects.
feasibility of
projects
Amount, usage
and usage
N/A
progress of
over-raised capital
Change of the
implementation
location of any N/A
raised funds
investment project
Adjustment of the
implementation
method of any N/A
raised funds
investment project
Applicable
Advance input and On 11 Jan. 2009, Proposal on Replacing the Self-collected Funds of RMB 264,861,646.97 with the Input Raised
exchange of any Capital in Advance at the 27th Meeting of the 5th Board of Directors. Sponsor Guotai Junan Securities Co., Ltd.
raised funds expressed the same opinion. The Company engaged RSM China Certified Public Accountants to audit
investment project 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
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 Sep. 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
Idle raised capital announcement about temporarily supplementing working capital with raised funds was published on Securities
for temporarily Times, Shanghai Securities News and Ta Kung Pao dated 4 Sept. 2010. On 2 Mar. 2011, the Company returned,
supplementing in full amount, the raised funds used previously for supplementing working capital. On 28 Mar. 2011, it was
working capital reviewed and approved at the 9th 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 Sep. 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 on 30 Mar. 2011. On 21 Sep. 2011, the Company returned, in full
17
2014 Semi-annual Report of Luthai Textile Co., Ltd.
amount, the raised funds used previously for supplementing working capital.
Outstanding raised
funds in project
N/A
implementation
and reasons
Usage and
whereabouts of
Up to 30 Jun. 2014, the raised funds and interest had all been input.
unused raise
capital
Problems found in
the usage and
The Company performed its information disclosure duty in a timely, accurate and complete manner when it
disclosure affairs
used raised funds, temporarily supplemented working capital with raised funds and changed the investment
of raised capital
directions of raised funds. No violation of information disclosure rules was found.
and other
situations
（3）Change of projects invested with raised funds
√Applicable □ Inapplicable
Unit: RMB Ten thousand
Total raised Investment Date when Material
Actual Profit Reach
funds Actual progress up the project change in the
Project cumulative generated the
Project after planned to be input for to the reaches the after-change
before input by in the expected
change input for the reporting period-end expected project
change period-end reporting profit or
project after period (%)(3)＝ usable feasibility or
(2) period not
change (1) (2)/(1) condition not
Project for a
40-million
Project for
Meter
Marketing
Top-grade
Network 14,000 0 14,000 100.00% 1 Jun. 2013 0 Yes No
Yarn-dyed
Developme
Fabric
nt
Production
Line
Total -- 14,000 0 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
Reasons for change, decision-making
should be invested persistently on a long-term basis, so some raised funds for the project
procedure and relevant information
was idle for a long time, which affected the utilization efficiency of raised funds. In order
disclosure (explain one project by one
to increase the utilization efficiency of the capital and maximize shareholders’ interests,
project)
according to relevant stipulations in the management methods for use of raised funds, the
Company held the 2011 3rd Special Shareholders’ General Meeting on 18 Oct. 2011, at
18
2014 Semi-annual Report of Luthai Textile Co., Ltd.
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 went into
progress or projected income (explain
full operation in Apr. 2014.
one project by one project)
Explanation on significant changes in
No
feasibility of projects after change
（4）Projects invested with raised funds
Overview of the project Disclosure date Index for the disclosed information
Please refer to The annual verification
The annual verification report about the report about the deposit and the actual
deposit and the actual usage of the usage of the Company’s raised funds
27 Mar. 2014
company’s raised funds. disclosed on 27 Mar. 2014 which was the
same time of the 2013 annual report.
3. Analysis to main subsidiaries and stock-participating companies
√ Applicable □ Inapplicable
Main subsidiaries and stock-participating companies:
Unit: RMB Yuan
Com
Main
Company pany Industr Registered Operating Operating
products/s Total assets Net assets Net profit
name variet y capital revenues profit
ervices
y
Xinjiang Lu
Lint,
Thai Harvest Subsi Manuf 200,725,0
cotton 558,583,974.94 425,506,468.70 325,430,583.40 11,044,095.68 11,598,662.25
Cotton Co., diary acture 50.55
yarn
Ltd.
Zibo Luqun
Subsi Manuf Spinning, 168,220,0
Textile Co., 475,964,462.05 347,126,923.09 139,903,501.29 3,380,037.73 2,558,564.04
diary acture twisting 00
Ltd.
Zibo
Xinsheng Subsi Manuf Electricity, 162,435,6
429,945,097.53 358,817,201.37 228,841,267.04 68,332,148.47 54,466,274.89
Thermal diary acture steam 00.00
Power Co.,
19
2014 Semi-annual Report of Luthai Textile Co., Ltd.
Ltd.
Lufeng
Weaving & Subsi Manuf 706,160,0
Fabric 1,444,419,478.44 1,080,407,168.54 657,933,121.05 23,831,696.88 21,324,978.18
Dyeing Co., diary acture 00
Ltd.
4. Significant projects of investments with non-raised funds
√ Applicable □ Inapplicable
Unit: RMB Ten thousand
Cumulative actual
Total planned Input for the reporting Project
Project name input as at the Project progress
investment period earnings
period-end
New 230,000 Spindle and
35,000 Ingot Two-for-One
92,866 4,398.68 9,123.15 9.82% 0
Twisting Production Line
Project
Total 92,866 4,398.68 9,123.15 -- --
Date when the relevant interim announcement (if 23 Mar. 2012
any) was disclosed on the designated website
The Announcement on the New 230,000 Spindle and 35,000 Ingot Two-for-One
Designated website where the relevant interim
Twisting Production Line Project (announcement No. 2012-008) was disclosed
announcement (if any) was disclosed
on http://www.cninfo.com.cn.
VI. Predict the operating results of Jan.-Sept. 2014
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the
next reporting period according to prediction, as well as explanations on the reasons:
□Applicable √ Inapplicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the reporting period
□ Applicable √ Inapplicable
VIII. Explanation by the Board of Directors about the “non-standard audit report” for last
year
□ Applicable √ Inapplicable
20
2014 Semi-annual Report of Luthai Textile Co., Ltd.
IX. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment of the cash dividend plan and the
plan for turning capital reserve into share capital:
√ Applicable □ Inapplicable
Pursuant to the 2013 Profit Allocation Proposal reviewed and approved on the 2013 Annual Shareholders’ General Meeting on 30
Apr. 2014, the Company carried out the cash dividend distribution plan in May 2014, which was in compliance with the articles
governing dividends in the Articles of Association of the Company. And the cash dividend policy did not change in the reporting
period.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and the resolution of the general meeting Yes
Specific and clear dividend standard and ratio Yes
Complete decision-making procedure and mechanism Yes
Independent directors fulfilled their responsibilities and played their due role. Yes
Minority shareholders have the chance to fully express their opinion and desire and their legal rights
Yes
and interests were fully protected.
In adjustment or alteration of the cash dividend policy, the conditions and procedure were in
Inapplicable
compliance with regulations and transparent.
X. Preplan for profit distribution and turning capital reserve into share capital for the
reporting period
□ Applicable √ Inapplicable
The Company planed not to distribute cash dividends or bonus shares or turn capital reserve into share capital for the reporting
period.
XI. Researches, visits and interviews received in the reporting period
√ Applicable □ Inapplicable
Main discussion
Way of and materials
Time Place Visitor type Visitor
reception provided by the
Company
Wang Liping and Wu Yuanyi from Shenyin & The Company’s
27 Mar. 2014 By phone Institution
Wanguo basic situation
The Company’s
27 Mar. 2014 By phone Institution Chen Xiaoyan from Anbang Asset Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Wang Qiong from Baoying Fund
basic situation
27 Mar. 2014 By phone Institution Liu Liang from Chang Xin Asset Management The Company’s
21
2014 Semi-annual Report of Luthai Textile Co., Ltd.
basic situation
The Company’s
27 Mar. 2014 By phone Institution Wang Hui from Orient Securities
basic situation
The Company’s
27 Mar. 2014 By phone Institution Shao Meiling from Soochow Asset Management
basic situation
Zhu Yufeng from Everbright Pramerica Fund The Company’s
27 Mar. 2014 By phone Institution
Management basic situation
The Company’s
27 Mar. 2014 By phone Institution Liu Bing from Everbright Securities
basic situation
The Company’s
27 Mar. 2014 By phone Institution Shi Meiling from National Trust
basic situation
The Company’s
27 Mar. 2014 By phone Institution Lu Jing from Guotai Asset Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Yang Xingxing from HuaAn Funds
basic situation
The Company’s
27 Mar. 2014 By phone Institution Zhang Xuewei from Harfor Fund Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Xu Da from Huaxin Fund
basic situation
Qiu Dongrong from HSBC Jintrust Fund The Company’s
27 Mar. 2014 By phone Institution
Management basic situation
The Company’s
27 Mar. 2014 By phone Institution Mang Chun from HSBC Jintrust Fund Management
basic situation
Zheng Huilian from China Universal Asset The Company’s
27 Mar. 2014 By phone Institution
Management basic situation
The Company’s
27 Mar. 2014 By phone Institution Li Ran from Invesco Great Wall Fund Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Zhan Jiao from Morgan Stanley Huaxin Funds
basic situation
The Company’s
27 Mar. 2014 By phone Institution Li Hui from BNY Mellon Western FMC
basic situation
The Company’s
27 Mar. 2014 By phone Institution Li Huijie from Penghua Fund
basic situation
Li Jiajia from China International Fund The Company’s
27 Mar. 2014 By phone Institution
Management basic situation
Qiao Qian from Aegon-Industrial Fund The Company’s
27 Mar. 2014 By phone Institution
Management basic situation
The Company’s
27 Mar. 2014 By phone Institution Shu Lihua from Industrial Securities
basic situation
22
2014 Semi-annual Report of Luthai Textile Co., Ltd.
The Company’s
27 Mar. 2014 By phone Institution Wang Xiang from Yinhua Fund Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Chen Fan from Yinhua Fund Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Liu Ming from Yuanchen Investment
basic situation
The Company’s
27 Mar. 2014 By phone Institution Gao Yuanyuan from China Life Pension
basic situation
The Company’s
27 Mar. 2014 By phone Institution Huang Yangxia from China Securities
basic situation
The Company’s
27 Mar. 2014 By phone Institution Luo Xiang from CITIC Securities
basic situation
Ma Li, Yang Lan and Hua Xiaowei from China The Company’s
27 Mar. 2014 By phone Institution
Galaxy Securities basic situation
The Company’s
27 Mar. 2014 By phone Institution Sun Yuanjia from Ivy Asset Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Jin Ge from Taikang AMC
basic situation
Weng Di from Shanghai Milestone Asset The Company’s
27 Mar. 2014 By phone Institution
Management basic situation
The Company’s
27 Mar. 2014 By phone Institution Liu Yuxiu from Changsheng Fund Management
basic situation
The Company’s
27 Mar. 2014 By phone Institution Ding Wenya from Shanghai Strength Asset
basic situation
The Company’s
25 Apr. 2014 By phone Institution Xu Cheng from Tokio Marine Asset Management
basic situation
The Company’s
25 Apr. 2014 By phone Institution Zhang Jing from China Post Fund
basic situation
The Company’s
25 Apr. 2014 By phone Institution Cao Yan from CICC
basic situation
The Company’s
25 Apr. 2014 By phone Institution Bai Bingyang from BOC International (China)
basic situation
Zhu Yufeng from Everbright Pramerica Fund The Company’s
25 Apr. 2014 By phone Institution
Management basic situation
The Company’s
25 Apr. 2014 By phone Institution Lu Hui from Qianhe Capital
basic situation
The Company’s
25 Apr. 2014 By phone Institution Chen Yuan from HuaAn Funds
basic situation
23
2014 Semi-annual Report of Luthai Textile Co., Ltd.
The Company’s
25 Apr. 2014 By phone Institution Cai Wen from Mirae Asset
basic situation
The Company’s
25 Apr. 2014 By phone Institution Li Xiaoli from Fullerton Fund Management
basic situation
The Company’s
25 Apr. 2014 By phone Institution Huang Zhiqing from Kaixinlong Fund
basic situation
The Company’s
25 Apr. 2014 By phone Institution Chen Li from Tebon Fund
basic situation
The Company’s
25 Apr. 2014 By phone Institution Liu Shuxiang from China Merchants Fund
basic situation
Wu Baoling from Singapore Lion Global Investors The Company’s
25 Apr. 2014 By phone Institution
Limited basic situation
The Company’s
25 Apr. 2014 By phone Institution Qiu Dongrong from HSBC Jintrust
basic situation
The Company’s
25 Apr. 2014 By phone Institution Lu Lina from N M Rothschild & Sons
basic situation
The Company’s
25 Apr. 2014 By phone Institution Liu Yong from Haitong Securities
basic situation
The Company’s
25 Apr. 2014 By phone Institution Li Xiang from CAIDA Investment
basic situation
Meng Cheng from Shanghai Milestone The Company’s
25 Apr. 2014 By phone Institution
Management basic situation
The Company’s
25 Apr. 2014 By phone Institution Liu Liang from Chang Xin Asset Management
basic situation
The Company’s
25 Apr. 2014 By phone Institution Zhang Xuepeng from Sunshine Asset Management
basic situation
24
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Section V. 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 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.
II. Significant lawsuits or arbitrations
□ Applicable √ Inapplicable
The Company was not involved in any significant lawsuit or arbitration in the reporting period.
III. Media’s queries
□Applicable √Inapplicable
There was no media’s common query during the reporting period.
IV. Bankruptcy reorganization
□ Applicable √ Inapplicable
No event involving bankruptcy reorganization occurred to the Company in the reporting period.
V. Asset transactions
1. Sale of assets
□ Applicable √ Inapplicable
There was no sale of assets by the Company during the reporting period.
2. Business combination
□ Applicable √ Inapplicable
No business combination occurred to the Company during the reporting period.
25
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
VI. Implementation of equity incentive and its influence
√ Applicable □ Inapplicable
1. Summary of equity incentive plan
On 8 April 2011, the 10th Session of the 6th Board of Directors reviewed and approved “2011 Plan on Restricted Stock Incentive of
Lu Thai Textile Co., Ltd.” (Draft) According to requirements of CSRC, the Company submitted the complete application materials
on equity incentive plan to CSRC for the record. In accordance with feedback from CSRC, the Company revised the incentive plan
and formed “2011 Plan on Restricted Stock Incentive of Lu Thai Textile Co., Ltd.”(Revised Draft) which was approved in the 13th
session of the 6th Board of Meeting on 15 July 2011 without objection of CSRC. On 3 Aug. 2011, the Company held the 2 nd
Temporary Shareholders’ General Meeting for 2011 and approved “2011 Plan on Restricted Stock Incentive of Lu Thai Textile Co.,
Ltd.” (Revised draft)
With the authorization of shareholders’ general meeting, on 17 Aug. 2011, the Company held the 15 th Session of the 6th Board of
Directors and approved “Proposal on Granting Incentive Objects Restricted Stocks According to 2011 Plan on Restricted Stock
Incentive” and decided that 18 Aug. 2011 was fixed as grant date of the above incentive plan. On the same day, “Proposal on
Personnel Adjustment in 2011 Plan on Restricted Stock Incentive of Lu Thai Textile Co., Ltd.” was reviewed and approved. Because
four employers were not qualified for requirements of incentive objects, their qualifications of incentive objects were canceled and
they were not granted restricted stocks. Therefore, the number of incentive objects changed from 350 into 346 and the amount of
granted restricted stocks changed from 14.3 million shares to 14.12 million shares.
“Announcement of Lu Thai Textile Co., Ltd. on Finishing Granting Restricted Stocks” declared on 6 Sep. 2011 clarified that: because
of personal reasons, incentive objects including Guo Yuan and Yang Tao voluntarily gave up restricted stocks the Company was
about to endow, respectively 10,000 shares and 20,000 shares. Therefore, the number of incentive objects changed from 346 into 344
and the amount of granted stocks changed from 14.12 million shares into 14.09 million shares. Up to now, the Company has already
finished granting restricted stocks: grant date is 18 Aug. 2011, the amount of granted stocks is 14.09 million shares, the number of
incentive objects is 344 and grant price is RMB 5.025 per share.
On 13 Aug. 2012, the 23rd Session of the 6th Board of Directors reviewed and approved “Proposal on Repurchasing and Withdrawing
Restricted Stocks Granted to Unqualified Original Incentive Objects”. Original incentive objects including Liu Qingchun and Shi
Qian left their posts during the assessment period and they were not qualified for regulations of restricted stock incentive plan, so the
stocks granted to the above persons, respectively 20,000 shares and 40,000 shares, were repurchased and withdrawn; withdrawal was
completed on 6 Dec. 2012. Therefore, the number of incentive objects of restricted stocks changed to 342, and the amount of
restricted stocks change to 14.03 million shares.
On 27 Mar. 2013, the Company passed “Proposal on Restricted Stock Granted to Previous Incentive Objects Who Fall through
Incentive Requirements” and “Proposal on Restricted Stock Granted to All Incentive Objects and still Locked during the Second
Unlocking Period” on 26th Session of the 6th Board of Directors. The Company decided to repurchase and write off locked and
restricted stocks of Zhangtao, Mengming and Chuiyan in the amount of 12,000 shares, 12,000 shares, 12,000 shares respectively,
because they were left on January 2013 and fell through the standard of incentive plan of restricted stocks. In addition, previous
incentive object, Qu Qingfeng has arranged retirement and left in January 2013. pursuant to “the 33 rd” in incentive plan, part of
restricted stocks of Qu Qingfeng still locked in the second period were still valid,; restricted stocks still locked in the third period in
the amount of 30,000 shares would be repurchased and written off by the Company. The restricted stocks repurchased and written off
this period reached 66,000 shares and incentive objects decreased four people; therefore, incentive objects holding restricted shares in
the second period declined to be 339, and restricted stocks still locked were adjusted to be 4,191,000 shares. In line with stipulation
of stock incentive plan, unless company performance index meets three requirements of unlocking requirement of 2012
simultaneously, can companies unlock. Net profits of the Company increased 0.52% comparing to 2010 after being deducted
non-recurring profit and loss and was lower than the examination requirement, therefore, the stock incentive plan in the second
period did not comply with the unlocking requirements. Under this situation, the Company shall repurchase and write off all stocks
26
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
according to relevant stipulations of “Repurchase and write-off of restricted stocks” in the 8th chapter of stock incentive plan. The
restricted stock stated above were written off on 27 Jun. 2013, therefore, incentive objects who obtain restricted stocks in the third
period became 338, and restricted stocks still locked in the third period reached 4,161,000 shares.
On 11 Jun. 2014, the 11th Session of the 7th Board of Directors of the Company reviewed and approved the “Proposal on Restricted
Stock Granted to Previous Incentive Objects Who Fall through Incentive Requirements” and “Proposal on the Third Unlocking
Period of 2011 Plan on Restricted Stock Incentive of Lu Thai Textile Co., Ltd.”. The original incentive targets Gao Hong failed in the
2013 performance assessment, of whom the third unlocking restricted shares of 18,000 shares should not be locked and would be
repurchased and written off by the Company; The original incentive targets Yang Jun, Wang Fuye, Yang Zezhi, Zhai Shenbo and
Yang Jian had left their position during Aug. 2013 to May 2014, which had not met with the incentive plan of “No. 20 Unlocking
Arrangement and Inspection Conditions of Restricted Stocks”. Those 5 people had been granted the whole unlocking stocks which
was amounted to 24,000 shares and had be repurchased and written off by the Company. Therefore, there were 332 people met with
the conditions of the third period of the incentive plan, with the unlocking stocks of the restricted stocks of the third period adjusted
to 4.1190 million shares.
2. Source of incentive stocks:
Directional add-issuance of restricted stocks to incentive objects.
3. Assessment to incentive objects
The human resource department of the Company, according to implementation and assessment methods of restricted stock incentive
plan of Lu Thai Textile Co., Ltd., conducted appraisal of 2011 annual performance of incentive objects and the appraisal result was
that: they were all qualified and met the conditions of unlocking.
Net profits of the Company increased 0.52% comparing to 2010 after being deducted non-recurring profit and loss and was lower
than the examination requirement, therefore, the stock incentive plan in the second period did not comply with the unlocking
requirements. Under this situation, the Company shall repurchase and write off all stocks according to relevant stipulations of
“Repurchase and write-off of restricted stocks” in the 8th chapter of stock incentive plan and repurchased all restricted stocks on 27
Jun. 2013.
According to the Implementation of assessment measures, the Enterprise Management Department of the Company and Human
Resources Department examined the 333 incentive targets of the 2013 performance except for the 5 original incentive targets that left
the Company during Aug. 2013 to May 2014, with the examination result: all passed and met with the unlocking conditions except
the incentive target Gao Hong. The incentive locking period of the third period of the restricted stocks was ended on 18 Aug. 2014
and had not unlocked at the moment.
4. Particulars about unlocking incentive stocks:
On 13 Aug. 2012, the 23rd session of the 6th board of directors reviewed and approved “Proposal on Unlocking Restricted Stock
Incentive Plan During the First Unlocking Period” and approved that the 342 qualified incentive objects were unlocked during the
first unlocking period, the proportion of unlocked shares during the first unlocking period in total granted incentive shares was 40%
and the amount of unlocked shares was 5.612 million shares. The listing date of firstly unlocked shares was 3 Sep. 2012.
5. Influence of implementing stock incentive plan on financial situation and operation results during the reporting period and
in the future
The fee of implementing stock incentive plan during the reporting period was RMB 4,747,000 and the influenced total profit of the
Company in the first half year of Jan.-Jun of 2014 reached RMB 4,747,000.
27
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
√ Applicable □ Inapplicable
Obtaina
ble
Relate Proportion in market
Type Contents Transactio Metho
d the total price for
of the of the Pricing Transactio n amount d of Disclosu
transac Relation amounts of the Disclosure index
transac transacti principle n price (RMB Ten settle re date
tion transactions of transacti
tion on thousand) ment
party the same kind on of the
same
kind
Parent Reacc Please refer to the
Limin compan eptanc relevant
Sewage
Purifie y wholly e of Market Market 27 Mar. announcements
treatmen 487.88 99.07% Cash
d owned labor price price 2014 disclosed on
t
Water compan service www.cninfo.com.c
y s n
Please refer to the
Lease of
relevant
Luche Parent land,
Market Market 27 Mar. announcements
ng compan Lease houses 846.84 64.72% Cash
price price 2014 disclosed on
Textile y and gas
www.cninfo.com.c
station
n
Parent Please refer to the
compan relevant
Luqun Lease of
y wholly Market Market 29 Mar. announcements
Proper Lease land and 90.12 6.89% Cash
owned price price 2013 disclosed on
ty houses
compan www.cninfo.com.c
y n
Parent
Please refer to the
compan
Sales relevant
Lurui y Purchase
of Market Market 27 Mar. announcements
Chemi controlle of textile 1,466.53 17.31% Cash
produc price price 2014 disclosed on
cal d auxiliary
ts www.cninfo.com.c
compan
n
y
Parent Sales of Please refer to the
Cheng Sales
compan material Market Market 27 Mar. relevant
shun of 169.11 0.22% Cash
y s, price price 2014 announcements
Therm produc
controlle thermal disclosed on
28
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
al d ts water www.cninfo.com.c
compan and n
y garment
s
Total -- -- 3,060.48 -- -- -- -- --
Details of large-amount refunds Naught
Where the total amount of routine
related-party transactions to occur
in the reporting period had been
Naught
predicted by type, give the actual
execution in the reporting period
(if any)
Explanation on significant
difference between the transaction
Naught
price and the market price (if
any).
2. Related-party transactions arising from acquisition and sale of assets
√ Applicable □ Inapplicable
Book Assessed
value of value of Market
Transfer
the the fair Gain/loss
Type of Contents price
Related transferr transferr value Mode of (RMB
the of the Pricing (RMB Disclosu Disclosu
transacti Relation ed asset ed asset (RMB settleme Ten
transacti transacti principle Ten re date re index
on party (RMB (RMB Ten nt thousand
on on thousand
Ten Ten thousand )
)
thousand thousand )
) )
Please
refer to
Purchase the
Parent of relevant
company commerc announc
Luqun Market 16 May
wholly Purchase ial 3,141.61 Cash ements
Property price 2014
owned housing disclose
company and d on
shops www.cni
nfo.com.
cn
29
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
VIII. Occupation of the Company’s funds for non-operating purposes by the controlling
shareholder and its related parties
□ Applicable √ Inapplicable
The controlling shareholder or its related parties did not occupy the Company’s funds for non-operating purposes during the reporting
period.
IX. Significant contracts and fulfillment thereof
1. Trusteeship, contracting and leasing
(1) Trusteeship
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Particulars on external guarantee of the Company (excluding guarantees for subsidiaries)
Date of Whether
disclosure Whether guarantee
Date of making
of relevant the ing for
Name of guarantee Guarantee guarantee (date Actual amount Type of Guarantee
announcem guarantee related
object limit of signing of guarantee guarantee period
ents on has been parties
agreement)
guarantee fulfilled (yes or
limit no)
Particulars about guarantee of the Company for subsidiaries
Date of
Whether
disclosure
Whether guarantee
of relevant Date of making
Actual amount the ing for
Name of guarantee announcem Amount of guarantee (date Type of Guarantee
of guarantee guarantee related
object ents on guarantee of signing guarantee period
has been parties
guarantee agreement)
fulfilled (yes or
limit
no)
From the
date of
implementin
Guarantee of g loan within
Lufeng Weaving & 13 May joint and credit line to
30,000 10 May 2011 514.71 No Yes
Dyeing Co., Ltd. 2011 several the date of
liability clearing off
loan
principal and
interest
30
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Two years
Guarantee of since the
Xinjiang Lu Thai
14 Jul. joint and approval of
Harvest Cotton Co., 10,000 13 Jul. 2012 0 Yes Yes
2012 several the board of
Ltd.
liability the
Company
Two years
Guarantee of since the
Luthai (HK) Co., 27 Mar. joint and approval of
18,300 25 Mar. 2014 708.49 No Yes
Ltd. 2014 several the board of
liability the
Company
Total amount of actual
Total amount of approved
guarantee for subsidiaries
guarantee for subsidiaries 18,300 708.49
during the reporting period
during the reporting period (B1)
(B2)
Total amount of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 58,300 1,223.2
the end of the reporting period
end of the reporting period (B3)
(B4)
Total amount of guarantee (sum total of the first two items)
Total amount of approved Total amount of actual
guarantee during the reporting 18,300 guarantee during the reporting 708.49
period (A1+B1) period (A2+B2)
Total amount of approved Total amount of actual
guarantee at the end of the 58,300 guarantee at the end of the 1,223.2
reporting period (A3+B3) reporting period (A4+B4)
Proportion of total amount of actual guarantee (A4+B4) in net
0.20%
assets of the Company
Among which:
Amount of guarantee provide for shareholders, actual controller
0
and related parties (C)
Amount of guarantee provided directly or indirectly for
guarantee objects with asset-liability ratio reaching over 70% 0
(D)
Balance between 50% of net assets and total amount of
0
guarantee which exceeds 50% of net assets (E)
Sum total of the above three guaranteed amounts (C+D+E) 0
Explanations about joint and several liability for repayment in According to “Agreement on Counter Guarantee” signed on 12
respect of undue guarantee (if any) May 2011 between Lu Thai Company and Lu Feng Company, Lu
31
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Feng Company , the warrantee provided the corresponding
amount of counter guarantee for Lu Thai Company. According to
“Agreement on Counter Guarantee” signed on 13 July 2012
between Lu Thai Company and Xinjiang Lu Thai Company,
Xinjiang Lu Thai Company , the warrantee provided the
corresponding amount of counter guarantee for Lu Thai Company.
According to “Agreement on Counter Guarantee” signed on 24
Sep. 2012 between Lu Thai Company and Xinjiang Lu Thai
Company, Xinjiang Lu Thai Company , the warrantee provided
the corresponding amount of counter guarantee for Lu Thai
Company. Decision-making procedure of guarantee for controlling
subsidiaries complied with laws without damaging the interests of
the Company and shareholders, especially the interests of medium
and small shareholders.
Explanation about external guarantee violating established The Company never provided guarantees for companies except
procedure (if any) controlling subsidiaries.
Explanations about guarantees provided with complex methods
X. Commitments made by the Company or any shareholder holding over 5% of the
Company’s shares in the reporting period or such commitments carried down into the
reporting period
√ Applicable □ Inapplicable
Commitment Contents of Date of Period of
Commitment Execution
maker commitment commitment commitment
Commitments made in a
N/A N/A N/A N/A
share reform
Commitments made in
acquisition reports or
N/A N/A N/A N/A
report on changes in
equity
Commitments made at the
time of assets N/A N/A N/A N/A
reorganization
Investment projects of raised funds
including project on 150 thousand
ingots of high-end combed yarn,
Commitments at the time Lu Thai Investment
project on production line of 50
of initial public issuance Textile Co., project of 19 Dec. 2008
thousand ingots of two-for-one
or re-financing Ltd. raised funds
twisting, project on complementing
circulating funds of the company,
project on production line of 10
32
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
million meters of high-end jacquard for
female garments have already been
fulfilled. On 18 Oct. 2011, the 3rd
temporary shareholders’ general
meeting approved that RMB 140
million raised funds of this project
were transferred into project on
increasing 40 million meters of
high-end yarn-dyed fabric production
line. Till the end of the reporting
period, this project has already been
finished. And project on network
construction of brand and marketing is
under the implementation.
Other commitments made
for medium and small
N/A N/A N/A N/A
shareholders of the
Company
Whether commitments
Yes
were fulfilled in time
Specific reasons of
unfinished fulfillment and N/A
further plan
XI. Engagement and disengagement of the CPAs firm
Has the semi-annual financial report been audited?
□ Yes √ No
XII. Punishments and rectifications
□ Applicable √ Inapplicable
No punishment or rectification in the reporting period.
XIII. Delisting risk due to violation of laws or regulations
□ Applicable √ Inapplicable
No such risk in the reporting period.
XIV. Other significant events
√ Applicable □ Inapplicable
During the reporting period, the largest shareholder Zibo Lucheng Textile Investment Co., Ltd. increased twice of the stocks business
33
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
of the Company, with the specific situation as follows:
1. On 12 Dec. 2013 and 17 Jan. 2014, through Securities Exchange System of Shenzhen Stock Exchange, Zibo Lucheng Textile
Investment Co., Ltd. accumulatively increased the current A share (000726) of the Company by centralized competitive trading
method, which was of 11,299,225 shares in total that was 14.08% of the total share capital of 955,800,496 shares. For the specific
situation of the event, please refer to the relevant announcements disclosed on Securities Times, Shanghai Securities News, Ta Kung
Pao and www.cninfo.com.cn on 18 Jan. 2014.
2. On 4 Jun. 2014 and 27 Jun. 2014, through Securities Exchange System of Shenzhen Stock Exchange, Zibo Lucheng Textile
Investment Co., Ltd. accumulatively increased the current A share (000726) of the Company by centralized competitive trading
method, which was of 5,739,658 shares that was of 0.60% of the total share capital of the Company with the average increase price
of RMB 8.71 Yuan. After the increase, the total stocks of the Company were of 140,353,583 shares that covered 14.68% of the total
share capital of 955,800,496 shares. For the specific situation of the event, please refer to the relevant announcements disclosed on
Securities Times, Shanghai Securities News, Ta Kung Pao and www.cninfo.com.cn on 1 Jul. 2014.
34
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Section VI. Change in Shares & Shareholders
I. Change in shares
Unit: Share
Before the change Increase/decrease (+, -) After the change
Capitalizatio
Percenta New Bonus Percentag
Number n of capital Other Subtotal Number
ge shares shares e
reserve
I. Restricted shares 123,209,603 12.89% -5,250 -5,250 123,204,353 12.89%
1. Shares held by the state 0.00% 0.00%
2. Shares held by
0.00% 0.00%
state-owned corporations
3. Shares held by other
4,977,203 0.52% -5,250 -5,250 4,971,953 0.52%
domestic investors
Among which: shares held
0.00% 0.00%
by domestic corporations
Shares held by domestic
4,977,203 0.52% -5,250 -5,250 4,971,953 0.52%
individuals
4. Shares held by foreign
118,232,400 12.37% 118,232,400 12.37%
investors
Among which: Shares held
118,232,400 12.37% 118,232,400 12.37%
by foreign corporations
Shares held by foreign
0.00% 0.00%
individuals
II. Non-restricted shares 832,590,893 87.11% 5,250 5,250 832,596,143 87.11%
1. RMB ordinary shares 556,982,697 58.27% 5,250 5,250 556,987,947 58.27%
2. Domestically listed
275,608,196 28.84% 275,608,196 0.00%
foreign shares
3. Overseas listed foreign
0.00%
shares
4. Other 0.00%
III. Total shares 955,800,496 100.00% 0 0 955,800,496 100.00%
Reasons of changes in shares
√ Applicable □ Inapplicable
Due to the unlocking of the restricted sales at the year-begin of the 5250 shares held by the Senior Executive Quan Peng, the shares
35
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
held by the domestic individual with restricted conditions reduced of 5250 shares as well as the Renminbi common shares among the
unlimited shares increased 5250 shares.
Approval of share changes
□ Applicable √ Inapplicable
Transfer of share ownership
□ Applicable √ Inapplicable
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Company
and other financial indexes over the last year and the last reporting period
□ Applicable √ Inapplicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to disclose
□ Applicable √ Inapplicable
Change of the total shares, shareholder structure, asset structure and liability structure
□ Applicable √ Inapplicable
II. Total number of shareholders and their shareholdings
Unit: Share
Total number of preferred share
Total number of common holders who had resumed their
shareholders at the end of the 85,303 voting right at the end of the 0
reporting period reporting period (if any) (see
note 8)
Shareholdings of shareholders holding more than 5% shares or top 10 shareholders
Increase/dec Pledged or frozen
Number of
Sharehol rease of Number of shares
shares held Number of
Nature of ding shares non-restricte
Name of shareholder at the end of restricted Status
shareholder percenta during the d shares Number of
the reporting shares held of
ge (%) reporting held shares
period shares
period
Domestic
Zibo Lucheng Textile Pledge
non-state-owned 14.68% 140,353,583 10,125,694 140,353,583 22,727,200
Investment Co., Ltd. d
corporation
Foreign
Tailun Textile Co., Ltd. 12.37% 118,232,400 0 118,232,400
corporation
DBS VICKERS (HONG Foreign
Foreign
KONG) LTDA/C corporati 36,228,642 -4,300,000 36,228,642
corporation
CLIENTS on
Foreign
LYNAS ASIA FUND 1.82% 17,364,475 1,349,954 17,364,475
corporation
VALUE PARTNERS Foreign
1.72% 16,411,865 3,281,774 16,411,865
HIGH-DIVIDEND corporation
36
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
STOCKS FUNDS
Everbright prudential
measurement of securities Other 1.20% 11,503,549 11,503,549 11,503,549
investment fund
GUOTAI JUNAN
Foreign
SECURITIES(HONGKO 0.91% 8,670,480 8,670,480 8,670,480
corporation
NG) LIMITED
VALUE PARTNERS Foreign
0.85% 8,156,383 1,019,033 8,156,383
CLASSIC FUND corporation
First State Investment
Management (England) Foreign
0.79% 7,563,611 7,563,611 7,563,611
Co., Ltd.－First State corporation
China A share fund
HTHK-MANULIFE Foreign
0.72% 6,858,138 6,858,138 6,858,138
CHINA VALUE FUND corporation
Particulars about strategic investors or
common legal persons who became the top
None
ten shareholders because of the issuance of
additional shares (if any)(Notes 3)
Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder of the
Company and the actual controller. Tailun (Thailand) Textile Co., Ltd. is the second
Explanations about associated relationship or
largest shareholder as well as sponsor of foreign capital of the Company. All of other
concerted action among the above
shareholders are people holding circulating A share or circulating B share and the
shareholders
Company is not able to confirm whether there is associated relationship or concerted
action among other shareholders.
Shareholdings of the top ten shareholders not subject to trading moratorium
Type of shares
Name of shareholders Name of shareholders
Type Amount
RMB common
Zibo Lucheng Textile Investment Co., Ltd. 140,353,583 140,353,583
shares
Domestically
DBS VICKERS (HONG KONG) LTDA/C CLIENTS 36,228,642 listed foreign 36,228,642
shares
Domestically
LYNAS ASIA FUND 17,364,475 listed foreign 17,364,475
shares
Domestically
VALUE PARTNERS HIGH-DIVIDEND STOCKS FUNDS 16,411,865 listed foreign 16,411,865
shares
Everbright prudential measurement of securities investment 11,503,549 RMB common 11,503,549
37
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
fund shares
Domestically
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 8,670,480 listed foreign 8,670,480
shares
Domestically
VALUE PARTNERS CLASSIC FUND 8,156,383 listed foreign 8,156,383
shares
First State Investment Management (England) Co., Ltd.－First RMB common
7,563,611 7,563,611
State China A Share Fund shares
Domestically
HTHK-MANULIFE CHINA VALUE FUND 6,858,138 listed foreign 6,858,138
shares
Pichon Assets Management Co., Ltd.－Pichon China A Share RMB common
5,586,151 5,586,151
Investment Fund shares
Among the above shareholders, except that Lucheng Corporation
Explanation about associated relationship and concerted action
is the largest shareholder of the Company, all of other shareholders
among the top ten shareholders not subject to trading
are people holding circulating A share or circulating B share and
moratorium as well as between the top ten shareholders not
the Company is not able to confirm whether there is associated
subject to trading moratorium and the top ten shareholders
relationship or concerted action among other shareholders.
Particulars about the top 10 shareholders participating in
N/A
margin trading (if any)(Notes 4)
Did any shareholder of the Company carry out an agreed buy-back in the reporting period?
□ Yes √ No
No shareholder of the Company carried out any agreed buy-back in the reporting period.
III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
The controlling shareholder of the Company did not change in the reporting period.
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
The actual controller of the Company did not change in the reporting period.
IV. Any shareholding increase plan proposed or implemented by any shareholder or its
act-in-concert party during the reporting period
√ Applicable □ Inapplicable
38
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Amount of Proportion Actual First disclosure
Actual amount Name of
Name of shareholders/persons planed of planed proportion of date of
of overweight shareholders/persons
acting in concert overweight overweigh overweight overweight
shares acting in concert
shares t shares shares shares plan
Zibo Lucheng Textile Investment
4,386,036 0.46% 18 Jan. 2014
Co., Ltd.
Zibo Lucheng Textile Investment
5,739,658 0.60% 1 Jul. 2014
Co., Ltd.
Notes of other:
1. From 12 Dec. 2013 to 31 Dec. 2013, through Securities Exchange System of Shenzhen Stock Exchange, Zibo
Lucheng Textile Investment Co., Ltd. increased the current A share (000726) of the Company by centralized
competitive trading method, which was of 6,913,189 shares, which were of 0.72% of the total share capital of the
Company. From 1 Jan. 2014 to 17 Jan. 2014, through Securities Exchange System of Shenzhen Stock Exchange,
Zibo Lucheng Textile Investment Co., Ltd. increased the current A share (000726) of the Company by centralized
competitive trading method, which was of 4,386,036 shares. Up to 17 Jan. 2014, through Securities Exchange
System of Shenzhen Stock Exchange, Zibo Lucheng Textile Investment Co., Ltd. accumulatively increased the
current A share (000726) of the Company by centralized competitive trading method, which was of 11,299,225
shares, which were of 1.18% of the total share capital of the Company, and at a shareholding increase average
price of RMB9.99) of the company by centralized trading securities at competing price by security exchange
system of Shenzhen Stock Exchange. After this time of shareholding increase, the company holds totally
134,613,925 shares of the company accounting for 14.03% of totally 955,800,496 shares of the company. For
more details, please refer to the related announcements published on Security Times, Shanghai Security News, Ta
Kung Pao and www.cninfo.com.cn dated Jan. 18, 2014.
2. On 4 Jun. 2014 and 27 Jun. 2014, through Securities Exchange System of Shenzhen Stock Exchange, Zibo
Lucheng Textile Investment Co., Ltd. accumulatively increased the current A share (000726) of the Company by
centralized competitive trading method, which was of 5,739,658 shares that was of 0.60% of the total share capital
of the Company with the average increase price of RMB 8.71 Yuan. After the increase, the total stocks of the
Company were of 140,353,583 shares that covered 14.68% of the total share capital of 955,800,496 shares. For
the specific situation of the event, please refer to the relevant announcements disclosed on Securities Times,
Shanghai Securities News, Ta Kung Pao and www.cninfo.com.cn on 1 Jul. 2014.
39
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Section VII. Preferred Shares
40
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Section VIII. Directors, Supervisors & Senior Management Staff
I. Change of shareholdings of directors, supervisors and senior management staff
√ Applicable □ Inapplicable
Shares Increase of Restricted Restricted
Decrease of Shares Restricted
held at the shares in stock stock
shares in held at the stock
Incumbe beginning this conferred conferred at
Name Title this end of the conferred in
nt or not the reporting at the the
reporting reporting this period
reporting period period-beg period-end(
period period (share)
period (share) in (share) share)
Liu Chairman of the Incumbe
437,295 437,295
Shizhen Board nt
Vice Chairman of Incumbe
Xu Zhinan
the Board nt
Director/General Incumbe
Liu Zibin 148,290 148,290 30,000 30,000
Manager nt
Fujiwara Director/Senior Incumbe
Hidetoshi Consultant nt
Chen Incumbe
Director
Ruimou nt
Zeng Incumbe
Director
Facheng nt
Director/Deputy
Wang general Incumbe
193,238 193,238 30,000 30,000
Fangshui manager/Chief nt
engineer
Director/ Deputy
Qin general manager/ Incumbe
124,452 124,452
Guiling Secretary to the nt
Board
Independent Incumbe
Zhou Zhiji 0 0
director nt
Independent Incumbe
Wang Lei 0 0
director nt
Zhang Independent Incumbe
0 0
Chengzhu director nt
Independent Incumbe
Su Xin 0 0
director nt
41
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Independent Incumbe
Xu Jianjun 0 0
director nt
Zhu Supervisor of the Incumbe
91,638 91,638
Lingwen Board nt
Incumbe
Liu Zilong Supervisor 0 0
nt
Dong Incumbe
Supervisor 5,000 5,000
Shibing nt
Zhang Incumbe
Vice chairman 88,400 88,400 30,000 30,000
Jianxiang nt
Zhang Incumbe
Chief accountant 88,100 88,100 30,000 30,000
Hongmei nt
Li Chairman of the Incumbe
176,164 176,164 30,000 30,000
Tongmin union nt
Assistant of general
Wang manager, manager Incumbe
83,700 83,700 30,000 30,000
Jiabin of production nt
department
Assistant of general
Zhang manager, manager Incumbe
83,100 83,100 30,000 30,000
Shougang of clothing-making nt
department
Assistant of general
Zhang manager, general Incumbe
80,300 80,300 30,000 30,000
Zhanqi manager of Lufeng nt
company
Zhang Incumbe
Financial manager 95,200 95,200 30,000 30,000
Kemin nt
Manager of the
second department Incumbe
Pan Pingli 126,096 126,096 30,000 30,000
of international nt
business
Lu Vice president of Incumbe
77,900 77,900 30,000 30,000
Yongchen Lufeng company nt
Yu Manager of energy Incumbe
83,100 83,100 30,000 30,000
Shouzheng business unit nt
Incumbe
Quan Peng Marketing manager 37,000 37,000 30,000 30,000
nt
Wang Manager of the first Incumbe
30,000 30,000 30,000 30,000
Changzhao department of nt
42
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
international
business
Manager of
Shang
enterprises Incumbe
Chenggan 30,000 30,000 30,000 30,000
management nt
g
department
Sun Independent
Left 0 0
Ruizhe director
Total -- -- 2,078,973 0 0 2,078,973 450,000 0 450,000
II. Change of directors, supervisors and senior management staff
√ Applicable □ Inapplicable
Name Title Type Date Reason
Due to national party and government leading cadres could
Independent
Sun Ruizhe Left 14 Jan. 2014 not act as senior executive of listed companies at the same
director
time
Zhang Independent
Selected 6 May 2014
Chengzhu director
43
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Section IX. Financial Report
I. Audit report
Has this semi-annual report been audited?
□ Yes √ No
The semi-annual financial report has not been audited.
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Luthai Textile Co., Ltd.
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 470,252,156.06 872,461,415.00
Transactional financial assets 29,949,120.00
Notes receivable 106,186,009.75 126,106,380.23
Accounts receivable 190,552,240.18 280,434,879.62
Accounts paid in advance 168,044,120.60 137,003,771.58
Other accounts receivable
Current Assets: 54,466,407.13 68,608,410.00
Redemptory monetary capital for sale
Inventories 1,789,283,199.81 1,645,070,671.31
Non-current assets due within 1 year
Other current assets 24,082,210.10 34,030,201.42
Total current assets 2,802,866,343.63 3,193,664,849.16
Non-current assets:
Long-term equity investment 67,442,600.00 67,442,600.00
Investing property
Fixed assets 4,457,423,173.40 4,454,201,264.50
Construction in progress 298,987,510.15 227,959,833.59
Engineering materials 61,342,832.85 19,094,482.53
44
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Disposal of fixed assets
Intangible assets 350,621,643.00 352,846,664.24
R&D expense
Goodwill 20,613,803.29 20,613,803.29
Long-term deferred expenses 2,104,393.73 1,711,304.99
Deferred income tax assets 55,274,134.46 58,158,023.19
Other non-current assets 12,781,283.00 16,255,736.00
Total of non-current assets 5,326,591,373.88 5,218,283,712.33
Total assets 8,129,457,717.51 8,411,948,561.49
Liabilities and shareholders' equity (or
shareholders’ equity)
Current liabilities: 614,984,887.89 648,664,954.85
Transaction financial liabilities 1,050,030.00
Notes payable 6,618,500.87 10,213,263.69
Account payable 218,808,759.48 400,053,679.69
Account received in advance 95,301,693.23 100,793,054.81
Employee’s compensation payable 297,539,951.39 372,062,834.99
Tax payable 76,546,689.53 115,248,378.73
Interest payable 2,304,412.25 1,499,475.06
Dividend payable 441,966.54 441,966.54
Other account payable 74,577,062.99 84,445,300.34
Non-current liabilities due within 1 year 27,456,730.45 85,356,600.00
Other current liabilities
Total current liabilities 1,415,630,684.62 1,818,779,508.70
Non-current liabilities:
Long-term borrowings 97,521,321.88 97,550,400.00
Bonds payable
Long-term payables 9,735,560.00 9,735,560.00
Specific payables
Accrued liabilities
Deferred tax liabilities 2,077,537.33 6,550,014.57
Other non-current liabilities 66,315,974.89 64,733,100.81
Total non-current liabilities 175,650,394.10 178,569,075.38
Total liabilities 1,591,281,078.72 1,997,348,584.08
Owners’ equity (or shareholders' equity)
45
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Paid-in capital (or share capital) 955,800,496.00 955,800,496.00
Capital reserves 1,005,601,893.97 1,000,854,805.66
Less: Treasury stock
Special reserve
Surplus reserves 659,538,411.25 659,538,411.25
Provisions for general risks
Retained profits 3,493,030,809.63 3,379,354,741.18
Foreign exchange difference -7,497,682.13 -7,494,320.36
Total owners' equity attributable to
6,106,473,928.72 5,988,054,133.73
parent company
Minority interest 431,702,710.07 426,545,843.68
Total owners' equity (or shareholder’s
6,538,176,638.79 6,414,599,977.41
equity)
Total liabilities and owner’ equity (or
8,129,457,717.51 8,411,948,561.49
shareholder’s equity)
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
2. Balance sheet of the Company
Prepared by Luthai Textile Co., Ltd.
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 346,517,528.75 505,709,597.03
Transactional financial assets 25,057,200.00
Notes receivable 84,042,738.01 93,356,553.66
Accounts receivable 205,747,046.75 265,740,714.49
Accounts paid in advance 316,115,831.78 198,115,786.71
Interest receivable
Dividend receivable
Other accounts receivable 28,490,254.86 33,075,155.68
Inventories 1,185,438,218.12 940,892,345.31
Non-current assets due within 1 year
Other current assets 16,052,542.65 3,711,653.08
Total current assets 2,182,404,160.92 2,065,659,005.96
46
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investment
Long-term accounts receivable
Long-term equity investment 1,149,596,928.26 1,101,936,804.88
Investing property
Fixed assets 2,682,312,623.72 2,652,488,993.89
Construction in progress 231,751,822.07 186,973,570.92
Engineering materials 48,287,003.30 9,040,050.06
Disposal of fixed assets
Intangible assets 226,097,015.77 229,829,628.31
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 33,670,818.00 35,041,084.44
Other non-current assets 5,406,401.00 5,406,401.00
Total of non-current assets 4,377,122,612.12 4,220,716,533.50
Total assets 6,559,526,773.04 6,286,375,539.46
Liabilities and shareholders' equity (or
shareholders’ equity)
Current liabilities: 433,262,625.20 88,638,765.21
Transactional financial liabilities 749,130.00
Notes payable 3,035,256.05 5,474,558.65
Accounts payable 223,411,921.31 211,146,523.67
Accounts received in advance 43,193,281.69 38,413,307.22
Employee’s compensation payable 249,320,014.54 303,548,400.40
Tax payable 65,359,953.45 80,282,862.55
Interest payable 2,002,941.27 681,692.31
Dividend payable 441,966.54 441,966.54
Other accounts payable 24,991,018.25 21,956,228.99
Non-current liabilities due within 1 year 27,456,730.45 85,356,600.00
Other current liabilities
Total current liabilities 1,073,224,838.75 835,940,905.54
Non-current liabilities:
Long-term borrowings 97,521,321.88 97,550,400.00
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Bonds payable
Long-term payables
Specific payables
Accrued liabilities
Deferred tax liabilities 3,758,580.00
Other non-current liabilities 30,807,051.49 31,144,621.51
Total non-current liabilities 128,328,373.37 132,453,601.51
Total liabilities 1,201,553,212.12 968,394,507.05
Owners’ equity (or shareholders' equity)
Paid-in capital (or share capital) 955,800,496.00 955,800,496.00
Capital reserves 1,011,954,575.06 1,007,207,486.75
Less: Treasury stock
Special reserve
Surplus reserves 659,538,411.25 659,538,411.25
Provisions for general risks
Retained profits 2,730,680,078.61 2,695,434,638.41
Foreign exchange difference
Total owners' equity attributable to
5,357,973,560.92 5,317,981,032.41
parent company
Total liabilities and owner’ equity (or
6,559,526,773.04 6,286,375,539.46
shareholder’s equity)
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
3. Consolidated income statement
Prepared by Luthai Textile Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Total operating revenues 3,114,226,581.62 3,060,495,255.17
Including: Sales income 3,114,226,581.62 3,060,495,255.17
II. Total operating cost 2,551,640,524.67 2,580,359,544.62
Including: Cost of sales 2,137,850,293.37 2,184,574,937.90
Taxes and associate charges 23,543,589.95 31,735,647.82
Selling and distribution expenses 93,108,145.82 81,811,840.15
Administrative expenses 294,932,674.63 260,822,329.39
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Financial expenses 7,441,307.46 24,336,940.28
Asset impairment loss -5,235,486.56 -2,922,150.92
Add: Gain/(loss) from change in fair value (“-” means
-30,999,150.00 -1,718,481.00
loss)
Gain/(loss) from investment (“-” means loss) 21,278,949.08 17,649,677.42
Including: share of profits in associates and joint ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 552,865,856.03 496,066,906.97
Add: non-operating income 19,826,768.24 18,069,755.20
Less: non-operating expense 3,095,122.00 883,756.29
Including: loss from non-current asset disposal 2,054,591.12 122,406.85
IV. Total profit (“-” means loss) 569,597,502.27 513,252,905.88
Less: Income tax expense 88,060,378.95 83,692,908.10
V. Net profit (“-” means loss) 481,537,123.32 429,559,997.78
Including: Net profit achieved by combined parties
before the combinations
Attributable to owners of the Company 476,880,256.93 416,175,890.38
Minority shareholders’ income 4,656,866.39 13,384,107.40
VI. Earnings per share -- --
(I) Basic earnings per share 0.50 0.43
(II) Diluted earnings per share 0.50 0.43
VII. Other comprehensive incomes -3,361.77 -812,926.81
VIII. Total comprehensive incomes 481,533,761.55 428,747,070.97
Attributable to owners of the Company 476,876,895.16 415,362,963.57
Attributable to minority shareholders 4,656,866.39 13,384,107.40
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
Prepared by Luthai Textile Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Total sales 2,318,199,524.10 2,226,181,431.10
Less: cost of sales 1,597,127,786.85 1,593,126,834.70
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Business taxes and surcharges 18,087,930.63 23,196,502.34
Distribution expenses 42,177,311.93 33,022,564.41
Administrative expenses 207,830,441.84 182,197,539.18
Financial costs -4,724,701.39 6,613,338.83
Assets impairment loss -1,149,272.05 -504,581.85
Add: gain/(loss) from change in fair value (“-” means
-25,806,330.00 -6,059,541.00
loss)
Gain/(loss) from investment (“-” means loss) 18,121,509.04 17,735,127.42
Including: income form investment on associates and
joint ventures
II. Business profit (“-” means loss) 451,165,205.33 400,204,819.91
Add: non-business income 16,288,206.88 7,511,109.35
Less: non-business expense 2,695,250.29 629,353.82
Including: loss from non-current asset disposal 2,052,914.51 87,979.38
III. Total profit (“-” means loss) 464,758,161.92 407,086,575.44
Less: income tax expense 66,308,533.24 61,976,980.38
IV. Net profit (“-” means loss) 398,449,628.68 345,109,595.06
V. Earnings per share -- --
(I) Basic earnings per share 0.42 0.36
(II) Diluted earnings per share 0.42 0.36
VI. Other comprehensive income
VII. Total comprehensive income 398,449,628.68 345,109,595.06
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
5. Consolidated cash flow statement
Prepared by Luthai Textile Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 3,568,438,894.82 3,076,042,410.46
Tax refunds received 97,652,110.13 65,178,033.83
Other cash received relating to operating activities 34,150,812.11 30,348,137.90
Subtotal of cash inflows from operating activities 3,700,241,817.06 3,171,568,582.19
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Cash paid for goods and services 2,273,582,667.90 1,814,828,290.33
Cash paid to and for employees 694,142,394.03 606,961,463.74
Various taxes paid 197,273,969.71 138,126,952.15
Other cash payment relating to operating activities 136,200,221.55 120,904,955.80
Subtotal of cash outflows from operating activities 3,301,199,253.19 2,680,821,662.02
Net cash flows from operating activities 399,042,563.87 490,746,920.17
II. Cash flows from investing activities:
Cash received from withdrawal of investments
Cash received from return on investments 120,000.00
Net cash received from disposal of fixed assets, intangible assets
7,702,214.30 4,209,366.77
and other long-term assets
Net cash received from disposal of subsidiaries or other business
units
Other cash received relating to investing activities 25,956,477.08 20,837,332.08
Subtotal of cash inflows from investing activities 33,778,691.38 25,046,698.85
Cash paid to acquire fixed assets, intangible assets and other
370,150,102.18 219,615,586.74
long-term assets
Cash paid to investment
Net accrual of pledge loan
Net cash paid to acquire subsidiaries and other business units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities 370,150,102.18 219,615,586.74
Net cash flows from investing activities -336,371,410.80 -194,568,887.89
III. Cash Flows from Financing Activities:
Cash received from capital contributions 500,000.00
Including: Cash received from minority shareholder investments
by subsidiaries
Cash received from borrowings 532,825,398.05 467,174,038.12
Cash received from issuance of bonds
Other cash received relating to financing activities 12,000,000.00 130,360,586.78
Subtotal of cash inflows from financing activities 545,325,398.05 597,534,624.90
Repayment of borrowings 627,477,883.01 792,551,770.03
Cash paid for interest expenses and distribution of dividends or
374,793,800.40 274,802,528.90
profit
Including: dividends or profit paid by subsidiaries to minority
shareholders
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Other cash payments relating to financing activities 37,829,195.86 193,972,143.65
Sub-total of cash outflows from financing activities 1,040,100,879.27 1,261,326,442.58
Net cash flows from financing activities -494,775,481.22 -663,791,817.68
IV. Effect of foreign exchange rate changes on cash and cash
4,500,943.46 -1,682,634.91
equivalents
V. Net increase in cash and cash equivalents -427,603,384.69 -369,296,420.31
Add: Opening balance of cash and cash equivalents 869,909,505.89 900,182,215.72
VI. Closing balance of cash and cash equivalents 442,306,121.20 530,885,795.41
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
6. Cash flow statement of the Company
Prepared by Luthai Textile Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 2,383,169,213.86 2,244,250,614.20
Tax refunds received 73,631,880.88 32,806,344.91
Other cash received relating to operating activities 16,447,073.61 9,511,371.95
Subtotal of cash inflows from operating activities 2,473,248,168.35 2,286,568,331.06
Cash paid for goods and services 1,561,524,048.28 1,340,624,657.94
Cash paid to and for employees 514,917,192.50 457,184,019.46
Various taxes paid 109,178,916.64 74,503,362.27
Other cash payment relating to operating activities 75,754,434.35 60,464,105.86
Subtotal of cash outflows from operating activities 2,261,374,591.77 1,932,776,145.53
Net cash flows from operating activities 211,873,576.58 353,792,185.53
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
7,701,414.30 4,209,366.77
and other long-term assets
Net cash received from disposal of subsidiaries or other business
units
Other cash received relating to investing activities 22,068,024.08 20,079,492.10
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Subtotal of cash inflows from investing activities 29,769,438.38 24,288,858.87
Cash paid to acquire fixed assets, intangible assets and other
276,799,324.68 143,851,952.85
long-term assets
Cash paid for investment 46,904,386.53
Net cash paid to acquire subsidiaries and other business units
Other cash payments relating to investing activities 1,100,000.00
Subtotal of cash outflows from investing activities 323,703,711.21 144,951,952.85
Net cash flows from investing activities -293,934,272.83 -120,663,093.98
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Cash received from borrowings 385,959,946.25 292,858,376.63
Cash received from shares issued
Other cash received relating to financing activities 35,410,586.78
Subtotal of cash inflows from financing activities 385,959,946.25 328,268,963.41
Repayment of borrowings 100,813,799.73 407,197,239.85
Cash paid for interest expenses and distribution of dividends or
366,017,598.04 260,148,657.86
profit
Other cash payments relating to financing activities 25,829,195.86 140,072,143.65
Sub-total of cash outflows from financing activities 492,660,593.63 807,418,041.36
Net cash flows from financing activities -106,700,647.38 -479,149,077.95
IV. Effect of foreign exchange rate changes on cash and cash
4,175,149.60 -9,570.27
equivalents
V. Net increase in cash and cash equivalents -184,586,194.03 -246,029,556.67
Add: Opening balance of cash and cash equivalents 503,157,687.92 559,095,505.76
VI. Closing balance of cash and cash equivalents 318,571,493.89 313,065,949.09
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
7. Consolidated statement of changes in owners’ equity
Prepared by Luthai Textile Co., Ltd.
Jan.-Jun. 2014
Unit: RMB Yuan
Reporting period
Equity attributable to owners of the Company
Minority
Paid-up Total owners’ equity
Item Less: Less: interests
Paid-up capital capital Paid-up capital (or Capital Paid-up capital (or
Capital reserve treasury Capital reserve treasury Less: treasury
(or share capital) (or share share capital) reserve share capital)
stock stock stock
capital)
I. Balance at the end of the
955,800,496.00 1,000,854,805.66 659,538,411.25 3,379,354,741.18 -7,494,320.36 426,545,843.68 6,414,599,977.41
previous year
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of
955,800,496.00 1,000,854,805.66 659,538,411.25 3,379,354,741.18 -7,494,320.36 426,545,843.68 6,414,599,977.41
the year
III. Increase/ decrease of
amount in the year (“-” means 4,747,088.31 113,676,068.45 -3,361.77 5,156,866.39 123,576,661.38
decrease)
(I) Net profit 476,880,256.93 4,656,866.39 481,537,123.32
(II) Other comprehensive
-3,361.77 -3,361.77
incomes
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Subtotal of (I) and (II) 476,880,256.93 -3,361.77 4,656,866.39 481,533,761.55
(III) Capital paid in and
4,747,088.31 500,000.00 5,247,088.31
reduced by owners
1. Capital paid in by
500,000.00 500,000.00
owners
2. Amounts of share-based
payments recognized in 4,747,007.52 4,747,007.52
owners’ equity
3. Others 80.79 80.79
(IV) Profit distribution -363,204,188.48 -363,204,188.48
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to
-363,204,188.48 -363,204,188.48
owners (or shareholders)
4. Other
(V) Internal carry-forward of
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
55
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
making up losses
4. Other
(VI) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(VII) Other
IV. Closing balance 955,800,496.00 1,005,601,893.97 659,538,411.25 3,493,030,809.63 -7,497,682.13 431,702,710.07 6,538,176,638.79
Jan.-Jun. 2013
Unit: RMB Yuan
Last year
Equity attributable to owners of the Company
Minority
Paid-up Total owners’ equity
Item interests
Less: Less:
Paid-up capital capital Paid-up capital (or Capital Paid-up capital (or
Capital reserve treasury Capital reserve treasury Less: treasury
(or share capital) (or share share capital) reserve share capital)
stock stock stock
capital)
I. Balance at the end of the 272,794,
1,008,894,800.00 1,230,191,471.42 579,274,370.26 2,729,178,150.40 -6,043,037.30 385,990,761.55 5,654,692,019.81
previous year 496.52
Add: retrospective
adjustments due to business
combinations under the same
control
Add: change of accounting
policy
Correction of errors in
previous periods
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Other
II. Balance at the beginning of 272,794,
1,008,894,800.00 1,230,191,471.42 579,274,370.26 2,729,178,150.40 -6,043,037.30 385,990,761.55 5,654,692,019.81
the year 496.52
III. Increase/ decrease of
-272,794
amount in the year (“-” means -53,094,304.00 -229,336,665.76 80,264,040.99 650,176,590.78 -1,451,283.06 40,555,082.13 759,907,957.60
,496.52
decrease)
(I) Net profit 999,256,730.65 40,555,082.13 1,039,811,812.78
(II) Other comprehensive
-1,451,283.06 -1,451,283.06
incomes
Subtotal of (I) and (II) 999,256,730.65 -1,451,283.06 40,555,082.13 1,038,360,529.72
(III) Capital paid in and -272,794
-53,094,304.00 -229,336,665.76 -9,636,473.24
reduced by owners ,496.52
1. Capital paid in by -272,794
-53,094,304.00 -239,908,057.52 -20,207,865.00
owners ,496.52
2. Amounts of share-based
payments recognized in 9,347,988.30 9,347,988.30
owners’ equity
3. Others 1,223,403.46 1,223,403.46
(IV) Profit distribution 80,264,040.99 -349,080,139.87 -268,816,098.88
1. Appropriations to
80,264,040.99 -80,264,040.99
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to
-268,816,098.88 -268,816,098.88
owners (or shareholders)
4. Other
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
(V) Internal carry-forward of
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
IV. Closing balance 955,800,496.00 1,000,854,805.66 659,538,411.25 3,379,354,741.18 -7,494,320.36 426,545,843.68 6,414,599,977.41
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei Chief of the accounting division: Zhang Keming
8. Statement of changes in owners’ equity of the Company
Prepared by Luthai Textile Co., Ltd.
Jan.-Jun. 2014
Unit: RMB Yuan
Reporting period
Item
Paid-up capital (or Capital reserve Less: Specific Surplus reserve General risk Retained profit Total owners’ equity
58
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
share capital) treasury reserve reserve
stock
I. Balance at the end of the previous year 955,800,496.00 1,007,207,486.75 659,538,411.25 2,695,434,638.41 5,317,981,032.41
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 955,800,496.00 1,007,207,486.75 659,538,411.25 2,695,434,638.41 5,317,981,032.41
III. Increase/ decrease of amount in the year
4,747,088.31 35,245,440.20 39,992,528.51
(“-” means decrease)
(I) Net profit 398,449,628.68 398,449,628.68
(II) Other comprehensive incomes
Subtotal of (I) and (II) 398,449,628.68 398,449,628.68
(III) Capital paid in and reduced by owners 4,747,088.31 4,747,088.31
1. Capital paid in by owners
2. Amounts of share-based payments
4,747,007.52 4,747,007.52
recognized in owners’ equity
3. Others 80.79 80.79
(IV) Profit distribution -363,204,188.48 -363,204,188.48
1. Appropriations to surplus reserves
2. Appropriations to general risk
provisions
3. Appropriations to owners (or
-363,204,188.48 -363,204,188.48
shareholders)
4. Other
(V) Internal carry-forward of owners’ equity
59
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
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
IV. Closing balance 955,800,496.00 1,011,954,575.06 659,538,411.25 2,730,680,078.61 5,357,973,560.92
Jan.-Jun. 2013
Unit: RMB Yuan
Last year
Item Paid-up capital (or Less: treasury Specific General risk
Capital reserve Surplus reserve Retained profit Total owners’ equity
share capital) stock reserve reserve
I. Balance at the end of the previous year 1,008,894,800.00 1,236,544,152.51 272,794,496.52 579,274,370.26 2,241,874,368.40 4,793,793,194.65
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 1,008,894,800.00 1,236,544,152.51 272,794,496.52 579,274,370.26 2,241,874,368.40 4,793,793,194.65
III. Increase/ decrease of amount in the year
-53,094,304.00 -229,336,665.76 -272,794,496.52 80,264,040.99 453,560,270.01 524,187,837.76
(“-” means decrease)
(I) Net profit 802,640,409.88 802,640,409.88
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
(II) Other comprehensive incomes
Subtotal of (I) and (II) 802,640,409.88 802,640,409.88
(III) Capital paid in and reduced by
-53,094,304.00 -229,336,665.76 -272,794,496.52 -9,636,473.24
owners
1. Capital paid in by owners -53,094,304.00 -239,908,057.52 -272,794,496.52 -20,207,865.00
2. Amounts of share-based payments
9,347,988.30 9,347,988.30
recognized in owners’ equity
3. Others 1,223,403.46 1,223,403.46
(IV) Profit distribution 80,264,040.99 -349,080,139.87 -268,816,098.88
1. Appropriations to surplus reserves 80,264,040.99 -80,264,040.99
2. Appropriations to general risk
provisions
3. Appropriations to owners (or
-268,816,098.88 -268,816,098.88
shareholders)
4. Other
(V) Internal carry-forward of 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
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
1. Withdrawn for the period
2. Used in the period
(VII) Other
IV. Closing balance 955,800,496.00 1,007,207,486.75 659,538,411.25 2,695,434,638.41 5,317,981,032.41
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei Chief of the accounting division: Zhang Keming
62
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
III. Company Profile
Luthai 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 25 Dec. 2003, the inner employees’ shares reach 3 years since listing
on the A-share stock market, and they set out circulation on 26, Dec. 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 Luthai 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 15 th Session of the 6th Board of
Directors, the Opinion of China Securities Regulatory Commission on the Restricted Share Incentive Plan of Luthai 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. According to the Company’s resolution of the Twenty-Third
Session of the Sixth Board of Directors "On the Cancellation of Part of the Repurchase which not Meet With the Conditions of the
Original Incentives were Granted Restricted Stock Incentive Target Motion" on 13, Aug. 2012, the Company had made shares
repurchased and canceled of the original incentive targets which not met with the conditions of incentives, with the total amount of
60,000.00 awarded shares. According to the second temporary resolution of Proposal on counter purchase of part of
the domestic listed foreign share (B share) on 25 Jun. 2012, the Company counter purchase domestic listed
foreign share (B share) 48,837,300 shares. According to the Proposal on Repurchase and Cancel Part of Unlocked
Restricted Share of the Original Incentive Personnel not Conforming to the Incentive Condition, Proposal on
Repurchase and Cancel unlocked Restricted Share in Second Unlocked Period of all the Incentive Personnel
reviewed and approved by the 26th meeting of 6th session of the board of the directors on 27 Mar. 2013, the
Company repurchase and cancel 4,257,000 shares owned by original people whom to motivate，as of 31 Dec. 2013
the register capital of the Company was RMB 955,800,500.
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
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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
11 Aug. 2014.
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 Group 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 presenting the Company’s and the
Group’s financial positions as at 30 Jun. 2014, and operating results, cash flows and other relevant information in
Jan.-Jan. 2014. 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.
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
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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, 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. 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,
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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 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 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
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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 “Long-term Equity Investment” or “Financial Instruments”.
(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 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
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
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 instrument refers to a contract on forming the financial assets of an enterprise and forming the financial
liabilities or equity instruments of other units. Financial instruments include financial assets and financial
liabilities as well as equity instruments.
(1) Classification of financial assets
Financial instruments are classified as the financial assets and liabilities.
(2) Recognition basis and measurements for financial instruments
1. Classification, recognition and measurement 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 amount.
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
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
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 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.
The period-end cost of the investment of available for sale debt instruments is measured according to amortized
cost method, that is the amount of initially recognized amount deducting the principal repaid, pulsing or
subtracting the accumulative amortization amount of amortization formed by the difference between the amount
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
initially recognized amount and maturity date, and deducting the impairment losses occurred. The period-end cost
of the investment of available for sale debt instruments is its initial cost acquired.
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.
2. Classification and measurement of financial liabilities
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.
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. 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 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
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
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.
In respect of the assets using recourse to sell or using endorsement to transfer, the Group needs to determine
whether almost all of the risks and rewards of the financial asset ownership are transferred. If almost all of the
risks and rewards of the financial asset ownership had been transferred to the transferee, derecognize the financial
assets. For almost all of the risks and rewards of the financial asset ownership retained, do not end to recognize
the financial assets. For which neither transfer or retain almost all of the risks and rewards of the financial asset
ownership, continuously judge whether the Company retain the control of the assets, and conduct accounting
treatment according to the principle of mentioned in the previous paragraphs.
(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
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) Impairment test method and withdrawal method of impairment provision for financial assets
(excluding accounts receivable)
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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
When there are comprehensive relevant factors showing that the fair value of the available-for-sale equity
instrument investment drops significantly or not contemporarily. Of which “significant drop” refers to the fair
value drops over 20% accumulatively; while the “non-temporary drop” refers to the fair value continues to drop
over 12 months.
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 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.
10. Recognition criteria and withdrawal methods for bad debts provision of accounts receivable
The Group shall test the carrying amount of receivables on the balance sheet date. Where there is any objective
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
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 have a great probability of bankruptcy or other financial reorganization;
④ other objective evidence proving such accounts receivable has been impaired;
If there is any objective evidence that the value of accounts receivable had recovered, and objectively related to
the confirmation of the matters after the loss occurred. Turn back the original recognized impairment of loss,
recorded in the profits and losses for the current period. However, the book value of turning back shall no more
than the amortized cost of accounts receivables on the date of turning back under the assumption of no provision
for impairment loss.
(1) Bad debt provision for individually significant accounts receivable
Judgement basis or monetary standards of
The Group recognized the receivables with amount above RMB 5 million as receivables
provision for bad debts of the individually
with significant single amounts.
significant accounts receivable
The Group made an independent impairment test on receivables with significant single
Method of individual provision for bad amount; the financial assets without impairment by independent impairment test should
debts of the individually significant be included in financial assets portfolio with similar credit risk to take the impairment
accounts receivable 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 bad debt provision
Name of group Recognition basis of group
on the group basis
Aging group Aging analysis method Have same aging
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □Inapplicable
Withdrawal proportion for accounts Withdrawal proportion for other
Name of group
receivable accounts receivable
Within 1 year (including 1 year, the same
5.00% 5.00%
below)
1-2 years 10.00% 10.00%
2-3 years 20.00% 20.00%
Over 3 years 30.00% 30.00%
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
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(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made
individually
Reason of individually There is objective evidence shows that the accounts receivable has been impaired, such as
withdrawing bad debt receivables exist dispute with the other parties or involving lawsuit and arbitration; receivables exist
provision: obvious indication showing that the debtors are likely to fail to perform the duty of repayment, etc.
The Group conducted individual impairment test for the accounts receivable with insignificant
individual amount but with the above characteristics. If any objective evidence shows that the
Withdrawal method for bad
accounts receivable has been impaired, impairment loss shall be recognized on the basis of the gap
debt provision:
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
Pricing method: weighted average method
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 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
propose 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:
Inventory system for inventories: Perpetual inventory system
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods
Amortization method: one-off amortization method
Packing articles
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Amortization 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 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
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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 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
recognizing 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.
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(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 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. 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 and annual depreciation rate of each fixed
assets are as below:
Expected net salvage
Category of fixed assets Useful life (Y) Annual deprecation
value (%)
Housing and building 5-30 5-10 3.00-19.00
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Machinery equipments 10-18 5-10 5.00-9.50
Transportation vehicle 5 5-10 19.00-18.00
Electronic equipments and others 5 5-10 19.00-18.00
Net Salvage is refer to the assumption of fix assets estimated service life is full and is in the estimated state that
the service life is in the end, the Group. The group currently obtained amount from the disposal amount after
deducting the estimated disposal expense.
(4) Testing method of impairment and withdrawal method of provision for impairment on fixed assets
For details about the testing method of impairment and withdrawal method of provision for impairment on fixed
assets, please refer to the content of “Impairment of intangible assets” in the report.
(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.
14. 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 details about the impairment test method and withdrawal method for impairment provision of construction in
process, please refer to the content of “Impairment of intangible assets”.
15. 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. 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.
(2) Capitalization period of borrowing costs
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
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activities which are necessary to prepare the asset for its intended use or sale have already started;
(3) Period for ceasing capitalization of borrowing costs
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. 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 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.
16. 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
Intangible assets with finite service life，since it is available for use, Averagely amortized by stages the original
cost minus the estimated net salvage and the accumulative amount of the impairment loss using the straight-line
method, Intangible assets with uncertain service life shall not be amortized. 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
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amortized in accordance with the amortization policies for intangible assets with finite service life.
Item Estimate service life Judgment
(3) 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.
(4) 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.
(5) 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.
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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.
17. 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.
18. Share-based payment and equity instruments
(1) Categories of share-based payment
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. The
share-based payments shall consist of equity-settled share-based payments and cash-settled share-based payments.
① Equity-settled share-based payments
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
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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,
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 meets them during the vesting period, which will be treated
as the cancel of granted equity instrument by the Group.
19. Repurchase of shares of the Company
It shall reduce the owners’ equity in light of the consideration and trading expenses arising from the repurchase of
shares of the Company; and it shall not recognize the gains or losses while repurchasing, transferring or canceling
the shares of the Company. As for transfer of treasury stocks, it shall record the capital reserves with the balance
between the actual received amount and the carrying amount of the treasury stock, if the capital reserves are
insufficient to offset, it shall offset the surplus reserves and retained profits. As for cancellation of treasury stocks,
it shall reduce the share capital with the par value of stocks and cancelled amount of shares, and offset the capital
reserves with the balance between the book balance and par value of the cancelled treasury stocks, if the capital
reserves are insufficient to offset, it shall offset the surplus reserves and retained profits.
20. Revenue
(1) Criteria for recognition time of 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
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measured in a reliable way.
(2) Recognition basis of royalty revenue
1) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenue
on accrual basis.
2) Interest revenue
It is decided by the time of others using the Group’s funds and the actual interest rate.
(3) Recognition basis for revenue from providing labor services
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 not be measured respectively, both parts shall be conducted as selling
goods.
(4) Judge and method to recognize the completion of contract according to the revenue from providing
services and construction contract employing the percentage-of-completion method
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.
21. 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.
The Group defines the acquisition of government subsidy of long term assets using in construction or formed in
other ways as government subsidiary related to income. If the government document not clearly regulate the
subsidy acquirees then adopt the following method to divide the government subsidy into government subsidy
related to income and government subsidy related to assets; (1) If the government document clearly regulate the
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
specific project, according to the budget project will form the spending amount of assets and the cost included of
spending amount ratio to divide, and division ratio shall be reexamine in every balance sheet date, renew if
necessary. (2) the usage in government documents is for general description only, for which do not identify a
particular project, consider as government subsidy related to income.
(2) Accounting policy
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 Company usually recognizes and calculates the government subsidy according to the actual amount received.
But for the estimated financial support fund with convincing evidence that is in accordance with relevant
conditions prescribed by the financial support policy, calculate by account receivable. The government subsidy
measured by account receivable shall confirm to the following conditions: (1) the amount of subsidy receivable
has been confirm by the public document issued by the government sector, or reasonable measure according to
related requirement of Measures for the Management of Fiscal Funds formal released, and there is no significant
uncertainty and expects its amount; (2) shall according to the public financial support project and its measures for
the management of fiscal funds actively public stipulated by the Regulations on Open Government Information
officially launched by the local financial department, and the measure shall be inclusive (any enterprise confirm to
the condition can apply), not specific to a particular enterprise ; (3) the related subsidy approval has a clear
commitment of the allocate time limited, and the amount allocated is guaranteed by corresponding budget that
reasonably ensure it can be receive in the prescribed time limit; (4) According to the group and specific
circumstances of the subsidies matters, it shall meet other related conditions ( if any).
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.
22. 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
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
assets and liabilities arising from the transaction which is not business combination, 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.
(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.
23. 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
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
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
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.
24. Changes in main accounting policies and estimates
Were the main accounting policies or estimates changed during the report period?
□Yes √No
Naught
(1) Changes of main accounting policies
□Yes √No
(2) Change of accounting estimates
Were the main accounting estimates changed during the report period?
□Yes √No
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
VAT paid the VAT by the amount after deducting the deductible 17%、13%
withholding VAT at current period.
Business tax Paid by 3%, 5% of taxable business income 3%、5%
Urban maintenance and Paid at 7%, 5%, 1% of the circulating tax actually paid 7%、5%、1%
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
construction tax
Enterprise income tax Paid at 15%, 16.5%, 25% of taxable income respectively 9%、15%、16.5%、25%
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 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 controlled 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%.
According to the “Announcement of the State Administration of Taxation on Issues of Enterprise Income Tax
Concerning In-depth Implementation of the Western Development Strategy” (SAT [2012] No. 12), as well as the
“Circular of Xinjiang Uygur Autonomous Region on Tax Policies Concerning Acceleration of the Development of
the Textile Industry” (XZF [2010] No. 99), Xinjiang Lu Thai Textile Co., Ltd. (“Xinjiang Lu Thai Textile”), a
wholly-funded subsidiary of the Company’s controlled subsidiary Xinjiang Lu Thai Fengshou Cotton Co., Ltd.
(“Xinjiang Lu Thai”), enjoys a preferential enterprise income tax rate of 15% as an enterprise under the Western
Development Strategy. And the local enjoyable tax is exempted for five years, i.e. a preferential enterprise income
tax rate of 9% for the five years.
Wholly owned subsidiary Luthai (Cambodia) Co., Ltd. (hereinafter referred to as “Luthai (Cambodia)”), which
founded through the approval of Cambodia Investment Committee (hereinafter referred as CDC), and according
to the profits tax free approval issued by CDC, Luthai (Cambodia) enjoyed tax preference that exempted from
enterprise income tax with 3 (3 years start-up period) + 3 (3 years exemption period) +1 (1 year grace period), if
gained profits during the 3 years start-up period, the profits should transferred into 3 years exemption period.
Corporate tax rate after the grace period was 20%.
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
VI. Business combination and consolidated financial statement
1. Subsidiaries
(1) Subsidiaries obtained by establishment and investment
Unit: RMB Yuan
Incl
uded Balance of parent company’s
The The
in equity after deducting the
Busine Register Actual amount Other proporti proporti Deductible
Register cons difference that loss of
Subsidiaries Type ss ed Business scope of investments essential on of on of Minority interest minority
ed place olida minority interests exceed
nature capital at the period-end investment holding voting interests
ted equity obtained by minority
share） rights
state shareholders
ment
Beijing Lufeng
Wholl Whole Wholesale of
Sunshine
y-own sale clothing and
Garment Co.,
ed and 15,000,0 commodity;
Ltd. (hereinafter Beijing 15,000,000.00 100.00% 100.00% Yes
subsidi retail 00 costume designing;
refer to as
ary industr service of
“Lufeng
y technology diffusion
Sunshine”)
Beijing
Whole Design and
Innovative
Holdin sale manufacturing of
Garment Co.,
g and 42,000,0 clothing, adornment,
Ltd. (hereinafter Beijing 25,200,000.00 60.00% 60.00% Yes -12,191,172.27
subsidi retail 00 fabric and
refer to as
ary industr trimmings; sale of
“Beijing
y self-made products
Innovative”)
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Whole
Wholl Import & export
sale
y-own trade, collection of
Luthai (Hong Hong and HKD
ed market information, 6,366,600.00 100.00% 100.00% Yes
Kong) Kong retail 6000000
subsidi information
industr
ary consultation
y
Shanghai Luthai Whole
Wholl Design, technology
Textile Co., Ltd. sale
y-own R&D of textile
(hereinafter Shangha and
ed 5000000 and garment; 5,000,000.00 100.00% 100.00% Yes
refer to as i retail
subsidi wholesale of textile
“Shanghai industr
ary and garment
Luthai”) y
Purchase,
processing and sale
of cotton and
cotton-by products;
production and sales
of conventional seed
Holdin
of crops; foreign
g Manuf
200,725, trade, production
Xinjiang Luthai subsidi Xinjiang acturin 117,342,316.95 59.92% 59.92% Yes 173,303,467.64
050.55 and sale of cotton
ary g
textile products;
processing and sale
of edible vegetable
oil; wholesale and
retail of agricultural
materials; crops
planting
Lufeng Weaving Holdin Zibo Manuf 706,160, Production and sale 529,620,000.00 75.00% 75.00% Yes 270,101,792.12
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
& Dyeing Co., g acturin 000 of textile and
Ltd. (hereinafter subsidi g printing and dyeing
refer to as ary products; wholesale
“Lufeng and retail of yarn,
Weaving & clothing and
Dyeing”) adornment
Zibo Luqun
Wholl Production and sale
Textile Co., Ltd.
y-own Manuf of cotton polyester
(hereinafter 168,220,
ed Zibo acturin yarn, weaving, 171,784,550.00 100.00% 100.00% Yes
refer to as 000
subsidi g clothing, adornment
“Luqun
ary and textile
Textile”)
Zibo Xinsheng Power supply,
Wholl
Power Co., Ltd. power generation,
y-own Manuf
(hereinafter 162,435, production and sale
ed Zibo acturin 176,340,737.93 100.00% 100.00% Yes
refer to as 600.00 of hollow brick and
subsidi g
“Xinsheng cement block for
ary
Power”) architecture
Wholl
y-own
ed
subsidi
ary of Manuf Production and sales
Xinjiang Luthai 50,000,0
the Xinjiang acturin of cotton yarn and 50,000,000.00 59.92% 59.92% Yes
Textile 00
holdin g cotton textile
g
subsidi
ary of
the
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Comp
any
Wholl
y-own Manuf USD Design, production,
Luthai Cambod
ed acturin 2,000,00 export sales of 40,717,203.38 100.00% 100.00% Yes
(Cambodia) ia
subsidi g 0 garment
ary
Works such as
market research
about poplin dyed
fabric, piece dyed
fabrics and shirts in
Whole USA market and
Luthai Textile Wholl
sale Canada market,
(USA) Co., Ltd. y-own USD
and development and
(hereinafter ed USD 1,000,00 2,442,920.00 100.00% 100.00% Yes
retail promotion of new
referred to as subsidi 0
industr products,
“Luthai (USA)”) ary
y exploitation of new
clients, sales of
products and
maintenance of
client relationship,
independent trading.
Beijing Luthai Whole Wholesale of
Holdin
Youxian sale garments, shoes and
g
E-commerce and 1,00000 hats, knitwear,
subsidi Beijing 4,500,000.00 90.00% 90.00% Yes 488,622.58
Co., Ltd. retail 00 leatherwear, down
ary
(hereinafter industr and feather products
referred to y and bags.
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
“Luthai
Youxian”)
(2) Subsidiaries obtained by business combination not under same control
Unit: RMB Yuan
The Include
Actual Balance of parent company’s equity
The proporti d in Min
Regist Busine Register amount of Other Deductible after deducting the difference that
proportion on of consoli ority
Subsidiaries Type ered ss ed Business scope investments essential minority loss of minority interests exceed
of holding voting dated inter
place nature capital at the investment interests equity obtained by minority
shares（%） rights statem est
period-end shareholders
（%） ent
Wholly- Development, promotion
funded and sale of energy-saving
Zibo Helijie
subsidiar technologies and
Energy Saving
y of the products; consulting
Technology &
wholly-f Servic 5000000 service of energy 10,050,000. 100.00
Services Co., Zibo 100.00% Yes
unded e .00 management; contractual 00 %
Ltd. (hereinafter
subsidiar energy management
referred to as
y of the service; and development
“Helijie”)
Compan and sale of computer
y software and hardware
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
2. Explanations on changes of consolidation scope
Explanation on changes in consolidated scope
There were three controlled subsidiaries included into the consolidation scope, of which Luthai (USA) Co., Ltd. and Luthai
(Cambodia) Co., Ltd. were wholly owned subsidiaries, and Beijing Luthai Youxian E-commerce Co., Ltd., which was invested and
founded with Beijing Bishibo E-commerce Consulting Co., Ltd., was controlled subsidiary which held 90% of the shares.
√ Applicable □ Inapplicable
Comparing to last year, this year increased 3 consolidation units, because
On 7 Aug. 2013, the Company held the 3 rd Session of the 7th Board of Directors, which reviewed and approved the proposal on
investing and founding Luthai (USA) Co., Ltd., which was of 100% of the investment; On 2 Dec. 2013, the Company held the 6th
Session of the 7th Board of Directors, which reviewed and approved the proposal on investing and founding Luthai (Cambodia) Co.,
Ltd., which was of 100% of the investment; On 15 May 2014, the Company held the 10th Session of the 7th Board of Directors, which
reviewed and approved the proposal on jointly setting up Beijing Luthai Youxian E-commerce Co., Ltd. with Beijing Bishibo
E-commerce Consulting Co., Ltd., which was of 90% of the investment.
3. Subsidiaries that newly 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
Luthai (USA) Co., Ltd. 1,011,826.55 -1,442,957.16
Luthai (Cambodia) Co., Ltd. 40,757,631.63 -1,225,136.69
Luthai Youxian E-commerce Co., Ltd. 4,886,225.77 -113,774.23
4. Exchange rates of major items in financial statements for foreign entities
Item Items of assets and liabilities
30 Jun. 2014 1 Jan. 2014
Luthai (HK) HK $ 1 = RMB 0.7938 Yuan HK $ 1 = RMB 0.7862 Yuan
Luthai (Cambodia), Luthai USD $ 1 = RMB 6.1528 Yuan
(USA)
Item Items of income, expense and cash flow
Jan.-Jun. 2014 Jan.-Jun. 2013
Luthai (HK) HK $ 1 = RMB 0.7902 Yuan HK $ 1 = RMB 0.8040 Yuan
Luthai (Cambodia), Luthai USD $ 1 = RMB 6.1259 Yuan
(USA)
Unless indicated particularly, in the following annotations (including major items in consolidated financial statements of the
Company), the opening referred to 1 Jan. 2014, the closing referred to 30 Jun. The last period referred to Jan.-Jun. of 2013 and the
reporting period referred to Jan.-Jun. 2014.
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
VII.Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
Closing balance Opening balance
Item Amount in Exchange Amount in Exchange
Amount in RMB Amount in RMB
foreign currency rate foreign currency rate
Cash: -- -- 1,201,474.37 -- -- 1,205,603.58
-RMB -- -- 823,199.30 -- -- 1,085,429.27
-USD 44,025.98 6.1528 270,883.06 8,403.86 6.0969 51,237.50
-EUR 7,226.47 8.3946 60,663.31 1,379.13 8.4189 11,610.75
-JPY 95,638.00 0.0608 5,814.80 4,638.00 0.0578 268.08
-HKD 4,204.44 0.7938 3,337.49 3,780.44 0.7862 2,972.18
-THP 120.19 0.1915 23.02 120.19 0.1849 22.22
-SGD 91.90 4.9744 457.15 91.90 4.7845 439.70
-GBP 1,859.36 10.4978 19,519.19 3,809.36 10.0556 38,305.40
-AUD 2,821.03 5.8064 16,380.03 2,821.03 5.4301 15,318.48
-SF 50.00 6.9738 348.69
-SEK 920.00 0.9221 848.33
Bank deposit: -- -- 395,987,247.74 -- -- 806,000,856.42
-RMB -- -- 149,387,754.66 -- -- 431,695,714.24
-USD 37,308,883.71 6.1528 229,554,099.72 58,924,809.65 6.0969 359,258,671.96
-EUR 8,391.65 8.3946 70,444.53 323,936.42 8.4189 2,727,188.32
-JPY 33,804.00 0.0608 2,055.28 15,639,266.00 0.0578 903,949.58
-HKD 21,381,148.82 0.7938 16,972,355.94 14,518,958.94 0.7862 11,414,805.52
-CHF 77.09 6.9738 537.61 77.09 6.8336 526.80
Other monetary funds: -- -- 73,063,433.95 -- -- 65,254,955.00
-RMB -- -- 2,116,839.00 -- -- 7,777,036.85
-USD 11,530,757.26 6.1528 70,946,443.28 9,427,375.56 6.0969 57,477,766.05
-EUR 18.06 8.3946 151.61 18.06 8.4189 152.04
-JPY 1.00 0.0608 0.06 1.00 0.0578 0.06
Total -- -- 470,252,156.06 -- -- 872,461,415.00
Special explanation shall be made for the accounts limited by being mortgaged, pledged or frozen, deposited overseas or with
potential collecting risks:
① Other monetary funds of USD, EUR and JPY at the period-end were the foreign currency deposits subject to
the verification stage that according to the relevant regulations of the National Foreign Exchange Management
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
which received from the export products of the Group.
② The USD deposit of other monetary funds at the period-end was of USD 4,197,957.98,which equaled to RMB
25,829,195.86 Yuan and was the pledge of margin of short-term borrowings.
③ Particulars bout overseas deposits: On 30 Jun. 2014, the monetary capital deposited in the registration
place--Hong Kong of the Group’s wholly owned subsidiary Luthai (HK) was amount to RMB 16,724,282.84 Yuan
(on 31 Dec. 2013: RMB 11,351,716.95); the monetary capital deposited in the registration place--USA of the
Group’s wholly owned subsidiary Luthai (USA) was amount to RMB 2,084,397.90 Yuan; the monetary capital
deposited in the registration place--Cambodia of the Group’s wholly owned subsidiary Luthai (Cambodia) was
amount to RMB 3,098,571.86 Yuan.
2. Trading financial assets
(1) Trading financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
Derivative financial assets 0.00 29,949,120.00
Total 29,949,120.00
3. Notes receivable
(1) Category of notes receivable
Unit: RMB Yuan
Category Closing balance Opening balance
Bank acceptance bill 5,702,644.00 11,596,632.00
Letter of credit 100,483,365.75 114,509,748.23
Total 106,186,009.75 126,106,380.23
(2) undue notes endorsed to other parties at the end of the period
Notes which the Company endorsed to the other party at the period-end but not expire yet.
Unit: RMB Yuan
Drawer units Date of issuance Due day Amount Note
Shaoxing Zhongpu Imp. & Exp.
28 Apr. 2014 18 Oct. 2014 1,560,330.00
Co., Ltd.
Ningbo Romon Economy And
24 Jan. 2014 24 Jun. 2014 1,500,000.00
Trade Co., Ltd.
Shaoxing Zhongpu Imp. & Exp.
26 May 2014 26 Nov. 2014 1,301,285.32
Co., Ltd.
Shaoxing Zhongpu Imp. & Exp. 27 Jun. 2014 26 Dec. 2014 1,270,153.00
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Co., Ltd.
Ningbo Romon Sanyo Fashion
28 Mar. 2014 28 Sep. 2014 1,175,849.73
Co., Ltd.
Total -- -- 6,807,618.05 --
4. Dividends receivable
Unit: RMB yuan
Whether the
Opening Reason for related accounts
Item Increase Decrease Closing amount
amount failing to recover decreased in
value
Dividends receivable aging
0.00 120,000.00 120,000.00 0.00
within 1 year
Of which: -- -- -- -- -- --
Of which: -- -- -- -- -- --
Total 120,000.00 120,000.00 -- --
Notes:
5. 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
Proporti Proport Proporti Proportio
Amount Amount Amount Amount
on ion on n
Accounts receivable for which bad debt provisions are made on the group basis
Aging group 200,707,628.55 99.35% 10,155,388.37 5.06% 295,282,274.37 99.56% 14,847,394.75 5.03%
Subtotal of the groups 200,707,628.55 99.35% 10,155,388.37 5.06% 295,282,274.37 99.56% 14,847,394.75 5.03%
Accounts receivable with
insignificant single
100.00
amount and individually 1,313,784.00 0.65% 1,313,784.00 1,313,784.00 0.44% 1,313,784.00 100.00%
%
withdrawn bad debt
provision
Total 202,021,412.55 -- 11,469,172.37 -- 296,596,058.37 -- 16,161,178.75 --
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 2014 of Luthai 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
Of which: -- -- -- -- -- --
Within 1 year 199,537,447.73 99.42% 9,976,872.39 294,619,173.84 99.78% 14,730,958.71
Subtotal of within
199,537,447.73 99.42% 9,976,872.39 294,619,173.84 99.78% 14,730,958.71
1 year
1-2 years 792,806.73 0.39% 79,280.67 408,104.41 0.14% 40,810.44
2-3 years 139,769.12 0.07% 27,953.82 8,732.39 0.00% 1,746.48
Over 3 years 237,604.97 0.12% 71,281.49 246,263.73 0.08% 73,879.12
Total 200,707,628.55 -- 10,155,388.37 295,282,274.37 -- 14,847,394.75
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
Account receivable with insignificant single amount but provisions for bad debts individually at the period-end:
√Applicable □Inapplicable
Unit: RMB Yuan
Content of accounts Provision for Withdrawal
Book value Reason for withdrawal
receivable bad debts proportion
Due to the receivables of subsidiary Xinsheng Power aging
Zichuan Liaozhai Hotel over 3 three years. As Xinsheng Power is in bad operation
1,168,548.00 1,168,548.00 100.00%
Co., Ltd. and barely meet the payment that the Company made
provision in full amount of its due account.
Due to the receivables of subsidiary Xinsheng Power aging
ZIBO HUAYANG over 3 three years. As Xinsheng Power is in bad operation
145,236.00 145,236.00 100.00%
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 -- --
(2) Information of top 5 accounts receivable:
Unit: RMB Yuan
The relationship
Name of entity Amount Aging Proportion
with the Company
Customer A Non-related party 18,708,409.17 Within 1 year 9.26%
Customer B Non-related party 17,775,407.35 Within 1 year 8.80%
Customer C Non-related party 14,898,419.82 Within 1 year 7.38%
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Customer D Non-related party 11,801,226.89 Within 1 year 5.84%
Customer E Non-related party 9,463,048.24 Within 1 year 4.68%
Total -- 72,646,511.47 -- 35.96%
6. Other accounts receivable
(1) Other accounts receivable disclosed by type
Unit: RMB Yuan
Closing balance Opening balance
Provision for doubtful Provision for doubtful
Balance Balance
Category debts debts
Proportio Proportio Proportion Proport
Amount Amount Amount Amount
n n ion
Other accounts receivable that provisions for bad debts by group
Aging group 63,782,613.86 100.00% 9,316,206.73 14.61% 78,468,096.91 100.00% 9,859,686.91 12.57%
Subtotal of groups 63,782,613.86 100.00% 9,316,206.73 14.61% 78,468,096.91 100.00% 9,859,686.91 12.57%
Total 63,782,613.86 -- 9,316,206.73 -- 78,468,096.91 -- 9,859,686.91 --
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 provision for bad debts by aging analysis:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Period-end Period-begin
Book balance Book balance
Aging Provision for bad Provision for bad
Proporti debts Proporti debts
Amount Amount
on on
Within 1 year
Including:
Within 1 year 30,812,246.58 48.31% 1,540,612.34 49,151,182.43 62.64% 2,457,559.12
Subtotal of within 1 year 30,812,246.58 48.31% 1,540,612.34 49,151,182.43 62.64% 2,457,559.12
1-2 years 8,230,683.22 12.90% 823,068.32 4,480,131.64 5.71% 448,013.17
2-3 years 4,693,791.53 7.36% 938,758.31 4,969,202.42 6.33% 993,840.49
Over 3 years 20,045,892.53 31.43% 6,013,767.76 19,867,580.42 25.32% 5,960,274.13
Total 63,782,613.86 -- 9,316,206.73 78,468,096.91 -- 9,859,686.91
In the group, other accounts receivable that provision for bad debts by balance percentage:
□Applicable√ Inapplicable
In the group, other accounts receivable that provision for bad debts by other methods:
□Applicable√ Inapplicable
Other closing individually insignificant but provision for bad debts individually accounts receivable:
□Applicable√ Inapplicable
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
(2) Nature or details of other significant accounts receivable
Unit: RMB Yuan
Name of entity Amount Nature or details of the amount Proportion of the total
Reimbursed expenses of raise funds of
Reimbursed expenses of raise funds
16,172,082.22 staff housing accounts by Xinjiang 25.36%
of housing accounts receivable
Luthai
Paid the advanced funds for the
Tianhong State-owned property government of the stripping assets
10,074,300.00 15.79%
Investment Operation Co., Ltd. operating funds of Xinjiang Luthai Co.,
Ltd.
Total 26,246,382.22 -- 41.15%
(3) Information of top five other accounts receivable
Unit: RMB Yuan
Relationship with Proportion of the
Name of entity Amount Aging
the Company total
Non-related
Customer A 16,172,082.22 Within 1 year 25.36%
customer
Non-related
Customer B 10,074,300.00 1 to 2 years, over 3 years 15.79%
customer
Non-related
Customer C 3,361,619.67 Within 1 year 5.27%
customer
Non-related
Customer D 2,955,620.10 2 to 3 years, over 3 years 4.63%
customer
Non-related
Customer E 2,830,093.87 Within 1 year 4.44%
customer
Total -- 35,393,715.86 -- 55.49%
7. Prepayment
(1) List by aging analysis
Unit: RMB Yuan
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 165,457,626.51 98.46% 134,776,943.70 98.37%
1 to 2 years 828,839.20 0.49% 890,583.22 0.65%
2 to 3 years 831,941.21 0.50% 873,229.48 0.64%
Over 3 years 925,713.68 0.55% 463,015.18 0.34%
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Total 168,044,120.60 -- 137,003,771.58 --
(2) Information of the top 5 prepayment
Unit: RMB Yuan
Relationship with
Name of entity Amount Aging Reason for unsettled
the Company
Non-related Advance purchase
Supplier A 21,376,448.56 Apr.-Jun. 2014
supplier payment
Non-related Advance purchase
Supplier B 13,235,320.41 Jun. 2014
supplier payment
Non-related Advance purchase
Supplier C 13,197,224.03 Jun. 2014
supplier payment
Non-related Advance purchase
Supplier D 12,533,782.30 Jun. 2014
supplier payment
Non-related Advance purchase
Supplier E 9,043,844.04 Apr.-Jun. 2014
supplier payment
Total -- 69,386,619.34 -- --
8. Inventory
(1) Category
Unit: RMB Yuan
Closing balance Opening balance
Item Impairment of Impairment of
Book balance Book value Book balance Book value
inventories inventories
Raw materials 721,540,432.62 1,635,229.99 719,905,202.63 562,233,717.57 1,635,229.99 560,598,487.58
Construction
414,163,203.26 414,163,203.26 517,364,166.93 517,364,166.93
contract assets
Inventory goods 668,405,544.73 31,628,012.71 636,777,532.02 586,433,901.43 38,438,856.66 547,995,044.77
Assigned processing
18,437,261.90 18,437,261.90 19,112,972.03 19,112,972.03
products
Total 1,822,546,442.51 33,263,242.70 1,789,283,199.81 1,685,144,757.96 40,074,086.65 1,645,070,671.31
(2) Impairment of inventories
Unit: RMB Yuan
Decrease
Category Opening balance Withdrawal amount Closing balance
Reversal Written off
Raw materials 1,635,229.99 1,635,229.99
Inventory goods 38,438,856.66 6,810,843.95 31,628,012.71
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Total 40,074,086.65 6,810,843.95 33,263,242.70
(3) List of impairment of inventories
Item Basic Reason Proportion
The lower one between cost and
Raw materials
net realizable value
The lower one between cost and
Inventory goods
net realizable value
Notes:
Stocks balance for debt guarantee at the period-end was 78,644,581.97, and the short-term loan gained from the bank was RMB
75,000,000.00.
8. Other current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Advance payment of income tax to be ded
5,293,683.54 3,099,818.60
uctible
The VAT input tax to be deductible 18,788,526.56 30,930,382.82
Total 24,082,210.10 34,030,201.42
10. Long-term equity investment
(1) List of long-term equity investment
Unit: RMB Yuan
Explanation for Withdra
Cash
indifferences wn
Share bonus
Voting between the Impair impairm
Accoun Initial holding in the
Opening Increase/ Closing percenta share holding ment ent
Investee ting investment percenta report
balance decrease balance ge in percentage and provisi provisio
method cost ge in ing
investee voting on n in the
investee perio
percentage in reportin
d
investee g period
Zibo
Chengshu
n Power
Co., Ltd.
Cost
(hereinaft 160,000.00 160,000.00 160,000.00 2.00% 2.00%
method
er refer to
as
“Chengsh
un
101
Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Power” )
Yantai
Rongchan
g
Pharmacy
Co., Ltd.
(hereinaft Cost 55,282,600 55,282,600.
55,282,600.00 5.56% 5.56%
er refer to method .00 00
as
“Rongcha
ng
Pharmacy
”)
Gaoqing
Hongqiao
Power Cost 12,000,000 12,000,000.
12,000,000.00 20.68% 20.68%
Co., Ltd. method .00 00
(Hongqia
o Power)
67,442,600 67,442,600.
Total -- 67,442,600.00 -- -- --
.00 00
11. 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 value 7,462,807,819.24 157,081,039.21 50,603,868.13 7,569,284,990.32
Including: Property and
2,198,512,894.37 33,305,955.51 495,871.92 2,231,322,977.96
building
Machineries 5,102,576,851.85 108,067,818.83 46,310,926.73 5,164,333,743.95
Vehicles 68,662,800.93 4,667,547.15 2,855,453.81 70,474,894.27
Electronic equipments and
93,055,272.09 11,039,717.72 941,615.67 103,153,374.14
other
Closing book
Opening book Increase in the Withdrawal in the Decrease in the
-- balance in the
balance reporting period reporting period reporting period
reporting period
II. Accumulated
2,977,090,618.90 145,594,825.78 40,735,509.72 3,081,949,934.96
depreciation
Including: Property and
594,679,596.58 32,985,654.44 113,406.53 627,551,844.49
building
Machineries 2,275,377,632.62 105,175,740.90 37,219,617.17 2,343,333,756.35
Vehicles 48,245,321.84 2,928,629.98 2,565,606.11 48,608,345.71
Electronic equipments and
58,788,067.86 4,504,800.46 836,879.91 62,455,988.41
other
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Closing book
Opening book
-- -- balance in the
balance
reporting period
III. The net book value of
4,485,717,200.34 -- 4,487,335,055.36
fixed assets
Including: Property and
1,603,833,297.79 -- 1,603,771,133.47
building
Machineries 2,827,199,219.23 -- 2,820,999,987.60
Vehicles 20,417,479.09 -- 21,866,548.56
Other equipment 34,267,204.23 -- 40,697,385.73
IV. Total impairment
31,515,935.84 -- 29,911,881.96
provision
Including: Property and
4,823,890.00 -- 4,823,890.00
building
Machineries 26,559,526.67 -- 24,962,873.38
Vehicles 61,235.72 -- 61,235.72
Electronic equipments and
71,283.45 -- 63,882.86
other
V. Total book value of fixed
4,454,201,264.50 -- 4,457,423,173.40
assets
Including: Property and
1,599,009,407.79 -- 1,598,947,243.47
building
Machineries 2,800,639,692.56 -- 2,796,037,114.22
Vehicles 20,356,243.37 -- 21,805,312.84
Electronic equipments and
34,195,920.78 -- 40,633,502.87
other
Depreciation amount of this reporting period was RMB 145,594,825.78; original value of RMB 22,299,818.33 was transferred into
fixed assets from construction project.
(2) Fixed assets leased out from operation lease
Unit: RMB Yuan
Category Closing book value
Property and building 1,846,128.08
(3) Information of fixed assets failed to accomplish certification of propert
Item Reason Estimated accomplish date
Ongoing inspection, surveying, verification to
Weaving and dyeing workshop 2015-12-31
application procedures
Worker dormitory building of east Ongoing inspection, surveying, verification to
2015-12-31
industrial park application procedures
Ongoing inspection, surveying, verification to
Lufeng weaving and dyeing workshop 2015-12-31
application procedures
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Semi-annual Report 2014 of Luthai Textile Co., Ltd.
Notes of fixed assets
12. Construction in progress
(1) List of construction in progress
Unit: RMB Yuan
Closing balance Opening balance
Item Impairmen Impairmen
Book balance Book value Book balance Book value
t provision t provision
Luthai West building, staff
118,613,349.00 118,613,349.00 103,071,449.41 103,071,449.41
dormitory
Increasing production line project of
0.23 million spindle and 35,000 66,374,261.69 66,374,261.69 47,244,724.21 47,244,724.21
twister
Production line project of 40
17,291,229.61 17,291,229.61 14,514,623.54 14,514,623.54
million-meter high-grade yarn-dyed
Remolding of inter-vehicle inspection workshop
619,592.78 619,592.78 567,800.07 567,800.07
of arrange A factory
Xinjiang Luthai plant engineering 7,383,837.99 7,383,837.99 8,221,937.23 8,221,937.23
Xinsheng power renovation project 25,631,345.83 25,631,345.83 21,272,428.65 21,272,428.65
Helijie energy saving engineering 6,200,126.03 6,200,126.03 4,375,845.28 4,375,845.28
Clothing project of Luthai
17,251,812.85 17,251,812.85
(Cambodia)
Other small projects 39,621,954.37 39,621,954.37 28,691,025.20 28,691,025.20
Total 298,987,510.15 298,987,510.15 227,959,833.59 227,959,833.59
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
(2) Changes in significant construction in progress
Unit: RMB Yuan
Project input Capitalizatio Including
Transferred to Other Project
Name of project Budget Opening balance Increase percentage n of capitalizatio
fixed assets decrease process
of budget interest interest this p
Luthai West
building, staff 106,500,000.00 103,071,449.41 15,541,899.59 98.00% 98.00%
dormitory
Increasing
production line
project of 0.23 928,660,000.00 47,244,724.21 19,129,537.48 9.82% 9.82%
million spindle
and 35,000 twister
Production line
project of 40
million-meter 504,700,000.00 14,514,623.54 2,776,606.07 86.53% 86.53%
high-grade
yarn-dyed
Remolding of inter-vehicle
inspection workshop
9,630,000.00 567,800.07 51,792.71 99.00% 99.00%
of arrange A
factory
Xinjiang Luthai
25,000,000.00 8,221,937.23 860,419.81 1,698,519.05 55.00% 55.00%
plant engineering
Xinsheng power
30,000,000.00 21,272,428.65 4,358,917.18 85.44% 85.44%
renovation project
Helijie energy
saving 26,090,000.00 4,375,845.28 14,446,085.60 12,621,804.85 71.11% 71.11%
engineering
Clothing project
of Luthai 123,056,000.00 17,251,812.85 15.27% 15.27%
(Cambodia)
Other small
28,691,025.20 18,910,423.60 7,979,494.43
projects
Total 1,753,636,000.00 227,959,833.59 93,327,494.89 22,299,818.33 -- --
Notes of changes in construction in progress:
(3) Information of procedures of significant construction in progress
Item Project process Note
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
The process of the project is measured on basis of
Increasing production line project of 0.23
9.82% proportion of the actual cost occurred to total
million spindle and 35,000 twister
contract projected cost
13. Engineering materials
Unit: RMB Yuan
Increase in the Decrease in the
Item Opening balance Closing balance
reporting period reporting period
Specific materials 998,412.00 342,216.00 656,196.00
Specific equipments 18,096,070.53 137,577,464.17 94,986,897.85 60,686,636.85
Total 19,094,482.53 137,577,464.17 95,329,113.85 61,342,832.85
Notes of engineering materials
14. Intangible assets
(1) Information
Unit: RMB Yuan
Increase in the reporting Decrease in the
Item Opening balance Closing balance
period reporting period
I. Total original book value 414,726,676.11 3,474,453.00 418,201,129.11
Land use right 307,282,532.56 3,474,453.00 310,756,985.56
Land use right of Xinsheng
12,155,433.14 12,155,433.14
Power
Lufeng Weaving &
53,490,972.94 53,490,972.94
Dyeing-land use right
Luqun Textile-land use right 39,632,561.00 39,632,561.00
Franchise of patent 1,985,176.47 1,985,176.47
Software use right 180,000.00 180,000.00
II. Accumulative
61,880,011.87 5,699,474.24 67,579,486.11
amortization
Land use right 47,671,669.66 4,386,644.70 52,058,314.36
Land use right of Xinsheng
3,945,279.58 253,671.66 4,198,951.24
Power
Lufeng Weaving &
4,267,310.64 541,552.94 4,808,863.58
Dyeing-land use right
Luqun Textile-land use right 5,187,112.67 418,346.10 5,605,458.77
Franchise of patent 628,639.32 99,258.84 727,898.16
Software use right 180,000.00 180,000.00
III. Total net book value of
352,846,664.24 -2,225,021.24 350,621,643.00
intangible assets
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Land use right 259,610,862.90 -91,219.70 258,698,671.20
Land use right of Xinsheng
8,210,153.56 -253,671.66 7,956,481.90
Power
Lufeng Weaving &
49,223,662.30 -541,552.94 48,682,109.36
Dyeing-land use right
Luqun Textile-land use right 34,445,448.33 -418,346.10 34,027,102.23
Franchise of patent 1,356,537.15 -99,258.84 1,257,278.31
Software use right
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
352,846,664.24 -2,225,021.24 350,621,643.00
intangible assets
Land use right 259,610,862.90 -91,219.70 258,698,671.20
Land use right of Xinsheng
8,210,153.56 -253,671.66 7,956,481.90
Power
Lufeng Weaving &
49,223,662.30 -541,552.94 48,682,109.36
Dyeing-land use right
Luqun Textile-land use right 34,445,448.33 -418,346.10 34,027,102.23
Franchise of patent 1,356,537.15 -99,258.84 1,257,278.31
Software use right
Amortization was of RMB 5,699,474.24 in the reporting period.
15. Goodwill
Unit: RMB Yuan
Impairment
Name of investee or event that Increase in the Decrease in the
Opening balance Closing balance provision at
generated goodwill reporting period reporting period
period-end
Xinsheng Power 20,563,803.29 20,563,803.29
Helijie 50,000.00 50,000.00
Total 20,613,803.29 0.00 0.00 20,613,803.29
Notes of test method of goodwill impairment and impairment withdrawal method:
Test method of goodwill impairment and impairment withdrawal method please refer to “Intangible assets impairment”.
16. Long-term amortization expense
Unit: RMB Yuan
107
2014 Semi-annual Report of Luthai Textile Co., Ltd.
Amortization Reason for other
Item Opening balance Increase Other decrease Closing balance
balance decrease
Xinjiang Luthai
1,711,304.99 450,000.00 56,911.26 2,104,393.73
land contact fee
Total 1,711,304.99 450,000.00 56,911.26 2,104,393.73 --
Notes of long-term amortization expense:
17. Deferred tax assets and liabilities
(1) Deferred tax assets and liabilities are not listed as the net value after offset
Deferred tax assets and liabilities that already recognize
Unit: RMB Yuan
Item Closing balance Opening balance
Deferred income tax assets:
Provision for assets impairment 13,229,602.63 15,370,879.82
One-time listed decoration expenses 1,636,620.02 1,636,620.02
Offset unrealized internal profit 7,506,236.72 8,869,783.85
Payroll payable 22,846,774.36 22,846,774.36
Deferred income 9,897,396.23 9,433,965.14
Fair value change on trading financial liabilities 157,504.50
Subtotal 55,274,134.46 58,158,023.19
Deferred income tax liabilities:
Depreciation of fixed assets 2,077,537.33 2,057,646.57
Fair value change on trading financial assets 4,492,368.00
Subtotal 2,077,537.33 6,550,014.57
List of unrecognized deferred income tax assets
Unit: RMB Yuan
Item Closing balance Opening balance
Deductible temporary 6,726,131.22 7,186,841.88
Deductible losses 78,376,397.15 60,199,158.60
Total 85,102,528.37 67,386,000.48
Deductible losses of unrecognized deferred income tax assets will due in the following years
Unit: RMB Yuan
Year Closing balance Opening balance Remark
2016 10,052,636.34 10,052,636.34
2017 22,210,063.54 22,210,063.54
2018 27,936,458.72 27,936,458.72
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
2019 18,177,238.55
Total 78,376,397.15 60,199,158.60 --
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
Provision for assets impairment 77,234,372.54 90,424,046.27
One-time listed decoration expenses 10,910,800.14 10,910,800.14
Offset unrealized internal profit 51,906,725.12 62,824,932.08
Payroll payable 140,654,913.13 140,654,913.13
Deferred income 64,475,974.89 62,893,100.81
Fair value change on trading financial liabilities 1,050,030.00
Subtotal 346,232,815.82 367,707,792.43
Deductible different items
Depreciation of fixed assets 12,591,135.33 12,470,585.27
Fair value change on trading financial assets 29,949,120.00
Subtotal 12,591,135.33 42,419,705.27
(2) Deferred income tax assets and liabilities are listed as the net value after offset
Composition items of the deferred income tax assets and liabilities after offset
Unit: RMB Yuan
Deferred deductible
Deferred deductible
Deferred income tax Deferred income tax or taxable temporar
or taxable temporar
assets and liabilities assets and liabilities y differences at the
Item y differences at the
at the end of the at the opening of the opening of the per
end of the period
period period iod
Deferred income tax assets 55,274,134.46 346,232,815.82 58,158,023.19 367,707,792.43
Deferred income tax liabilities 2,077,537.33 12,591,135.33 6,550,014.57 42,419,705.27
18. List of provision for assets impairment
Unit: RMB Yuan
Increase in this Decrease in this period
Item Opening balance Closing balance
period Reversal Written off
I. Provision for bad debt 26,020,865.66 5,235,486.56 20,785,379.10
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
II. Provision for inventory
40,074,086.65 6,810,843.95 33,263,242.70
falling price
VII. Impairment provision of
31,515,935.84 1,604,053.88 29,911,881.96
fixed assets
Total 97,610,888.15 5,235,486.56 8,414,897.83 83,960,503.76
Notes of provision for assets impairment
19. Other non-current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Advance payment for land 12,781,283.00 16,255,736.00
Total 12,781,283.00 16,255,736.00
Notes of other non-current assets
20. Short-term loan
(1) Category
Unit: RMB Yuan
Category Closing balance Opening balance
Pledge loan 25,829,195.86
Mortgage loan 75,000,000.00 278,000,000.00
Guarantee loan 100,000,000.00
Credit loan 514,155,692.03 270,664,954.85
Total 614,984,887.89 648,664,954.85
Note:
21. Tradable financial liabilities
Unit: RMB Yuan
Item Closing fair calue Opening fair value
Derivative financial liabilities 1,050,030.00 0.00
Total 1,050,030.00
Note:
22. Notes payable
Unit: RMB Yuan
Category Closing balance Opening balance
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Trade acceptance bill 6,618,500.87 10,213,263.69
Total 6,618,500.87 10,213,263.69
RMB 6,618,500.87 will be due in next fiscal period.
Notes of notes payable:
23. Accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 191,210,416.40 373,284,961.47
1 to 2 years 9,568,227.71 18,461,311.03
2 to 3 years 11,816,110.65 1,511,915.39
Over 3 years 6,214,004.72 6,795,491.80
Total 218,808,759.48 400,053,679.69
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares of the
Company
Unit: RMB Yuan
Name of entity Closing amount Opening amount
Lucheng Textile 379,326.00 377,246.00
Taimei necktie 100,485.00 100,485.00
Total 479,811.00 477,731.00
24. Advance from customers
(1)
Unit: RMB Yuan
Item Closing amount Opening amount
Within 1 year 88,420,856.38 97,614,607.33
1 to 2 years 5,158,117.16 2,250,097.27
2 to 3 years 1,313,775.53 654,219.48
Over 3 years 408,944.16 274,130.73
Total 95,301,693.23 100,793,054.81
25. Payroll payable
Unit: RMB Yuan
Item Opening book balance Increase Decrease Closing book
balance
I. Salary, bonus, allowance, subsidy 344,259,371.30 525,269,795.62 624,208,344.80 245,320,822.12
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
II. Employee welfare 24,144,319.61 24,144,319.61
III. Social insurance 1,120,900.99 112,341,549.93 94,226,598.20 19,235,852.72
Including: 1. Medical insurance
113,262.87 27,312,329.11 22,616,091.02 4,809,500.96
premiums
2. Basic pension benefits 833,452.88 76,920,340.37 64,218,394.96 13,535,398.29
3. Unemployment
105,084.09 4,262,144.85 3,587,329.38 779,899.56
insurance
4. Work-related injury
19,435.78 2,253,136.55 2,230,335.03 42,237.30
insurance
5. Maternity insurance 49,665.37 1,593,599.05 1,574,447.81 68,816.61
IV. Housing fund 31,533.54 8,714,800.80 7,914,083.75 832,250.59
V. Other 26,651,029.16 15,317,320.41 9,817,323.61 32,151,025.96
Including: 1.Labor union budget
26,651,029.16 11,945,821.89 6,445,825.09 32,151,025.96
and employee education budget
2. Non-monetary benefits 3,371,498.52 3,371,498.52
Total 372,062,834.99 685,787,786.37 760,310,669.97 297,539,951.39
RMB 0.00 is the amounts in arrears in the payroll payable.
The labor union budget and employee education budget is RMB32, 151,025.96, and the non-monetary benefits are RMB
3,371,498.52, as well as the compensation for terminating the labor contract is RMB 0.00.
Arrangements of the estimate release time and amount of the payroll payable
Estimate release time Amount
2014 169,542,425.13
2015 64,839,096.99
2016 10,939,300.00
Total 245,320,822.12
26. Taxes payable
Unit: RMB Yuan
Item Closing balance Opening balance
Value-added tax 2,294,964.75 4,631,094.67
Business tax 120,357.43 678,849.06
Corporate income tax 52,413,581.38 47,815,359.19
Personal income tax 9,628,984.26 2,286,186.69
Urban maintenance and construction tax 2,655,738.14 27,968,705.59
Stamp tax 333,540.48 395,320.30
Property tax 4,103,686.60 4,549,007.07
Land use tax 2,706,601.13 2,902,252.57
Education surtax 1,149,253.39 12,022,552.49
112
2014 Semi-annual Report of Luthai Textile Co., Ltd.
Local education surtax 766,914.99 8,002,185.98
Local water conservancy facility construction fund 373,066.98 3,996,865.12
Total 76,546,689.53 115,248,378.73
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.
27. Interest payable
Unit: RMB Yuan
Item Closing balance Opening balance
Interest payable of installment payments due debt of
389,200.45 405,833.90
long term borrowings
Interest payable on short-term borrowings 1,915,211.80 1,093,641.16
Total 2,304,412.25 1,499,475.06
Note:
28. Dividends payable
Unit: RMB Yuan
Name of company Closing balance Opening balance Reason for unsettlement over 1 year
Individual shareholders’ dividends Individual shareholders didn’t withdraw cash
441,966.54 441,966.54
paid by the Group dividends on previous years
Total 441,966.54 441,966.54 --
Note:
29. Other accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 16,762,236.28 28,342,678.54
1 to 2 years 27,953,094.59 17,506,829.28
2 to 3 years 3,688,858.84 5,821,966.61
Over 3 years 26,172,873.28 32,773,825.91
Total 74,577,062.99 84,445,300.34
（2）Notes of the other large amount accounts payable aging over 1 year
Name of creditor Amount Reason for unsettlement Whether pay after the
Balance Sheet Date or
not?
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Xinjiang Autonomous Region Cotton 11,925,000.00 Received earnest money for No
and linen company Sale Contract
Workshop disbursements of 63 thousand 6,014,767.36 Disbursements No
cotton spinning of the factory owner
Total 17,939,767.36
（3）Notes of other accounts payable with significant amount
Name of creditor Closing amount Nature or content
Xinjiang Autonomous Region Cotton 11,925,000.00 Received earnest money for Sale
and linen company Contract
Workshop disbursements of 63 thousand cotton 6,014,767.36 Disbursements
spinning of the factory owner
Total 29,864,767.36
30. Non-current liabilities due within 1 year
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Long-term loan due within 1 year 27,456,730.45 85,356,600.00
Total 27,456,730.45 85,356,600.00
(2) Long-term loan due within 1 year
Long-term loan due within 1 year
Unit: RMB Yuan
Item Closing balance Opening balance
Credit loan 27,456,730.45 85,356,600.00
Total 27,456,730.45 85,356,600.00
RMB000 of long-term loan due within 1 year was of mature loan with extended term.
Top five long-term loans due within 1 year
Unit: RMB Yuan
Closing balance Opening balance
Curren Rate Foreign Foreign
Creditor Starting date Ending date
cy (%) currency RMB balance currency RMB balance
balance balance
Bank of East Asia
(China) Co., Ltd. 19 Mar. 2013 18 Apr. 2014 USD 2.24% 10,000,000.00 60,969,000.00
Beijing Branch
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
The Hang Seng Bank
(China) Co., Ltd. 20 Nov. 2013 20 May. 2014 USD 2.49% 2,000,000.00 12,193,800.00
Tianjin branch
The Hang Seng Bank
(China) Co., Ltd. 20 Nov. 2013 20 Dec. 2014 USD 2.48% 2,000,000.00 12,305,600.00 2,000,000.00 12,193,800.00
Tianjin branch
The Hang Seng Bank
(China) Co., Ltd. 20 Nov. 2013 20 May 2015 USD 2.48% 2,000,000.00 12,305,600.00
Tianjin branch
The Hang Seng Bank
(China) Co., Ltd. 5 May 2014 5 Nov. 2014 USD 3.02% 231,238.66 1,422,765.23
Tianjin branch
The Hang Seng Bank
(China) Co., Ltd. 5 May 2014 5 May. 2015 USD 3.02% 231,238.66 1,422,765.22
Tianjin branch
Total -- -- -- -- -- 27,456,730.45 -- 85,356,600.00
31. Other current liabilities
Unit: RMB Yuan
Item Closing balance Opening balance
Note:
32. Long-term loan
(1) Category of long-term loan
Unit: RMB Yuan
Item Closing balance Opening balance
Credit loan 97,521,321.88 97,550,400.00
Total 97,521,321.88 97,550,400.00
Notes:
（2）The top five long-term loan
Unit: RMB Yuan
Closing amount Opening amount
Curren Rate
Company Starting date End day Foreign Foreign Local
cy (%) Local currency
currency currency currency
The Hang Seng Bank 20 Nov. 2013 20 May 2015 USD 2.49% 2,000,000.00 12,193,800.00
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
(China) Co., Ltd.
Tianjin branch
The Hang Seng Bank
(China) Co., Ltd. 20 Nov. 2013 20 Nov. 2015 USD 2.48% 14,000,000.00 86,139,200.00 14,000,000.00 85,356,600.00
Tianjin branch
The Hang Seng Bank
(China) Co., Ltd. 5 May 2014 5 May 2016 USD 3.02% 1,618,670.63 9,959,356.65
Tianjin branch
The Hang Seng Bank
(China) Co., Ltd. 5 May 2014 5 Nov. 2015 USD 3.02% 231,238.66 1,422,765.23
Tianjin branch
Total -- -- -- -- -- 97,521,321.88 -- 97,550,400.00
33. Long-term payable
(1) The top five long-term payable
Unit: RMB Yuan
Conditions of
Company Term Initial amount Rate (%) Accrued interest Closing balance
loan
Electric power
9,735,560.00 9,735,560.00 Credit
bonds payable
34. Other non-current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Deferred income 64,475,974.89 62,893,100.81
Other 1,840,000.00 1,840,000.00
Total 66,315,974.89 64,733,100.81
Notes of other non-current liabilities
List of liabilities involved in government subsidy as follows:
Unit: RMB Yuan
Amount recorded
New subsidy Related to
into non-operating Closing
Item Opening balance amount in the Other changes assets/Related to
income in the balance
reporting period income revenue
reporting period
Land subsidies 62,893,100.81 677,125.92 62,215,974.89 Related to assets
Equipment subsidies 2,400,000.00 140,000.00 2,260,000.00 Related to assets
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Total 62,893,100.81 2,400,000.00 817,125.92 64,475,974.89 --
35. Share capital
Unit: RMB Yuan
Increase/Decrease (+/-)
Opening Capitalization Closing
Issuing new
balance Bonus shares of public Other Subtotal balance
shares
reserves
Total shares 955,800,496.00 955,800,496.00
Note: if there was capital increase or capital decrease in the reporting period, shall disclose the name of public accounting firm of
perform capital verification and reference number of capital verification for the company operating less than 3 years, just indicate net
assets before establishment. Limited liability company changed into joint - stock company shall indicate the capital verification when
the company establish.
36. Capital reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Capital premium (share
920,142,111.39 920,142,111.39
capital premium)
Other capital reserves 78,362,694.27 4,747,088.31 83,109,782.58
Other comprehensive income 2,350,000.00 2,350,000.00
Total 1,000,854,805.66 4,747,088.31 1,005,601,893.97
Note: The increase of RMB 4, 747,088.31on other capital reserves was mainly because RMB4, 747,007.52 was recognized on fair
value of share-based instruments that settled by equity method.
37. Surplus reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 656,196,838.67 656,196,838.67
Discretional surplus reserves 3,341,572.58 3,341,572.58
Total 659,538,411.25 659,538,411.25
Notes of surplus reserves: for surplus reserves transferred to share capital, compensating losses and distributed as dividends, relevant
resolutions shall be explained:
38. Retained profits
Unit: RMB Yuan
Withdrawal or distributed
Item Amount
proportion
Opening balance of retained profits before
3,379,354,741.18 --
adjustments
Opening balance of retained profits after 3,379,354,741.18 --
117
2014 Semi-annual Report of Luthai Textile Co., Ltd.
adjustments
Add: Net profit attributable to owners of the
476,880,256.93 --
Company
Less: Withdrawal of statutory surplus reserves 10.00%
Dividend of common stock payable 363,204,188.48
Closing retained profits 3,493,030,809.63 --
List of adjustment of opening retained profits:
1) RMB* opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for
Business Enterprises and relevant new regulations.
2) RMB* opening retained profits was affected by changes on accounting policies.
3) RMB* opening retained profits was affected by correction of significant accounting errors.
4) RMB* opening retained profits was affected by changes in combination scope arising from same control.
5) RMB* 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.
39. 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 3,039,920,640.88 2,976,710,964.24
Other operating income 74,305,940.74 83,784,290.93
Cost of sales 2,137,850,293.37 2,184,574,937.90
(2) Main business (Classified by industry)
Unit: RMB Yuan
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
Textile and apparel 2,724,309,422.81 1,824,632,782.41 2,616,382,415.59 1,820,282,658.11
Cotton 159,410,859.92 149,326,721.78 222,917,964.19 196,699,415.84
Electricity and gas 119,119,630.13 88,061,054.53 102,696,182.88 85,247,430.26
Other 37,080,728.02 28,270,113.47 34,714,401.58 28,892,231.74
Total 3,039,920,640.88 2,090,290,672.19 2,976,710,964.24 2,131,121,735.95
(3) Main business (Classified by product)
Unit: RMB Yuan
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
118
2014 Semi-annual Report of Luthai Textile Co., Ltd.
Fabric products 2,110,310,993.51 1,408,130,198.92 2,034,521,635.12 1,427,276,223.26
Skirts 613,998,429.30 416,502,583.49 581,860,780.47 393,006,434.85
Cotton 159,410,859.92 149,326,721.78 222,917,964.19 196,699,415.84
Electricity, gas 119,119,630.13 88,061,054.53 102,696,182.88 85,247,430.26
Other 37,080,728.02 28,270,113.47 34,714,401.58 28,892,231.74
Total 3,039,920,640.88 2,090,290,672.19 2,976,710,964.24 2,131,121,735.95
(4) Main business (Classified by area)
Unit: RMB Yuan
Reporting period Same period of last year
Area
Revenue of sales Costs of sales Revenue of sales Costs of sales
HK 223,063,001.01 148,872,395.32 224,302,228.93 157,348,013.59
Japan and South Korea 188,416,112.34 126,981,508.64 229,106,611.11 157,602,520.53
Southeast Asia 756,436,217.45 504,853,083.64 756,460,493.16 530,619,265.08
Europe and America 471,269,443.76 317,969,214.62 472,572,057.53 322,753,717.65
Other 441,989,539.34 295,295,948.84 348,347,623.44 243,824,599.27
Domestic sales 958,746,326.98 696,318,521.13 945,921,950.07 718,973,619.83
Total 3,039,920,640.88 2,090,290,672.19 2,976,710,964.24 2,131,121,735.95
(5) The revenue of sales from the top five customers
Unit: RMB Yuan
Customer Main business revenue Proportion of total business revenue (%)
Customer A 262,182,742.50 8.42%
Customer B 148,733,270.05 4.78%
Customer C 142,713,976.89 4.58%
Customer D 138,419,126.06 4.44%
Customer E 112,460,574.34 3.61%
Total 804,509,689.84 25.83%
Note:
40. Business tax and surtax
Unit: RMB Yuan
Item Reporting period Same period of last year Calculation and payment standard
Business tax 617,475.60 542,993.23
Urban maintenance and construction
12,253,415.71 16,639,250.33
tax
Education surtax 5,353,843.11 7,315,311.26
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Local education surtax 3,569,237.62 4,873,761.88
Local water conservancy construction
1,749,617.91 2,364,331.12
fund
Total 23,543,589.95 31,735,647.82 --
Note:
41. Selling expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
Traffic expenses 16,454,022.50 15,953,266.62
Wages 27,103,133.51 22,813,166.45
Cost of stores 11,438,534.62 11,651,026.60
Advertisement fees 11,884,726.86 1,991,766.54
Port surcharge 3,169,415.15 3,561,927.93
Copyright payment 1,411,714.95 1,170,135.27
Rental expenses 2,982,934.22 1,827,036.45
CIF 133,714.31 1,102,879.93
Patent fees 1,042,079.41 1,603,574.50
Other 17,487,870.29 20,137,059.86
Total 93,108,145.82 81,811,840.15
42. Administration expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
R&D expenses 148,094,648.52 115,069,711.84
Wages 41,604,372.05 52,398,919.79
Depreciation expenses 12,075,385.41 11,438,349.42
Taxes 15,345,715.98 14,195,779.04
Share-based payment fees 4,747,007.52 4,801,767.48
Warehouse funds 8,782,718.18 8,792,074.55
Repair expenses 1,833,072.82 2,230,827.22
Amortization of intangible assets 5,010,321.66 4,382,491.06
Labor union expenditures 6,536,835.39 5,523,182.75
Insurance expenses 3,706,582.55 3,301,928.88
Traffic expenses 3,604,235.55 3,376,939.23
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Other 43,591,779.00 35,310,358.13
Total 294,932,674.63 260,822,329.39
43. Financial expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
Interest expenses 13,605,979.71 22,196,732.55
Interest costs 4,797,528.00 1,916,200.18
Exchange gains and losses -4,943,357.38 -102,155.03
Other 3,576,213.13 4,158,562.94
Total 7,441,307.46 24,336,940.28
44. Gains and losses from changes in fair value
Unit: RMB Yuan
Source Reporting period Same period of last year
Trading financial assets -29,949,120.00 -1,718,481.00
Including: gains from the changes in fair value of
-29,949,120.00 -1,718,481.00
derivative financial instruments
Trading financial liabilities -1,050,030.00
Total -30,999,150.00 -1,718,481.00
Note:
45. Investment income
(1) List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Investment income received from long term equity
120,000.00
accounted by cost method
Investment income received from disposal of
21,158,949.08 17,649,677.42
trading financial assets
Total 21,278,949.08 17,649,677.42
46. Impairment losses
Unit: RMB Yuan
121
2014 Semi-annual Report of Luthai Textile Co., Ltd.
Item Reporting period Same period of last year
I. Bad debts losses -5,235,486.56 -2,922,150.92
Total -5,235,486.56 -2,922,150.92
47. Non-operating gains
(1)
Unit: RMB Yuan
The amount included in the
Item Reporting period Same period of last year current non-recurring gains
and losses
Total gains from disposal of non-current
50,957.05 2,363,171.75 50,957.05
assets
Including：Gains from disposal of fixed
50,957.05 2,363,171.75 50,957.05
assets
Government grants 17,088,515.19 12,871,925.92 17,088,515.19
Other 2,687,296.00 2,834,657.53 2,687,296.00
Total 19,826,768.24 18,069,755.20 19,826,768.24
Note:
(2) List of government grants
Unit: RMB Yuan
Same period of last Related to assets/Related Belong to non-recurring
Item Reporting period
year to income revenue profit and loss or not
Related to income
Energy saving subsidy funds 1,000,000.00 Yes
revenue
Related to income
Industry development subsidy 200,000.00 Yes
revenue
Related to income
Energy saving subsidy funds 1,500,000.00 Yes
revenue
Related to income
Patent development funds 30,000.00 Yes
revenue
Emerging industry Related to income
9,000,000.00 Yes
development subsidy revenue
Related to income
Energy saving subsidy funds 100,000.00 Yes
revenue
Science and technology Related to income
2,680,000.00 Yes
innovation subsidy revenue
Related to income
Patent development funds 50,000.00 Yes
revenue
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Social insurance subsidies in Related to income
387,607.27 Yes
the fourth quarter of 2012 revenue
Poverty alleviation project
Related to income
loan fiscal interest discount 187,500.00 Yes
revenue
funds
The modern agricultural
Related to income
production development 850,000.00 Yes
revenue
project
Related to income
Import products discount 60,000.00 Yes
revenue
Related to income
Export credit insurance 38,500.00 Yes
revenue
Related to income
Export credit insurance 39,822.00 Yes
revenue
Related to income
Import equipment discount 147,960.00 Yes
revenue
Special funds of the technical Related to income
1,500,000.00 Yes
reconstruction revenue
Subsidies for Xinjiang Cotton Related to income
5,216,300.00 Yes
moving out of Xinjiang revenue
Special funds of agricultural Related to income
200,000.00 Yes
industrialization development revenue
Related to income
Finance discount 62,500.00 Yes
revenue
Subsidies For the Farmland
Related to income
Waste Mulch Comprehensive 1,730,000.00 Yes
revenue
Control Project
Science and technology Related to income
50,000.00 Yes
awards revenue
Related to income
Patent grants 86,000.00 Yes
revenue
Related to income
Quality prize of the governor 100,000.00 Yes
revenue
Related to income
Science and technology award 100,000.00 Yes
revenue
Building energy conservation Related to income
80,000.00 Yes
subsidies revenue
Related to income
Public housing subsidy funds 2,750,000.00 Yes
revenue
123
2014 Semi-annual Report of Luthai Textile Co., Ltd.
Related to income
Energy-saving incentives 300,000.00 Yes
revenue
Related to income
Patent development funds 20,000.00 Yes
revenue
Related to income
Deferred revenue amortization 817,125.92 677,125.92 Yes
revenue
Total 17,088,515.19 12,871,925.92 -- --
48. Non-operating expenses
Unit: RMB Yuan
The amount included in
Item Reporting period Same period of last year the current non-recurring
gains and losses
Loss on disposal of non-current assets 2,054,591.12 122,406.85 2,054,591.12
Including: Loss on disposal of fixed assets 2,054,591.12 122,406.85 2,054,591.12
External donation 209,994.80 211,289.70 209,994.80
Penalty expense 25,195.86 17,875.00 25,195.86
Compensation expense 631,022.86 525,859.57 631,022.86
Other 174,317.36 6,325.17 174,317.36
Total 3,095,122.00 883,756.29 3,095,122.00
Note:
49. Income tax expense
Unit: RMB Yuan
Item Reporting period Same period of last year
Current income tax expense accounted by tax and relevant
89,668,858.22 82,161,607.41
regulations
Adjustment of income tax -1,608,479.27 1,531,300.69
Total 88,060,378.95 83,692,908.10
50. Calculation procedure of basic earnings per share and diluted earnings per share
The basic EPS should be calculated by the current net profits which belongs to the Company’s common shareholders, to
divides the weighted average of the common shares outstanding. The new issued common shares should according to the
specific clauses of the issued contract, and should be calculated and confirmed from the date of accounts receivable of co
nsideration (generally as the issue date of shares).
The molecule of the gains of diluted EPS belongs to the Company’s current net profit of the common shareholders, and would
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
confirmed after the adjustments as below: (1) The interest of the diluted potential common shares confirmed in the reporting period;
(2) Profits or expenses from the conversion of the diluted potential common shares; and (3) the above influences of the adjustment of
the income taxes.
The denominator of the gains of diluted EPS equals to the sum of the following two points: (1) In the basic EPS gains,
the weighted average of the issued common shares of the Company; and (2) the weighted average of the increased comm
on shares owning to the conversion of the assumed diluted potential common shares.
When calculating the weighted average of the issued shares which increased owning to the conversion of the diluted potential
common shares, those diluted potential common shares issued in the previous period, should be assumed to convert at the year-begin;
and the diluted potential common shares issued in the current year, should be assumed to convert on the issuance date.
(1) List of earnings per share and diluted earnings per share in each period
Profit in reporting period Reporting period Same period of last year
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profit belongs to the 0.50 0.50 0.43 0.43
Company’s common
shareholders
Net profit distributable to 0.50 0.50 0.41 0.41
common shareholders of
the Company after
deducting non-recurring
gains and losses
(2) Calculation procedure of basic EPS and diluted EPS
During the reporting period, there were no diluted potential common shares in the Company so that EPS-diluted equaled to basic
EPS.
①When calculated the EPS-basic, the net profits distributable to common shareholders were as follows:
Items Reporting period Same period of last year
Net profit distributable to common shareholders of the 476,880,256.93 416,175,890.38
Company
Of which ： Net profit distributable to continual 476,880,256.93 416,175,890.38
operating
Net profit distributable to discontinued
operating
Net profit distributable to common shareholders of the 475,996,558.52 393,419,324.10
Company after deducting non-recurring gains and
losses
Of which ： Net profit distributable to continual 475,996,558.52 393,419,324.10
operating
Net profit distributable 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:
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Items Reporting period Same period of last year
Amount of outstanding issued common shares at period-begin
955,800,496.00 960,057,496.00
Add：weighted average amount of common shares issued at
current period
Deduct ： weighted average amount of common shares 709,500.00
repurchased at current period
Weighted average amount of outstanding issued common 955,800,496.00 959,347,996.00
shares at period-end
51. Other comprehensive income
Unit: RMB Yuan
Item Reporting period Same period of last year
4. Converted amount of foreign currency financial statements -3,361.77 -812,926.81
Subtotal -3,361.77 -812,926.81
Total -3,361.77 -812,926.81
Notes of other comprehensive income
52. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Unit: RMB Yuan
Item Amount
Government subsidy 18,671,389.27
Collection for employees 516,545.65
Claim income 434,310.44
Penalty income 27,002.62
Recovery of employee borrowings, petty cash and deposit 702,797.55
Other 13,798,766.58
Total 34,150,812.11
Notes:
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
Item Amount
Transportation fees 30,121,059.73
Rent for sales counters and administration expense 12,133,489.36
Rent 12,894,780.90
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Advertising fees 9,760,845.31
Business travel fee 6,008,384.69
Insurance expense 3,614,037.61
Bank charges 709,115.39
Inspection charges 98,257.20
Copyright royalty 4,222,631.59
Audit, consultancy and public notice expenses 972,710.82
Decoration and maintenance expense 911,517.51
Water and electricity expense 206,277.86
External donations 645,929.00
Advance for agricultural materials 2,922,940.05
Other 50,978,244.53
Total 136,200,221.55
Notes:
(3) Other cash received relevant to investment activities
Unit: RMB Yuan
Item Amount
Interest income 4,797,528.00
Trading financial assets investment income 21,158,949.08
Total 25,956,477.08
Notes:
(4) Other cash paid relevant to financing activities
Unit: RMB Yuan
Item Amount
Accounts 12,000,000.00
Total 12,000,000.00
Notes
(5) Other cash paid relevant to financing activities
Unit: RMB Yuan
Item Amount
Accounts paid back to related parties 12,000,000.00
Short-term loan margin 25,829,195.86
Total 37,829,195.86
Notes
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
53. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Unit: RMB Yuan
Same period of last
Supplemental information Reporting period
year
1. Reconciliation of net profit to net cash flows generated from operations： -- --
Net profit 481,537,123.32 429,559,997.78
Add: Provision for assets impairments -5,235,486.56 -2,922,150.92
Depreciation of fixed assets, oil-gas assets and productive biological assets 145,594,825.78 129,192,163.01
Amortization of intangible assets 5,699,474.24 5,221,482.37
Amortization of long-term deferred expense 56,911.26 47,536.25
Losses/gains on disposal of property, intangible asset and other long-term assets
2,003,634.07 -2,240,764.90
(gains: negative)
Losses/gains from variation of fair value (gains: negative) 30,999,150.00 1,718,481.00
Financial cost (income: negative) 4,307,508.25 20,178,377.34
Investment loss (gains: negative) -21,278,949.08 -17,649,677.42
Decrease in deferred tax assets (increase: negative) 2,883,888.73 1,789,072.84
Increase in deferred tax liabilities (decrease: negative) -4,472,477.24 -295,067.32
Decrease in inventory (increase: negative) -137,401,684.55 -90,539,396.20
Decrease in accounts receivable from operating activities (increase: negative) 89,612,169.08 22,295,309.84
Increase in accounts payable from operating activities (decrease: negative) -195,263,523.43 -5,608,443.50
Net cash flows generated from operating activities 399,042,563.87 490,746,920.17
2. Significant investing and financing activities without involvement of cash
-- --
receipts and payments
3. Change of cash and cash equivalent: -- --
Closing balance of Cash 442,306,121.20 530,885,795.41
Less: opening balance of cash 869,909,505.89 900,182,215.72
The net increase in cash and cash equivalents -427,603,384.69 -369,296,420.31
(2) Composition of cash and cash equivalents
Unit: RMB Yuan
Item Closing balance Opening balance
I. Cash 442,306,121.20 869,909,505.89
Including: Cash on hand 1,201,474.37 1,205,603.58
Bank deposit on demand 395,987,247.74 806,000,856.42
Other monetary funds on demand 45,117,399.09 62,703,045.89
III. Closing balance of cash and cash equivalents 442,306,121.20 869,909,505.89
Note:
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
54. Notes on projects on statement of change in equity
Information on “other” item names when regulating the year end balance of last year and amount adjustment, and retroactive
adjustment incorporated and produced by the enterprise under the same control:
VIII. Related Parties and Related-party Transactions
1. Information of the parent company of the Company
The
The parent The parent ultimate
Legal
Parent Relationsh Business Registered Business Registered company's company's controlling Organizati
Representa
company ip Type place nature Capital shareholdi voting party of on Code
tive
ng (%) right (%) the
Company
Textile,
Controllin electric
Limited
Lucheng g Liu power, Liu 16420039-
Liability Zibo 63,260,000 14.68% 14.68%
Textile shareholde Shizhen pharmaceu Shizhen 1
Company
r tical
investment
Notes:
2. Information of subsidiaries of the Company
Percentage
Legal Percentage
Business Registered Business Registered of Organizatio
Full name Type representati of voting
type place nature capital Shareholdin n code
ve right (%)
g (%)
Beijing
Limited
Lufeng
liability
Sunshine
corporation
Clothing RMB
Controlling (legal Wholesale, 55488176-
Co., Ltd. Beijing Liu Shizhen 15,000,000. 100.00% 100.00%
subsidiary foreign retail X
(hereinafter 00
investing
refer to as
enterprise
“Lufeng
owned)
Sunshine”)
Beijing
Joint stock
Sichuang
company(Si
Clothing RMB
Controlling no-foreign Wholesale,
Co., Ltd. Beijing Liu Shizhen 42,000,000. 60.00% 60.00% 71774843-8
subsidiary joint retail
(hereinafter 00
venture,
refer to as
unlisted)
“Beijing
129
2014 Semi-annual Report of Luthai Textile Co., Ltd.
Sichuang”)
Luthai Limited HKD
Controlling Wholesale,
(Hong liability HongKong Liu Shizhen 6,000,000.0 100.00% 100.00%
subsidiary retail
Kong) corporation 0
Shanghai
Luthai
Limited
Textile
liability
Clothing RMB
Controlling corporation Wholesale,
Co., Ltd. Shanghai Liu Shizhen 5,000,000.0 100.00% 100.00% 56659750-4
subsidiary (legal retail
(hereinafter 0
person
refer to as
owned)
“Shanghai
Luthai”)
Limited RMB
Xingjian Controlling Manufactur
liability Xinjiang Liu Shizhen 200,725,100 59.92% 59.92% 75165238-4
Luthai subsidiary e
corporation .00
Limited
liability
corporation(
Taiwan, RMB
Lufeng Controlling Manufactur
HongKong Zibo Liu Shizhen 706,160,000 75.00% 75.00% 76001835-0
Textile subsidiary e
Macao and .00
domestic
joint
ventures)
Zibo Luqun
Limited
Textile
liability
(hereinafter RMB
Controlling corporation Manufactur
refer to as Zibo Liu Shizhen 168,220,000 100.00% 100.00% 76870633-4
subsidiary (legal e
“Zibo .00
person
Luqun
owned)
Textile”)
Zibo
Xinsheng Limited
Power Co., liability
RMB
Ltd. Controlling corporation Manufactur
Zibo Liu Shizhen 162,435,600 100.00% 100.00% 61329023-1
(hereinafter subsidiary (legal e
.00
refer to as person
“Xinsheng owned)）
Power”)
Xinjiang Controlling Limited Manufactur RMB
Xinjiang Liu Shizhen 59.92% 59.92% 05317660-8
Luthai subsidiary liability e 50,000,000.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Textile corporation 00
(legal
person
owned)
Limited USD
Luthai Controlling Manufactur
liability Cambodia Zhang Ming 2,000,000.0 100.00% 100.00%
(Cambodia) subsidiary e
corporation 0
Luthai
Textile( Am
erica) Co.,
USD
Ltd. Controlling Joint stock Wholesale,
America Liu Zibin 1,000,000.0 100.00% 100.00%
(hereinafter subsidiary company retail
0
refer to as
“Luthai
America)”)
Beijing
Luthai
Joint stock
Youxian
company( u
Electronic
nlisted
Commerce Controlling Wholesale, RMB
foreign Beijing Liu Shizhen 90.00% 90.00% 39988794-1
Co., subsidiary retail 10,000,000
investing
Ltd.( herein
enterprise
after refer to
investment)
as “Luthai
Youxian ")
Zibo Helijie
Energy
Limited
Saving
liability
Technology
Controlling corporation RMB
Service Co., Zibo Li Tongmin Service 100.00% 100.00% 57287269-9
subsidiary (legal 10,000,000
Ltd.
person
(hereinafter
owned)
refer to as
“Helijie”)
3. Information of joint ventures and associated enterprises
Name Relationship Organization code
Zibo Stanluian Cosmetics Co., Ltd. (hereinafter called Affiliated person (same chairman
61329036-2
“Stanluian”) as the Company)
Zibo Taimei Tie Co., Ltd. (hereinafter refer to as “Taimei Controlling subsidiary of the parent
61329035-4
Tie”) company
Zibo Limin Purified Water Co., Ltd. Wholly-owned subsidiary of the
76575998-3
(hereinafter refer to as “Limin Purified Water”) parent company
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Zibo Luqu Land Co., Ltd. Wholly-owned subsidiary of the
77630667-2
(hereinafter refer to as “Luqu Land”) parent company
Wholly-owned subsidiary of the
Chengshun Power Co., Ltd. 69544896-X
parent company
Controlling subsidiary of
Limin Walling Material wholly-owned subsidiary of the 56251579-4
parent company
Zibo Lurui Fine Chemical Co., Ltd. (hereinafter referred to as Controlled subsidiary of the parent
06199492-6
Lurui Chemical) company
Hongqiao Hearting Other 75449967-X
Note:
4. 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
Related party decision-making Proportion Proportion
transaction Amount Amount
procedures for the (%) (%)
transaction
Lucheng Textile Towel, sock, oil product, etc. Market price 3,174,391.83 69.42% 3,291,551.44 64.51%
Electronic product, computer
equipment, computer
Lucheng Textile Market price 915,654.25 70.39%
consumable materials and
high-temperature products
Gift box for cosmetic, lotion,
Stanluian Company washing-up liquid, Liquid Market price 66,786.34 100.00% 70,216.10 100.00%
soap, etc.
Taimei Ties Purchase of ties Market price 131,058.12 0.10% 341,159.32 0.26%
Processing charges for the leg
Lucheng Textile Market price 483,524.44 0.37% 437,453.01 0.33%
of a stocking
Processing charges for
Taimei Ties Market price 4,878,775.80 99.07% 5,562,421.20 100.00%
commodities and quilt cover
Hongqiao Power Electricity and steam Market price 23,701,094.93 12.58% 29,139,798.88 17.91%
Limin Walling Building materials Market price 202,728.21 1.58% 194,049.56 1.61%
Lurui Chemical Purchase of textile auxiliary Market price 14,665,304.59 17.31%
Lurui Chemical Purchase of equipment Market price 29,059.83 0.06%
Sales of goods and rendering of labor service
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Unit: RMB Yuan
Pricing Reporting period Same period of last year
method and
decision-maki
Related party Content of the transaction Proportio Proportio
ng procedures Amount Amount
n (%) n (%)
for the
transaction
Sales of materials, electricity,
Lucheng Textile Market price 107,862.89 1.14% 129,187.99 0.17%
running water and steam
Sales of dyed yarn, fabric and
Lucheng Textile Market price 289,896.20 0.01% 337,012.82 0.02%
garments
Sales of electricity, heating
Taimei Ties Market price 13,022.39 0.00% 14,402.84 0.00%
charges, garment etc.
Sales of materials, garments,
Stanluian
electricity, running water and Market price 29,497.96 0.00% 27,321.39 0.00%
Company
heating charges
Limin Purified Sales of materials, garment and
Market price 4,439.53 0.00% 4,381.74 0.00%
Water equipment
Lurui Chemical Sales of garments Market price 123,141.44 0.01%
Chengshun Sales of materials, heating water
Market price 1,691,084.42 0.22% 2,381,827.08 0.31%
Power and garment
(2) Information of related-party lease
Rental situation of the Company
Unit: RMB Yuan
Category of Pricing basis for Rental income
Name of lessor Name of lessee the leased Initial date Ending date the rental recognized in the
assets income reporting period
House and
The Company Lucheng Textile 1 Jan.2014 31 Dec. 2016 Market price 195,200.00
building
Chengshun House and
Xinsheng Power 1 Jan.2014 31 Dec. 2014 Market price 900.00
Power building
Rental situation of the Company
Unit: RMB Yuan
Pricing basis Lease charges
Name of Name of Category of the leased
Initial date Ending date for the lease recognized in the
lessor lessee assets
charges reporting period
Lucheng Rent of scientific
The Company 1 Jan.2014 31 Dec. 2016 Market price 3,874,200.00
Textile research office building
Lucheng Rent of production
The Company 1 Jan.2014 31 Dec. 2016 Market price 1,860,000.00
Textile office building
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Lucheng
The Company Rent of exhibition hall 1 Jan.2014 31 Dec. 2016 Market price 224,400.00
Textile
Lucheng
The Company Rent of land 1 Jan.2013 31 Dec. 2015 Market price 1,897,800.00
Textile
Lucheng
The Company Rent of gas station 1 Jan.2014 31 Dec. 2016 Market price 263,400.00
Textile
Rent of land and
Luqun Land The Company 1 Jan.2013 31 Dec. 2015 Market price 901,200.00
buildings
Lufeng
Lucheng
Weaving & Rent of houses 1 Jan.2013 31 Dec. 2015 Market price 348,600.00
Textile
Dyeing
Note:
(3) Related-party call loan
Unit: RMB Yuan
Amount of call
Related party Initial date Due date Note
loan
Loan from banks and other financial institutions
Accounts borrowed by Luqun Textile in last
Lucheng Textile 6,000,000.00 23 Jan. 2014 27 Jan. 2014
year had all paid in this year
Accounts borrowed by Luqun Textile in last
Lucheng Textile 6,000,000.00 24 Jan. 2014 27 Jan. 2014
year had all paid in this year
Lending to banks and other financial institutions
(4) Information about assets transfer, debt reorganization of related parties
Unit: RMB Yuan
Type of Pricing principle Reporting period Same period of last year
related Content of the for the
Related party Proportio Proportio
party transaction related-party Amount Amount
n (%) n (%)
transaction transaction
Purchase of
Luqun Land Purchase Commercial Market price 31,416,086.66 100.00%
houses and shops
Limin Purified Purchase of
Purchase Market price 2,399.67 0.01%
Water storage bucket
5. Amounts due from/to related parties
Amount due from related parties
Unit: RMB Yuan
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Closing balance Opening balance
Name Related party Provision for bad Provision for bad
Book balance Book balance
debts debts
Amount due to related parties
Unit: RMB Yuan
Name Related party Closing balance Opening balance
Accounts payable Lucheng Textile 379,326.00 377,246.00
Accounts payable Taimei Ties 100,485.00 100,485.00
IX. Share-based Payment
1. Overview of share-based payment
Unit: RMB Yuan
Total of each equity instrument expired in the
0.00
reporting period
Scope of excising price and remaining contract term
of stock options that externally issued as at the RMB 5.025/share; 4,161,000 shares
period-end
Notes:
"Luthai Textile Co., Ltd. 2011 Restricted Stock Incentive Plan (revised draft)" (hereinafter referred to as "Incentive Plan") has been
passed in the Company’s 2011 second extraordinary general meeting, and its main content is as follows:
(1) The category of the underlying stocks: The underlying stocks of the incentive target awarded by the incentive plan were the
Luthai Textile limited stocks.
(2) The source of the underlying stocks: The source of the underlying stocks of the incentive target awarded by the incentive plan was
the RMB common shares (A shares) of Luthai Textile that the Company issued directionally to the incentive target.
(3) The incentive target: Through the statistics of the Remuneration and Appraisal Committee and the audition of the boards of
supervisors, the staff amounted to 344 people, who met with the qualification of the incentive target of this plan, would be 2.15% of
the Luthai Textile staff as to 31 Dec. 2013, including one direct relative of the actual controller.
(4) Notes of the restricted period plan of the stocks: The term of validity of this incentive plan was 48 months, and would be counted
from the date of award of the underlying stocks. The lock-up period of the limited stocks, which the Company awarded to the
incentive target, would be 12 months counted from the date of award. During the lock-up period, the limited stocks which were
owned by the incentive target through this plan would not be transferred. The unlocking period was 36 months after the lock-up
period and during which, if met with the unlocking situations of this incentive plan, the incentive target could unlock the stocks of
three times application, which were 12 months, 24 months, 36 months after the date of award respectively, and would receive 40%,
30%, 20% respectively of the total of the limited stocks by applying unlock.
(5) The unlock conditions: The plan awarded the incentive target of three-term unlock of the limited stocks, of which met with the
unlock conditions during the unlocking period; the incentive target could apply for the unlocking as well as the listing and circulating
of the stocks. The arrangement of the unlocking and the performance conditions of the Company would be listed as the form below:
Unlocking arrangement Performance conditions Unlocking proportion
The first unlocking after The rate of the 2011 net assets profits was not less than the twice 40%
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
12 months of the award of the average level of the listed companies of same industry;
date the growth rate of the 2011 net profits was not less by 15% than
2011; the net amount of the 2011 operating cash flow was not less
than the current net profit.
The second unlocking The rate of the 2012 net assets profits was not less than the twice 30%
after 24 months of the of the average level of the listed companies of same industry;
award date the growth rate of the 2012 net profits was not less by 25% than
2011; the net amount of the 2012 operating cash flow was not less
than the current net profit.
The third unlocking after The rate of the 2013 net assets profits was not less than the twice 30%
36 months of the award of the average level of the listed companies of same industry;
date the growth rate of the 2013 net profits was not less by 35% than
2011; the net amount of the 2013 operating cash flow was not less
than the current net profit.
The net profit deducting the non-recurring gains and losses belong to the shareholders of the Company during each year of 2011 and
2013 were not less than the average level of the current three accounting years (2008, 2009, and 2010) before the award date and at
the same time should not be negative. When calculating the growth rate of the net profits, the index of the net profits should base on
the lower one of the “net profits belong to the shareholder of the listed companies” and the “net profits deducting of the non-recurring
gains and losses belongs to the listed companies”.
The incentive target applies for the unlocking of the limited stocks awarded according this plan, should meet with the following
conditions in addition to meeting with the Company’s performance conditions listed above:
The Company had not happened each of the following situations yet: Had been issued by the CPA of the negative advice or the CPA
could not offer any advice for any of the financial and accounting report of current accounting year; had been sentenced of
administrative penalties by the CSRC of the significant violation behaviors within one year; and the other situations that the CSRC
considered not to carry out the incentive plan of the limited stocks.
The incentive target had not happened each of the following situations: During the current three years had been condemned in public
or been announced as unsuitable candidate by Securities Exchange; during the current three years had been sentenced f
administrative penalties by the CSRC of the significant violation behaviors; had the situation set by the” Corporation Law” that not
to take charge of the directors, supervisors and senior managers; the incentive target ended the labor contract unilateral before the
compliment of this plan; the Company had sufficient evidences that could prove the violations, or serious dereliction of duty,
malfeasance that had ruined the Company’s interests as well as the reputation by the misappropriation of funds, job occupation, theft,
leakage of the management and technical secrets, which led the great losses of the Company; the performance appraisal passed of the
last year before the unlocking of the incentive target was according to the “Implementation Assessment Methods of The Incentive
Plan of The Limited Stocks of Luthai Textile Co., Ltd.”.(6) The awarded quantity and price of the limited stocks: The amount of the
limited stocks of the incentive target awarded by the incentive plan is 14,090,000 shares, and the awarded price is RMB 5.025.
The 23rd meeting of the sixth board of directors of the company reviewed and passed the resolution of Motion about the Repurchase
Cancellation of the Restricted Stocks Have Been Granted to the Original Incentive Targets Does Not Comply with the Incentive Targ
et Excitation Conditions on Aug. 13, 2012. The original incentive targets Liu Qingchun and Shi Qian do not comply with the Article
1 of the restricted stock incentive plan of the company, The Unlock arrangement and Assessment Conditions of Restricted Stock beca
use they had left their jobs in the assessment period. Thus the company repurchased and canceled all the 60,000.00 shares had grante
d to them with RMB 5.025 per share.
The 23rd meeting of the sixth board of directors of the company passed Motion about the Restricted stocks Can Be Unlocked in the
First Unlock Period of the Incentive Plan. 40% of the restricted stocks, 5.612 million shares, were unlocked for the first patch.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
On 27 Mar. 2013, the 26th Meeting of the 6th Board of Directors was held, which reviewed and approved the
Repurchase Cancellation of the Motion Does Not Comply with the Incentive Target Excitation Conditions of Restricted Stock Have
Been Granted but Not Yet Unlocked and the About the Repurchase Cancellation of the Motion of Restricted Stock Have Not Yet been
Unlocked in Second Unlock Period, and the Company repurchased the restricted shares that didn’t meet with the unlock conditions
of 4,257,000 shares.
As of 30 Jun. 2014 the restricted stocks had not yet been unlocked were 4.161 million shares.
2. Information of equity-settled share-based payment
Unit: RMB Yuan
Recognition method on fair value of equity instruments at the
The closing price of A-share on the day before the grant day
grant date
Recognition method on the best estimate of the number of Whether employee service conditions and non-market conditions
vesting equity instruments in incentive plan of the Company meet with the best estimate
Accumulated amount of equity-settled share-based payment in
65,313,849.14
capital reserves
Total expense recognized for the equity-settle share-based
65,313,849.14
payment
Notes:
X. Contingency
1. Contingent liabilities and its financial effect arising from loan guarantee offered to other companies
As to 30 Jun. 2014, information about physical assets pledged by controlled subsidiaries for the purpose of acquiring bank
Company Pledged asset Asset value Acquired loan Term of borrowing
Xinjiang Luthai Inventory 78,644,581.97 75,000,000.00 2013.12.18-2014.9.17
Other contingent liabilities and its financial effect:
XI. Commitments
1. Significant commitments
Item Closing balance Opening balance
Commitments signed but hasn’t been recognized in
financial statements
- Commitment for constructing and purchasing long-term 15732.25 17,936.43
assets
Total 15732.25 17,936.43
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
2. Fulfillment of prior commitments
Item Contracted amount (RMB Ten Fulfillment of prior commitments
thousand)
- Commitment for constructing and purchasing long-term 17,936.43 Fulfilled
assets
XII. Notes of other significant events
1. Assets and liabilities measured at fair value
Unit: RMB Yuan
Gains and losses Accumulated
Accrued
from the changes in changes in fair
Item Opening amount impairment in the Closing amount
fair value in the value recorded in
reporting period
reporting period equity
Financial assets
2. Derivative financial
29,949,120.00 -29,949,120.00
assets
Total of the above items 29,949,120.00 -29,949,120.00
Financial liabilities 29,949,120.00 0.00
2. Derivative financial
0.00 1,050,030.00 1,050,030.00
assets
2. Foreign currency financial assets and liabilities
Unit: RMB Yuan
Gains and losses Accumulated
Accrued
from the changes in changes in fair
Item Opening amount impairment in the Closing amount
fair value in the value recorded in
reporting period
reporting period equity
Financial assets
2. Derivative financial
29,949,120.00 -29,949,120.00
assets
3. Loans and accounts
698,704,007.32 551,052,632.23
receivable
Subtotal of financial 728,653,127.32 -29,949,120.00 551,052,632.23
138
2014 Semi-annual Report of Luthai Textile Co., Ltd.
assets
Financial liabilities 480,026,140.14 1,050,030.00 695,799,519.17
XIII. 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 Book balance Provision for bad debts
Category
Proportio Proporti Proportion Proporti
Amount Amount Amount Amount
n (%) on (%) (%) on (%)
Accounts receivable for which bad debt provisions are made on the group basis
Aging group 224,406,704.88 100.00% 18,659,658.13 8.32% 285,486,751.57 100.00% 19,746,037.08 6.92%
Subtotal of groups 224,406,704.88 100.00% 18,659,658.13 8.32% 285,486,751.57 100.00% 19,746,037.08 6.92%
Total 224,406,704.88 -- 18,659,658.13 -- 285,486,751.57 -- 19,746,037.08 --
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 Provision for bad Provision for bad
Proporti Proporti
Amount debts Amount debts
on (%) on (%)
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 169,432,364.52 75.50% 8,471,618.22 237,997,888.02 83.37% 11,899,894.40
Subtotal of
169,432,364.52 75.50% 8,471,618.22 237,997,888.02 83.37% 11,899,894.40
within 1 year
1-2 years 20,091,308.09 8.95% 2,009,130.81 24,579,407.97 8.61% 2,457,940.80
2-3 years 22,860,005.84 10.19% 4,572,001.17 14,846,347.94 5.20% 2,969,269.59
Over 3 years 12,023,026.43 5.36% 3,606,907.93 8,063,107.64 2.82% 2,418,932.29
合计 224,406,704.88 -- 18,659,658.13 285,486,751.57 -- 19,746,037.08
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:
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
□ Applicable √ Inapplicable
Accounts receivable with insignificant single amount but independently withdrawn bad debts provision
□ Applicable √ Inapplicable
(2) Information of the top 5 accounts receivable:
Unit: RMB Yuan
The relationship
Name of entity with the Amount Aging Proportion
Company
Controlling Within 1 year, 1-3 year, over 3
Customer A 80,285,826.33 35.78%
subsidiary year
Non-related
Customer B 15,803,894.10 Within 1 year 7.04%
customer
Non-related
Customer C 14,898,419.82 Within 1 year 6.64%
customer
Non-related
Customer D 9,463,048.24 Within 1 year 4.22%
customer
Non-related
Customer E 7,123,817.36 Within 1 year 3.17%
customer
Total -- 127,575,005.85 -- 56.85%
（3）Accounts receivable due to the related parties
Unit: RMB Yuan
Occupancy rate of the total
Name of company Relationship with the Company Amount amount of accounts receivable
(%)
Beijing Innovative Controlling subsidiary 80,285,826.33 35.78%
Lufeng Yangguang Wholly-owned subsidiary 2,825,445.18 1.26%
Luthai (HongKong) Wholly-owned subsidiary 578,592.21 0.25%
Total -- 83,689,863.72 37.29%
2. Other accounts receivable
(1) Other accounts receivable
Unit: RMB Yuan
Closing balance Opening balance
Provision for bad
Category Book balance Provision for bad debts Book balance
debts
Amount Proportio Amount Proporti Amount Proportio Amount Proport
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
n (%) on (%) n (%) ion (%)
Other accounts receivable for which bad debt provisions are made on the group basis
Aging group 32,265,667.02 100.00% 3,775,412.16 11.70% 36,913,460.94 100.00% 3,838,305.26 10.40%
Subtotal of the groups 32,265,667.02 100.00% 3,775,412.16 11.70% 36,913,460.94 100.00% 3,838,305.26 10.40%
Total 32,265,667.02 -- 3,775,412.16 -- 36,913,460.94 -- 3,838,305.26 --
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
Proporti Bad debt provision Proporti Bad debt provision
Amount Amount
on (%) on (%)
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 19,098,870.80 59.19% 954,943.54 22,633,947.99 61.32% 1,131,697.40
Subtotal for
those aging 19,098,870.80 59.19% 954,943.54 22,633,947.99 61.32% 1,131,697.40
within 1 year
1-2 years 3,185,670.08 9.88% 318,567.01 5,220,951.83 14.14% 522,095.18
2-3 years 4,924,362.34 15.26% 984,872.47 5,330,556.60 14.44% 1,066,111.32
Over 3 years 5,056,763.80 15.67% 1,517,029.14 3,728,004.52 10.10% 1,118,401.36
Total 32,265,667.02 -- 3,775,412.16 36,913,460.94 -- 3,838,305.26
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) Other accounts receivable due to the top five units
Unit: RMB Yuan
Name of company Relationship Amount Term Proportion (%)
Controlling Within 1 year, 1-2 year; 2-3years,over
Customer A 16,459,036.23 51.01%
subsidiary 3 years
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Non-related
Customer B 3,361,619.67 Within 1 year 10.42%
customer
Non-related
Customer C 1,515,009.47 Within 1 year, 2-3years,over 3 years 4.70%
customer
Non-related
Customer D 1,458,593.50 2-3years,over 3 years 4.52%
customer
Customer E Subsidiary 1,233,021.12 Within 2 years 3.82%
Total -- 24,027,279.99 -- 74.47%
(3) Other account receivable due from related parties
Unit: RMB Yuan
Name of company Relationship Amount Proportion (%)
Shanghai Luthai Textile &
Wholly-owned subsidiary 16,459,036.23 51.01%
Garments Co., Ltd.
Luthai Textile (Cambodia)
Wholly-owned subsidiary 1,233,021.12 3.82%
Company
Luthai Textile ( America)
Wholly-owned subsidiary 1,052,193.40 3.26%
Company
Total -- 18,744,250.75 58.09%
3. Long-term equity investments
Unit: RMB Yuan
Explanati
ons on
Withdraw
difference
al amount
s between
of Cash
Sharehold Voting sharehold Provision
Accounti Initial impairme bonus in
The Opening Increase/ Closing ing right ing for
ng investmen nt the
investee balance decrease balance Proportio Proportio proportio impairme
method t cost provision reporting
n n n and nt loss
in the period
voting
reporting
right
period
proportio
n
Beijing
Cost 25,200,00 25,200,00 25,200,00
Innovativ 60.00% 60.00%
method 0.00 0.00 0.00
e
Xinjiang Cost 117,342,3 117,342,3 117,342,3 59.92% 59.92%
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Luthai method 16.95 16.95 16.95
Xinsheng Cost 176,340,7 176,340,7 176,340,7
100.00% 100.00%
Power method 37.93 37.93 37.93
Lufeng
Cost 529,620,0 529,620,0 529,620,0
Weaving 75.00% 75.00%
method 00.00 00.00 00.00
& Dyeing
Luqun Cost 171,784,5 171,784,5 171,784,5
100.00% 100.00%
Textile method 50.00 50.00 50.00
Luthai
Cost 6,366,600 6,366,600 6,366,600
(Hong 100.00% 100.00%
method .00 .00 .00
Kong)
Lufeng Cost 15,000,00 15,000,00 15,000,00
100.00% 100.00%
Sunshine method 0.00 0.00 0.00
Shanghai Cost 5,000,000 5,000,000 5,000,000
100.00% 100.00%
Luthai method .00 .00 .00
Rongchan
Cost 55,282,60 55,282,60 55,282,60
g 5.56% 5.56%
method 0.00 0.00 0.00
Pharmacy
Luthai
Textile Cost 40,717,20 40,717,20 40,717,20
100.00% 100.00%
(Cambodi method 3.38 3.38 3.38
a)
Luthai
Textile Cost 2,442,920 2,442,920 2,442,920
100.00% 100.00%
( America method .00 .00 .00
)
Luthai Cost 4,500,000 4,500,000 4,500,000
90.00% 90.00%
Youxian method .00 .00 .00
1,149,596 1,101,936 47,660,12 1,149,596
Total -- -- -- --
,928.26 ,804.88 3.38 ,928.26
Note:
4. Revenue and Cost of Sales
(1) Revenue of Sales
Unit: RMB Yuan
Item Reporting period Same period of last year
Main business revenue 2,245,002,336.27 2,149,366,934.57
Other business revenue 73,197,187.83 76,814,496.53
Total 2,318,199,524.10 2,226,181,431.10
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Cost of sales 1,597,127,786.85 1,593,126,834.70
(2) Main business (Classified by industry)
Unit: RMB Yuan
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
Textile and garment 2,245,002,336.27 1,544,161,311.27 2,149,366,934.57 1,534,288,708.43
Total 2,245,002,336.27 1,544,161,311.27 2,149,366,934.57 1,534,288,708.43
(3) Main business (Classified by product)
Unit: RMB Yuan
Reporting period Same period of last year
Name of products
Revenue of sales Costs of sales Revenue of sales Costs of sales
Fabric products 1,700,891,494.03 1,171,493,752.20 1,610,809,430.54 1,151,606,625.83
Shirts 544,110,842.24 372,667,559.07 538,557,504.03 382,682,082.60
Total 2,245,002,336.27 1,544,161,311.27 2,149,366,934.57 1,534,288,708.43
(4) Main business (Classified by area)
Unit: RMB Yuan
Reporting period Same period of last year
Name of area
Revenue of sales Costs of sales Revenue of sales Costs of sales
Hong Kong 195,398,661.01 134,570,645.03 154,730,748.77 110,617,012.29
Japan and Korea 174,204,861.14 119,547,805.07 199,291,512.71 141,960,176.81
Southeast Asia 468,708,066.05 322,785,166.24 465,940,349.00 333,094,532.71
Europe and America 443,862,118.36 304,494,908.56 447,481,616.09 318,462,117.03
Other 345,212,607.34 237,636,796.45 305,073,691.44 218,008,009.14
Domestic 617,616,022.37 425,125,989.92 576,849,016.56 412,146,860.45
Total 2,245,002,336.27 1,544,161,311.27 2,149,366,934.57 1,534,288,708.43
(5) Revenue of sales from the top five customers
Unit: RMB Yuan
Proportion of total
Customers Total revenue of sales
revenue of sales (%)
Customer A 205,006,255.65 8.84%
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Customer B 167,685,560.39 7.23%
Customer C 103,174,093.40 4.45%
Customer D 112,936,651.64 4.87%
Customer E 92,360,592.12 3.99%
Total 681,163,153.20 29.38%
Notes:
5. Investment income
(1) List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Investment income received from disposal of trading
18,121,509.04 17,735,127.42
financial assets
Total 18,121,509.04 17,735,127.42
6. Supplemental information of Cash Flow Statement
Unit: RMB Yuan
Same period of last
Supplemental information Reporting period
year
1. Reconciliation of net profit to net cash flows generated from operations： -- --
Net profit 398,449,628.68 345,109,595.06
Add: Provision for assets impairments -1,149,272.05 -504,581.85
Depreciation of fixed assets, oil and gas assets and productive biological
82,144,196.87 73,998,404.85
assets
Amortization of intangible assets 3,732,612.54 3,289,523.41
Amortization of long-term unamortized expense 2,038,578.46 -2,268,954.00
Losses/gains on disposal of fixed assets, intangible assets and other long-term
25,806,330.00 6,059,541.00
assets (gains: negative)
Abandonment losses of fixes assets (gains: negative) -5,434,964.09 4,178,029.57
Losses/gains from variation of fair value (gains: negative) -18,121,509.04 -17,735,127.42
Financial cost (income: negative) 1,370,266.44 1,791,039.57
Investment loss (gains: negative) -3,758,580.00 -908,931.15
Decrease in deferred tax assets (increase: negative) -237,752,529.06 -127,557,371.97
Increase in deferred tax liabilities (decrease: negative) -50,597,496.80 -13,284,386.32
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Decrease in inventory (increase: negative) 15,146,314.63 81,625,404.78
Net cash flows generated from operating activities 211,873,576.58 353,792,185.53
2. Significant investing and financing activities without involvement of cash
-- --
receipts and payments
3. Change of cash and cash equivalent: -- --
Closing balance of cash 318,571,493.89 313,065,949.09
Less: opening balance of cash 503,157,687.92 559,095,505.76
The net increase in cash and cash equivalents -184,586,194.03 -246,029,556.67
XIII. Supplemental information
1. List of current non-recurring gains and losses
Unit: RMB Yuan
Item Amount Note
Loss and gains on disposal of non-current assets (Including write-off part of the
-2,003,634.07
provision for asset impairment)
Governmental subsidy included in the current profits and losses(is closely
related with the business event, except for the governmental subsidy that 17,088,515.19
according to the national unity standard quota or the quantitative regal assets)
In addition to the valid hedging activity associated with the normal operation of
the Company, the changes in fair value through gains or losses which arising
from the holding trading financial assets and the trading financial liabilities as
-9,840,200.92
well as the investment income that earning from the disposal of trading
financial assets, trading financial liabilities and available-for-sale financial
assets
Income and expenses of the other operation except for the mentioned above 1,646,765.12
Less: the effect of income tax 5,916,961.71
The effect of minority interest (after tax) 90,785.20
Total 883,698.41 --
The governmental subsidies accrued into the current gains and losses were the recurrent gains and losses item, and should disclose
the reorganization reason term by term.
□ Applicable √ Inapplicable
2. Accounting data differences according to the domestic and foreign accounting standards
(1) Different situations of the net profits and net assets in the financial disclosure reports in accordance wit
h the international accounting standards and Chinese accounting standards at the same time
Unit: RMB Yuan
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
Net profits belongs to the shareholders of the listed Net assets belongs to the shareholders of the
companies listed companies
Current period amount Last period amount Closing balance Opening balance
According China Accounting Standards 476,880,256.93 416,175,890.38 6,106,473,928.72 5,988,054,133.73
Items and amounts adjusted in accordance with international accounting standards
The influence of the
purchasing of the domestic
equipment for tax recognized 754,500.00 842,500.00 -2,539,500.00 -3,294,000.00
to deferred incomes according
to International Accounting Standards
According to International Accounting
477,634,756.93 417,018,390.38 5,985,514,633.73 5,984,760,133.73
Standards
(2) Notes of the reasons of the differences between the accounting data according to the domestic and
foreign accounting standards
Influences of the domestic equipments which offset the income tax of enterprises
The Company enjoyed the offset of the enterprises income tax when purchasing domestic equipments, and would directly decreased
the income taxes expenses according to China Accounting Standards, and at same time be recognized as the deferred income related to the
assets according to International Accounting Standards. According to the rules of International Accounting Standards, the Company would amortization the differences by terms
according to the fixed assets, to adjust the net profits and net assets.
3. Return on equity and earnings per share
Unit: RMB Yuan
The weighted average ROE EPS
Profit in the reporting period
(%) Basic EPS Diluted EPS
Net profit distributable to the Company's common stock
7.81% 0.50 0.50
shareholders
Net profit distributable to shareholders of the Company's
common stock after deducting non-recurring gains and 7.79% 0.50 0.50
losses
4. Particulars on the abnormal situation of main items in the financial statements of the Company and
relevant reasons
1. As on 30 Jun. 2014, the closing amount of monetary capital was RMB 470,252,156.06, down by 46.10% over
that of opening period, which was mainly due to the payment of raw materials purchase.
2. As on 30 Jun. 2014, the closing amount of tradable financial assets was RMB 0.00, down by 100% over that
of opening period, which was mainly due to tradable financial assets due for delivery and change in fair value.
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2014 Semi-annual Report of Luthai Textile Co., Ltd.
3. As on 30 Jun. 2014, the closing amount of account receivable was RMB 190,552,240.18, down by 32.05%
over that of opening period, which was mainly due to the recover of account receivable.
4. As on 30 Jun. 2014, the closing amount of progress in construction was RMB298,987,510.15 up by 31.16%
over that of opening period, which was mainly due to the investment in project of A new 230,000-spindle
production line project and a new 35,000-ingot two-for-one twisting production line project and Clothing
project of Luthai (Cambodia) increased.
5. As on 30 Jun. 2014, the closing amount of engineering material was RMB 61,342,832.85, up by 221.26%
over that of opening period, which was mainly due to the increase of equipment for installing.
6. As on 30 Jun. 2014, the closing amount of note payable was RMB 6,618,500.87, down by 35.20% over that of
opening period, which was mainly due to note payment at maturity.
7. As on 30 Jun. 2014, the closing amount of account payable was RMB 218,808,759.48, down by 45.31% over
that of opening period, which was mainly due to the decrease of accounts payable for raw materials purchase.
8. As on 30 Jun. 2014, the closing amount of tax payable was RMB 76,546,689.53, down by 33.58% over that
of opening period, which was mainly due to the decrease of urban maintenance and construction tax and
educational surtax.
9. As on 30 Jun. 2014, the closing amount of interest payable was RMB 2,304,412.25, up by 53.68% over that
of opening period, which was mainly due to the increase of interest recorded caused by the increase of parent
company’s borrowing.
10. As on 30 Jun. 2014, the closing amount of non-current liabilities due within one year was RMB
27,456,730.45, down by 67.83% over that of opening period, which was mainly due to the decrease of long
term loan due within one year.
11. As on 30 Jun. 2014, the closing amount of deferred income tax liabilities was RMB 2,077,537.33 down by
68.28% over that of opening period, which was mainly due to the decrease of taxable temporary differences
from fair value change of tradable financial assets.
12. From Jan- Jun. 2014, the financial expense was RMB 7,441,307.46, down by 69.42% over that of last period,
which was mainly due to the decrease of interest expense.
13. From Jan- Jun. 2014, the assets impairment loss was RMB -5,235,486.56, down by 79.17% over that of last
period, which was mainly due to the decrease of provision for bad debt caused by the decrease of account
receivable.
14. From Jan- Jun. 2014, gains from the changes in the fair value was RMB-30,999,150.00 down by 1703.87%
over that of last period, which was mainly due to changes of gains from the changes in the fair value and fair
value of tradable financial assets relatively carried-over and originally recognized by the disposal of maturity
tradable financial assets.
15. From Jan- Jun. 2014, non-operating expense was RMB 3,095,122.00 up by 250.22% over that of last period,
which was mainly due to the increase of fixed assets disposal loss.
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Section X. Documents for Reference
I. Accounting statement signed by legal representative, responsible person in charge of accounting work and
responsible person of accounting department;
2. The originals of all documents and manuscripts of Public Notices of the Company disclosed publicly on
Securities Times, Shanghai Securities News and Ta Kung Pao.
The Chairman of the Board:
Lu Thai Textile Co., Ltd.
13 Aug. 2014
149
