Lu Thai Textile Co., Ltd. First Quarterly Report 2021 LU THAI TEXTILE CO., LTD. FIRST QUARTERLY REPORT 2021 April 2021 1 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Part I Important Notes The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Lu Thai Textile Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. All the Company’s directors have attended the Board meeting for the review of this Report and its summary. Liu Zibin, the Company’s legal representative, Zhang Hongmei, the Company’s Chief Accountant, and Zhang Keming, the Company’s Financial Manager hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete. This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail. 2 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Part II Key Corporate Information I Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No Q1 2021 Q1 2020 Change (%) Operating revenue (RMB) 993,485,161.79 1,252,428,965.20 -20.68% Net profit attributable to the listed company’s shareholders 74,530,850.40 103,518,808.50 -28.00% (RMB) Net profit attributable to the listed company’s shareholders 15,513,465.07 103,615,262.08 -85.03% before exceptional items (RMB) Net cash generated from/used in operating activities (RMB) -36,745,428.28 145,916,523.77 -125.18% Basic earnings per share (RMB/share) 0.09 0.12 -25.00% Diluted earnings per share (RMB/share) 0.09 0.12 -25.00% Weighted average return on equity (%) 0.96% 1.33% -0.37% 31 March 2021 31 December 2020 Change (%) Total assets (RMB) 12,197,752,223.47 12,129,903,960.65 0.56% Equity attributable to the listed company’s shareholders 7,774,522,551.24 7,687,577,590.72 1.13% (RMB) Exceptional gains and losses √ Applicable □ Not applicable Unit: RMB Item Q1 2021 Note Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) 59,394,526.45 Government subsidies charged to current profit or loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per the government’s uniform 12,470,516.19 standards) Gain or loss on fair-value changes in held-for-trading financial assets and liabilities, as well as derivative financial assets and liabilities & income from disposal of held-for-trading financial assets -591,341.11 and liabilities, derivative financial assets and liabilities, as well as investments in other debt obligations (exclusive of effective portion of hedges that arise in the Company’s ordinary course of business) Non-operating income and expense other than the above -1,879,517.36 Less: Income tax effects 10,098,853.35 Non-controlling interests effects (net of tax) 277,945.49 Total 59,017,385.33 -- 3 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: □ Applicable √ Not applicable No such cases for the Reporting Period. II Total Number of Shareholders and Holdings of Top 10 Shareholders at 31 March 2021 1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders Unit: share Number of ordinary shareholders at Number of preferred shareholders with resumed voting rights at 57,260 0 the period-end the period-end (if any) Top 10 shareholders Shares in pledge or Nature of Shareholdin Total shares Restricted Name of shareholder frozen shareholder g percentage held shares held Status Shares Domestic Zibo Lucheng Textile Investment Co., Ltd. non-state-owned 16.36% 140,353,583 0 legal person Tailun (Thailand) Textile Co., Ltd. Foreign legal person 13.78% 118,232,400 118,232,400 Central Huijin Assets Management Co., State-owned legal 2.37% 20,315,300 Ltd. person Domestic ICBC Credit Suisse Double Interest Bond non-state-owned 1.28% 10,999,958 Securities Investment Fund legal person Domestic National Social Security Fund Portfolio 413 non-state-owned 1.10% 9,480,051 legal person Dajia Life Insurance Co. Ltd.-Universal Other 0.86% 7,348,835 Products Zhong Ou China Securities Asset Other 0.61% 5,235,900 Management Plan Dacheng China Securities Asset Other 0.61% 5,235,900 Management Plan Harvest China Securities Asset Other 0.61% 5,235,900 Management Plan GF China Securities Asset Management Other 0.61% 5,235,900 Plan 4 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Top 10 unrestricted shareholders Shares by type Name of shareholder Unrestricted shares held Type Shares RMB-denominate Zibo Lucheng Textile Investment Co., Ltd. 140,353,583 d ordinary stock RMB-denominate Central Huijin Assets Management Co., Ltd. 20,315,300 d ordinary stock ICBC Credit Suisse Double Interest Bond Securities RMB-denominate 10,999,958 Investment Fund d ordinary stock RMB-denominate National Social Security Fund Portfolio 413 9,480,051 d ordinary stock RMB-denominate Dajia Life Insurance Co. Ltd.-Universal Products 7,348,835 d ordinary stock RMB-denominate Zhong Ou China Securities Asset Management Plan 5,235,900 d ordinary stock RMB-denominate Dacheng China Securities Asset Management Plan 5,235,900 d ordinary stock RMB-denominate Harvest China Securities Asset Management Plan 5,235,900 d ordinary stock RMB-denominate GF China Securities Asset Management Plan 5,235,900 d ordinary stock RMB-denominate China China Securities Asset Management Plan 5,235,900 d ordinary stock Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder of the Company and the actual controller. Tailun (Thailand) Textile Co., Ltd. is the Related or acting-in-concert parties among the second largest shareholder as well as sponsor of foreign capital of the shareholders above Company. All of other shareholders are people holding public A share and the Company is not able to confirm whether there is associated relationship or concerted action among other shareholders. Top 10 shareholders involved in securities margin Naught trading (if any) Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yes √ No No such cases in the Reporting Period. 2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable 5 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Part III Significant Events I Changes in Key Financial Statement Line Items and Explanation of why √ Applicable □ Not applicable Item 31 March 2021 31 December 2020 Change Reason for change Prepayments 76,377,931.28 19,611,775.28 289.45% Increase in prepayments for cotton Recognition of right-of-use assets according to the new accounting Right-of-use assets 49,059,102.53 - 100.00% standard governing leases adopted in the current period Other non-current assets 164,333,330.32 95,434,040.18 72.20% Increase in prepayments for land Recognition in the current period of income from the relocation Other current liabilities 68,221,106.95 192,574,674.68 -64.57% compensation received in the last period Item Q1 2021 Q1 2020 Change Reason for change Reclassification of transportation Selling expense 22,876,675.00 43,045,212.94 -46.85% expense and port expense from selling expense to costs of sales Decrease in interest expense and Finance costs 2,268,306.63 14,743,890.27 -84.62% increase in interest income Return on investment (“-” Transfer of held-for-trading financial 7,111,896.31 104,051,767.00 -93.17% for loss) assets in the same period of last year Reversal of recognized gains on Gain on changes in fair changes in the fair value of -10,376,010.56 -99,714,752.69 89.59% value (“-” for loss) held-for-trading financial assets in the same period of last year Credit impairment loss Decrease in the balance of accounts 14,759,025.50 1,490,082.33 890.48% (“-” for loss) receivable Asset impairment loss -6,272,617.88 -2,090,161.60 -200.10% Increase in inventory impairment loss (“-” for loss) Asset disposal income Recognition of relocation 59,394,526.45 -37,045.69 160427.76% (“-” for loss) compensation Non-operating expenses 2,288,330.70 1,540,546.20 48.54% Increase in donation expenditures Net cash generated Decrease in cash received from selling from/used in operating -36,745,428.28 145,916,523.77 -125.18% goods and rendering of services activities Net cash generated Increase in cash received from from/used in investing 16,210,324.93 -65,312,638.47 124.82% disinvestments activities 6 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Net cash generated Increase in short- and long-term from/used in financing 172,987,678.81 -17,426,491.61 1092.67% borrowings activities Net increase in cash and Increase in net cash generated from 159,279,909.02 61,713,008.55 158.10% cash equivalents financing activities II Progress, Influence and Solutions with regard to Significant Events √ Applicable □ Not applicable 1. On 9 April 2020, the Company issued 14 million A-share convertible corporate bonds (Luthai Convertible Bond for short; Code: 127016) on the Shenzhen Stock Exchange, which were traded at the price of RMB100 and the conversion price of RMB9.01 per share. The bonds were listed on SZSE on 13 May 2020. Due to the interest distribution for the year 2019 on 9 July 2020, the conversion price of Luthai Convertible Bond was adjusted from RMB9.01 per share to RMB8.91 per share. The conversion period of Luthai Convertible Bond started from 15 October 2020. From 1 January 2021 to the end of the first quarter in 2021, Luthai Convertible Bond saw a drop of RMB14,700.00 in value and a decrease of 147 in number, which were converted to 1,646 shares. By the end of the first quarter in 2021, the remaining value of the convertible bond reached RMB1,399,889,100.00 and the remaining number was 13,998,891. 2. On 12 April 2021, the Company held the 22nd Meeting of the 9th Board of Directors and the 13th Meeting of the 9th Supervisory Committee. The Restricted Stock Incentive Scheme (Draft) and Summary for 2021 and the Management Measures of Luthai Textile Co., Ltd. for the Enforcement and Assessment of the Restricted Stock Incentive Scheme for 2021 were reviewed and passed at those meetings and will be submitted to the 1st Extraordinary General Meeting of 2021 for deliberation. Overview of significant events Disclosure date Announcement index Refer to Announcement of Lu Thai Textile Co., Ltd. on Conversion of convertible bonds into 2 April 2021 Conversion of Convertible Bonds into Equity in Q1 2021 equity in Q1 2021 disclosed on 2 April 2021 on www.cninfo.com.cn for details. Refer to the Restricted Stock Incentive Scheme (Draft) and Restricted Stock Incentive Scheme for Summary for 2021 of Lu Thai Textile Co., Ltd. and relevant 13 April 2021 2021 put forward by the Company announcements disclosed on 13 April 2021 on www.cninfo.com.cn for details. Progress of any share repurchase: □ Applicable √ Not applicable Progress of any reduction of the repurchased shares through centralized bidding: □ Applicable √ Not applicable III Commitments that the Company’s Actual Controller, Shareholders, Related Parties, Acquirers, the Company Itself or Other Parties, Failed to Fulfill on Time during the Reporting Period √ Applicable □ Not applicable 7 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Date of Term of Fulfillme Commitment Promisor Type of commitment Details of commitment commitment commitme nt making nt Commitments made in share reform Commitments made in acquisition documents or shareholding alteration documents Commitments made in time of asset restructuring 1. It’s not allowed to interfere the operation and management activities of the Company excessively, and to encroach the interest of the Company. 2. From the issuance date of this commitment to the completion of the implementation of the Company's public offering of A-share convertible corporate bonds, if the CSRC makes other new regulatory provisions on remedial measures for returns and Controllin Dilution of immediate the commitment, and the above g return of public commitment fails to meet the 23 May Commitments made in 23 May shareholde issuance of A-share requirements of the CSRC, the 2019 to 8 Ongoing IPO or refinancing 2019 r, actual convertible corporate company/I promise to issue April 2026 controller bonds supplementary commitment then in accordance with the latest regulations of CSRC. 3. Commitment is made to fulfill the Company's relevant remedial measures for returns and any commitment made herein by the company/me. If the company/I violate(s) such commitment and cause(s) losses to the Company or investors, the company / I will bear the compensation responsibility to the Company or investors in accordance with the law. 8 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 1. Commitment is made not to transfer benefits to other units or individuals free of charge or under unfair conditions, and no other ways damaging the interests of the Company will be taken. 2. I will strictly abide by the budget management of the Company, and accept the strict supervision and management of the Company to avoid waste or excessive consumption. Any position-related consumption behaviors of myself will occur within the scope necessary for the performance of my duties. 3. Commitment is made not to use the Company's assets to engage in investment and consumption activities unrelated to The the performance of duties. 4. Dilution of immediate directors Commitment is made that the return of public 23 May and senior remuneration system developed by 23 May issuance of A-share 2019 to 8 Ongoing manager the Board of Directors or the 2019 convertible corporate April 2026 of the Remuneration Committee is linked bonds Company to the implementation of the Company's remedial measures for returns. 5. Commitment is made that the conditions for exercising the Equity Incentive Plan to be issued in the future will be linked to the implementation of the Company's remedial measures for returns. 6. From the issuance date of this commitment to the completion of the implementation of the Company's public offering of A-share convertible corporate bonds, if the CSRC makes other new regulatory provisions on remedial measures for returns and the commitment, and the above commitment fails to meet the requirements of the CSRC, I promise to issue supplementary 9 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 commitment then in accordance with the latest regulations of CSRC. 7. Commitment is made to fulfill the Company's relevant remedial measures for returns and any commitment made herein by me. If I violate such commitment and causes losses to the Company or investors, I will bear the compensation responsibility to the Company or investors in accordance with the law. Commitments made in stock option incentive Other commitments made to minority shareholders Fulfill on time or not Yes IV Financial Investments 1. Securities Investments □ Applicable √ Not applicable No such cases in the Reporting Period. 2. Investments in Derivative Financial Instruments √ Applicable □ Not applicable Unit: RMB’0,000 Proporti on of ending investm Actual Relation Beginni Purchas Sold in Impairm Related- Initial Ending ent gain/los ship Type of ng ed in the the ent Operato party investm Starting Ending investm amount s in the with the derivativ investm Reporti Reporti provisio r transacti ent date date ent in the Reporti Compan e ent ng ng n (if on amount amount Compan ng y amount Period Period any) y’s Period ending net assets Comme Non-rel No Forward 166,697 26 31 129,805 36,891. 18,053. 148,644 12.18% 471.6 10 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 rcial ated exchang .7 Novemb Decemb .79 91 28 .42 bank e er 2020 er 2021 settleme nt Comme Foreign 22 27 Non-rel 118,238. 56,088. 108,424 rcial No exchang October January 62,150 9,814.2 8.89% 3 ated 46 46 .26 bank e option 2020 2022 Forward Comme exchang 14 Non-rel 13,081. 1 April 13,081. rcial No e January 0 6,540.8 6,540.8 0.54% 14.91 ated 6 2021 6 bank transacti 2021 ons 298,017 191,955 106,061 34,408. 263,609 Total -- -- 21.61% 489.51 .76 .79 .97 28 .48 Funding source Self-funded Legal matters involved (if N/A applicable) Disclosure date of board of directors announcement on approval of 30 April 2020 derivative investment (if any) Disclosure date of general meeting of shareholders announcement on approval of 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. The Company had a complete risk control system for sufficient analysis and prevention of possible risks such as market risk, liquidity risk and credit risk, operation risk and risk of laws and regulation. Analysis of risks and control 1. Market risk: when the international and domestic economic situations change, the measures associated with derivative corresponding changes in exchange rates and interest rates may have an adverse impact on investments held in Reporting Period the financial derivatives transactions of the Company. Precautionary measures to be taken (including but not limited to market include: the Company chooses risk-controlled financial derivative tools with simple structure risk, liquidity risk, credit risk, and good liquidity to carry out the hedging business, strictly controls the scale of financial operational risk, legal risk, etc.) derivatives trading by staged operations, and adjusts the strategy according to market changes in a timely manner. 2. Liquidity risk and credit risk: a credit risk arising from failure of the contractually due Company or counterparty in performing the contract due to liquidity or factors other than liquidity. Precautionary measures to be taken include: the Company determines the upper limit of derivatives transaction amounts according to production and operation scale as well as foreign exchange income, and conducts operations by stage according to the budget of future collections and disbursement. The derivative trades are free 11 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 of guarantee deposit and can still be guaranteed in performance after the contract expires by means of extension and balance settlement etc. to prevent the Company from credit damages due to lack of liquidity. The Company selects financial institutions with strong capability and good reputation as a counterparty and signs standard derivative trading contracts to strictly control credit risk of the counterparty. 3. Operation risk: The derivatives had high specialty and complexity, so imperfect internal operation procedures, staffs and external events would make the Company to undertake risks during the transaction. Risk control measures: The Company promulgated strict authorization and approval system and perfect regulatory mechanism, fixed the operation procedures and approval procedures system to conduct derivative products transaction, implemented strict authorization and post checks and balances system, meanwhile, it improved the overall quality of relevant personnel through strengthening the professional ethics education and business training for them. Besides, it established the System of Reporting the Abnormal Situation Timely so as to ensure to lower the operation risks to the maximum. 4. Risk of laws and regulation: The Company conducted derivatives products transaction in strict accordance with relevant laws and rules, otherwise it was easy to cause compliant and regulatory risks existing in the validity and feasibility of contract, commitments and other legal documents signed. Risk control measures: The Company carefully studied and mastered laws, regulations and policies relevant to derivative products transaction business, tracked closely the relevant changes; the Company carried out financial derivative instruments transactions with financial institutions with the legal qualifications, tremendous strength and good reputation; and strengthened the compliant examination on derivative products transaction business to avoid possible law risks. The Company conducted derivative transaction business according to the relevant approval procedure, which was in line with relevant laws, regulations, the Company’s Articles of Association, the Management Rules for Securities Investment and Derivative Transaction of Lu Thai Textile Co., Ltd., and the Proposal on the Plan of Lu Thai Textile Co., Ltd. for Derivative Transactions approved at the 13th Meeting of the 9th Board of Directors on 28 April 2020, and performed relevant information disclosure responsibilities. 1. By 31 March 2021, the Company held 66 financial derivatives contracts that were not expired, valued at USD409.5 million. Among them, there were 37 forward settlements worth USD223 million, 28 foreign exchange option portfolios worth USD176.50 million and 1 Changes in market prices or fair forward foreign exchange trading worth USD10 million. value of derivative investments in 2. In the first quarter of 2021, a total of USD70 million financial derivatives matured, and Reporting Period (fair value analysis USD52 million were delivered with earnings of RMB4,895,100. USD18 million were should include measurement method extended. Among them, forward settlements worth USD45 million matured, and USD27 and related assumptions and million were delivered with earnings of RMB4,716,000. USD18 million were extended; all parameters) of the USD15 million matured foreign exchange option portfolios were delivered with earnings of RMB30,000; all of the forward foreign exchange trading worth USD10 million matured and were delivered, with earnings of RMB149,100. Major changes in accounting policies and specific accounting principles No significant changes adopted for derivative investments in 12 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Reporting Period compared to last reporting period The Company’s independent directors Zhou Zhiji, Pan Ailing, Wang Xinyu and Qu Dongmei, concerning conducting derivatives business, have issued the following professional advice: During the Reporting Period, the Company conducted derivatives trading based on relevant laws and regulations, the Articles of Association, the Management Opinion of independent directors on Rules for Securities Investment and Derivative Transaction of Lu Thai Textile Co., Ltd. The derivative investments and risk trading conformed to the Plan for Derivative Transactions approved by the Board of control Directors, and the operations were legitimate and compliant. While the normal trading and operations are guaranteed, the Company's derivatives trading funded with own funds helps to avoid risks of renminbi exchange rate, improve the ability to hedge against exchange rate volatility and will not damage the interests of the Company and all shareholders. V Progress of Projects Financed with Raised Funds □ Applicable √ Not applicable VI Operating Performance Forecast for January-June 2021 Warning of a forecast loss on or a forecast significant year-on-year change in the accumulative net profit from the beginning of the year to the end of the next reporting period, as well as explanation of why: □ Applicable √ Not applicable VII Significant Contracts Arising from the Company’s Ordinary Course of Business □ Applicable √ Not applicable VIII Cash Entrusted for Wealth Management √ Applicable □ Not applicable Unit: RMB’0,000 Unrecovered overdue Type Funding source Amount Undue amount amount Bank’s wealth Idle raised funds 60,254 27,500 0 management product Bank’s wealth Idle self-funded 52,143 17,697 0 management product Total 112,397 45,197 0 High-risk wealth management transactions with a significant single amount, or with low security, low liquidity or no principal protection: √ Applicable □ Not applicable 13 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 RMB’0,000 Whether Actual there is Amount of Typ recovery Amount wealth Overview of the Method of Annual actual Whether e of Estimate of profits withdrawn manageme item and the Name of Type of the Resource Ended Use of payment yield for profits or go through the Amount Initial date profit (if or losses impairmen nt related index for the trustee trustee of funds Date fund determinat referenc losses in stator prod any) in t provision entrustme inquiring (if ion e Reporting procedures uct Reporting (if any) nt plan in any) Period Period future or not One-off Refer to the Prin repayment related Agricultur cipal Bank of Recovery announcement Raised 1 July 8 January al Bank of Bank -prot 10,000 financial principal 3.50% 182.19 182.19 on 0 Yes Not yet (No.: 2020-051) funds 2020 2021 China ecte products and schedule disclosed on d interests at Cninfo on 23 maturity May 2020 One-off Refer to the Prin repayment related cipal 10 Bank of Recovery announcement Qishang Raised 11 March Bank -prot 2,754 December financial principal 3.50% 24.03 24.03 on 0 Yes Not yet (No.: 2020-051) Bank funds 2021 ecte 2020 products and schedule disclosed on d interests at Cninfo on 23 maturity May 2020 Prin One-off Refer to the cipal 10 Bank repayment Recovery related Qishang Raised 11 March Bank -prot 5,000 December financial of 3.50% 43.63 43.63 on 0 Yes Not yet announcement Bank funds 2021 ecte 2020 products principal schedule (No.: 2020-051) d and disclosed on 14 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 interests at Cninfo on 23 maturity May 2020 One-off Refer to the Prin repayment related Agricultur cipal 31 Bank of Recovery announcement Raised 25 March al Bank of Bank -prot 10,000 December financial principal 3.15% 72.49 72.49 on 0 Yes Not yet (No.: 2020-051) funds 2021 China ecte 2020 products and schedule disclosed on d interests at Cninfo on 23 maturity May 2020 One-off Refer to the Prin repayment related Agricultur cipal Bank of announcement Raised 22 January 16 April al Bank of Bank -prot 10,000 financial principal 3.30% 75.95 0- 0 Yes Not yet (No.: 2020-051) funds 2021 2021 China ecte products and disclosed on d interests at Cninfo on 23 maturity May 2020 One-off Refer to the Prin repayment related Agricultur cipal Bank of announcement Raised 30 March 25 June al Bank of Bank -prot 10,000 financial principal 3.70% 88.19 0- 0 Yes Not yet (No.: 2020-051) funds 2021 2021 China ecte products and disclosed on d interests at Cninfo on 23 maturity May 2020 Prin One-off Refer to the Agricultur Bank cipal Raised 30 March 25 June repayment related al Bank of Bank 5,000 financial 3.70% 44.1 0- 0 Yes Not yet -prot funds 2021 2021 of announcement China products ecte principal (No.: 2020-051) 15 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 d and disclosed on interests at Cninfo on 23 maturity May 2020 One-off Refer to the Prin repayment related cipal Bank of announcement Qishang Raised 19 March 22 June Bank -prot 2,500 financial principal 3.70% 24.08 0- 0 Yes Not yet (No.: 2020-051) Bank funds 2021 2021 ecte products and disclosed on d interests at Cninfo on 23 maturity May 2020 One-off Refer to the Prin repayment related cipal 16 Bank of Recovery announcement Qishang Raised 14 January Bank -prot 5,000 October financial principal 3.50% 43.15 43.15 on 0 Yes Not yet (No.: 2020-051) Bank funds 2021 ecte 2020 products and schedule disclosed on d interests at Cninfo on 23 maturity May 2020 One-off Refer to the Prin repayment related cipal 16 Bank of Recovery announcement Qishang Self-owne 14 January Bank -prot 3,000 October financial principal 3.50% 25.89 25.89 on 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 ecte 2020 products and schedule disclosed on d interests at Cninfo on 14 maturity August 2020 Prin One-off Refer to the 4 Bank Recovery Qishang cipal Self-owne 2 February repayment related Bank 5,000 November financial 3.50% 43.15 43.15 on 0 Yes Not yet Bank -prot d funds 2021 of announcement 2020 products schedule ecte principal (No.: 2020-059) 16 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 d and disclosed on interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal 11 Bank of Recovery announcement Qishang Self-owne 9 February Bank -prot 5,000 November financial principal 3.50% 43.15 43.15 on 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 ecte 2020 products and schedule disclosed on d interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal 10 Bank of Recovery announcement Qishang Self-owne 11 March Bank -prot 6,246 December financial principal 3.50% 54.5 54.5 on 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 ecte 2020 products and schedule disclosed on d interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal 10 Bank of Recovery announcement Qishang Self-owne 20 January Bank -prot 3,000 December financial principal 3.40% 11.18 11.18 on 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 ecte 2020 products and schedule disclosed on d interests at Cninfo on 14 maturity August 2020 Prin One-off Refer to the China 18 Bank Recovery cipal Self-owne 18 January repayment related Everbright Bank 5,000 December financial 2.70% 11.25 11.25 on 0 Yes Not yet -prot d funds 2021 of announcement Bank 2020 products schedule ecte principal (No.: 2020-059) 17 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 d and disclosed on interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal Bank of announcement Qishang Self-owne 9 February 18 May Bank -prot 3,697 financial principal 3.50% 34.74 0- 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 2021 ecte products and disclosed on d interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal 24 Bank of announcement Qishang Self-owne 29 June Bank -prot 7,000 February financial principal 3.60% 86.3 0- 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 ecte 2021 products and disclosed on d interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal Bank of announcement Qishang Self-owne 19 March 22 June Bank -prot 5,000 financial principal 3.70% 48.15 0- 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 2021 ecte products and disclosed on d interests at Cninfo on 14 maturity August 2020 Prin One-off Refer to the 19 Bank Recovery Qishang cipal Self-owne 7 January repayment related Bank 2,600 February financial 3.40% 10.41 10.41 on 0 Yes Not yet Bank -prot d funds 2021 of announcement 2021 products schedule ecte principal (No.: 2020-059) 18 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 d and disclosed on interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal Bank of Recovery announcement Qishang Self-owne 27 January 3 March Bank -prot 2,000 financial principal 3.40% 6.52 6.52 on 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 2021 ecte products and schedule disclosed on d interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal 24 Bank of Recovery announcement Qishang Self-owne 31 March Bank -prot 2,600 February financial principal 3.50% 8.73 8.73 on 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 ecte 2021 products and schedule disclosed on d interests at Cninfo on 14 maturity August 2020 One-off Refer to the Prin repayment related cipal Bank of announcement Qishang Self-owne 11 March 15 June Bank -prot 2,000 financial principal 3.60% 18.94 0- 0 Yes Not yet (No.: 2020-059) Bank d funds 2021 2021 ecte products and disclosed on d interests at Cninfo on 14 maturity August 2020 Total 112,397 -- -- -- -- -- -- 1,000.72 580.27 -- 0 -- -- -- 19 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Wealth management transactions with possible impairments including an expectedly unrecoverable principal: □ Applicable √ Not applicable IX Irregularities in the Provision of Guarantees □ Applicable √ Not applicable No such cases in the Reporting Period. 20 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 X Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. XI Communications with the Investment Community such as Researches, Inquiries and Interviews Received during the Reporting Period √ Applicable □ Not applicable Major Way of Type of discussion Communication Index to main information Date Place communica communication content and party communicated tion party information provided Refer to the Record of Basic Investor Relations Meeting room of Institutional information 31 March 2021 By phone Institution Activities disclosed on 1 the Company investors of the April 2021 on Company www.cninfo.com.cn 21 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by Lu Thai Textile Co., Ltd. 31 March 2021 Unit: RMB Item 31 March 2021 31 December 2020 Current assets: Monetary assets 1,560,547,741.68 1,400,478,034.81 Held-for-trading financial assets 208,949,164.24 268,456,216.98 Derivative financial assets Notes receivable 203,939,049.53 182,994,110.86 Accounts receivable 368,598,618.36 522,425,219.87 Accounts receivable financing 78,731,819.82 55,150,926.34 Prepayments 76,377,931.28 19,611,775.28 Other receivables 107,679,237.37 105,710,818.69 Including: Interest receivable Dividends receivable 75,488,652.49 75,488,652.49 Financial assets purchased under resale agreements Inventories 2,053,531,101.15 1,988,968,681.64 Contract assets Assets held for sale Current portion of non-current assets 46,187,513.72 45,750,018.30 Other current assets 334,182,823.00 433,432,258.63 Total current assets 5,038,725,000.15 5,022,978,061.40 Non-current assets: Investments in other debt obligations Long-term receivables 41,494,018.13 41,053,183.15 Long-term equity investments 135,408,217.73 138,079,577.25 Investments in other equity instruments 22 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Other non-current financial assets 156,915,620.25 156,915,620.25 Investment property 22,038,327.15 22,263,668.85 Fixed assets 5,584,734,999.90 5,661,592,991.66 Construction in progress 371,180,755.74 356,273,197.49 Right-of-use assets 49,059,102.53 Intangible assets 370,779,937.26 373,543,480.84 Development costs Goodwill 20,563,803.29 20,563,803.29 Long-term prepaid expense 118,278,629.40 118,340,494.60 Deferred income tax assets 124,240,481.62 122,865,841.69 Other non-current assets 164,333,330.32 95,434,040.18 Total non-current assets 7,159,027,223.32 7,106,925,899.25 Total assets 12,197,752,223.47 12,129,903,960.65 Current liabilities: Short-term borrowings 1,023,970,254.35 930,871,008.19 Held-for-trading financial liabilities 296,200.00 Derivative financial liabilities Notes payable Accounts payable 202,700,943.72 243,262,473.69 Advances from customers Contract liabilities 119,653,948.93 141,339,705.62 Employee benefits payable 206,120,465.61 265,648,198.38 Taxes payable 30,036,015.83 36,468,978.77 Other payables 20,636,417.79 17,587,470.79 Including: Interest payable Dividends payable 441,113.64 441,113.64 Liabilities directly associated with assets held for sale Current portion of non-current 31,235,200.20 43,149,400.13 liabilities Other current liabilities 68,221,106.95 192,574,674.68 Total current liabilities 1,702,870,553.38 1,870,901,910.25 Non-current liabilities: Insurance contract reserve Long-term borrowings 593,875,950.40 495,520,342.78 23 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Bonds payable 1,362,080,523.74 1,350,171,526.97 Including: Preferred shares Perpetual bonds Lease liabilities 48,672,763.55 Long-term payables Long-term employee benefits 62,137,656.00 62,137,656.00 payable Provisions Deferred income 172,234,790.57 173,862,983.31 Deferred income tax liabilities 83,207,811.39 85,633,161.44 Other non-current liabilities Total non-current liabilities 2,322,209,495.65 2,167,325,670.50 Total liabilities 4,025,080,049.03 4,038,227,580.75 Owners’ equity: Share capital 858,133,968.00 858,132,322.00 Other equity instruments 71,385,702.20 71,386,451.81 Including: Preferred shares Perpetual bonds Capital reserves 255,925,746.00 255,912,488.01 Less: Treasury stock Other comprehensive income 13,708,878.63 1,308,922.89 Specific reserve Surplus reserves 1,154,017,457.79 1,154,017,457.79 General reserve Retained earnings 5,421,350,798.62 5,346,819,948.22 Total equity attributable to owners of 7,774,522,551.24 7,687,577,590.72 the Company as the parent Non-controlling interests 398,149,623.20 404,098,789.18 Total owners’ equity 8,172,672,174.44 8,091,676,379.90 Total liabilities and owners’ equity 12,197,752,223.47 12,129,903,960.65 Legal representative: Liu Zibin The Company’s chief accountant: Zhang Hongmei The Company’s financial manager: Zhang Keming 24 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 2. Balance Sheet of the Company as the Parent Unit: RMB Item 31 March 2021 31 December 2020 Current assets: Monetary assets 600,764,110.66 729,437,231.33 Held-for-trading financial assets 6,045,900.00 163,636,075.34 Derivative financial assets Notes receivable 111,289,560.63 108,863,689.79 Accounts receivable 243,301,135.80 326,166,935.10 Accounts receivable financing 65,415,697.65 48,764,088.05 Prepayments 104,805,537.00 13,059,806.74 Other receivables 1,931,709,627.40 1,500,882,682.19 Including: Interest receivable Dividends receivable 75,488,652.49 75,488,652.49 Inventories 1,152,449,069.10 1,097,438,610.46 Contract assets Assets held for sale Current portion of non-current assets 46,187,513.72 45,750,018.30 Other current assets 159,186,110.87 247,860,882.02 Total current assets 4,421,154,262.83 4,281,860,019.32 Non-current assets: Investments in debt obligations Investments in other debt obligations Long-term receivables 41,494,018.13 41,053,183.15 Long-term equity investments 2,784,479,499.61 2,555,150,859.13 Investments in other equity instruments Other non-current financial assets 144,915,620.25 144,915,620.25 Investment property 29,395,483.93 29,734,239.22 Fixed assets 2,403,675,312.51 2,471,686,117.72 Construction in progress 48,896,170.47 48,694,822.74 Productive living assets Oil and gas assets Right-of-use assets 47,948,540.88 25 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Intangible assets 223,214,197.82 225,128,308.75 Development costs Goodwill Long-term prepaid expense 1,222,911.08 1,406,347.76 Deferred income tax assets 60,590,909.10 65,729,304.26 Other non-current assets 4,666,295.89 7,936,745.28 Total non-current assets 5,790,498,959.67 5,591,435,548.26 Total assets 10,211,653,222.50 9,873,295,567.58 Current liabilities: Short-term borrowings 484,266,416.97 332,466,931.13 Held-for-trading financial liabilities Derivative financial liabilities Notes payable Accounts payable 184,875,408.16 132,231,596.74 Advances from customers Contract liabilities 54,115,445.91 56,841,289.66 Employee benefits payable 160,715,438.40 202,694,515.93 Taxes payable 18,220,213.31 21,896,035.49 Other payables 141,877,593.12 79,668,657.80 Including: Interest payable Dividends payable 441,113.64 441,113.64 Liabilities directly associated with assets held for sale Current portion of non-current 5,633,346.46 4,000,000.00 liabilities Other current liabilities 53,761,415.02 166,257,466.30 Total current liabilities 1,103,465,277.35 996,056,493.05 Non-current liabilities: Long-term borrowings 593,875,950.40 495,520,342.78 Bonds payable 1,362,080,523.74 1,350,171,526.97 Including: Preferred shares Perpetual bonds Lease liabilities 47,084,419.20 Long-term payables Long-term employee benefits 62,137,656.00 62,137,656.00 26 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 payable Provisions Deferred income 130,487,086.87 131,546,549.87 Deferred income tax liabilities 57,612,402.72 58,927,115.71 Other non-current liabilities Total non-current liabilities 2,253,278,038.93 2,098,303,191.33 Total liabilities 3,356,743,316.28 3,094,359,684.38 Owners’ equity: Share capital 858,133,968.00 858,132,322.00 Other equity instruments 71,385,702.20 71,386,451.81 Including: Preferred shares Perpetual bonds Capital reserves 317,305,780.24 317,292,522.25 Less: Treasury stock Other comprehensive income -424,313.33 -424,313.33 Specific reserve Surplus reserves 1,150,908,718.15 1,150,908,718.15 Retained earnings 4,457,600,050.96 4,381,640,182.32 Total owners’ equity 6,854,909,906.22 6,778,935,883.20 Total liabilities and owners’ equity 10,211,653,222.50 9,873,295,567.58 3. Consolidated Income Statement Unit: RMB Item Q1 2021 Q1 2020 1. Revenue 993,485,161.79 1,252,428,965.20 Including: Operating revenue 993,485,161.79 1,252,428,965.20 2. Costs and expenses 985,587,009.24 1,134,449,068.31 Including: Cost of sales 815,351,239.75 909,936,744.88 Taxes and surcharges 13,245,938.39 18,233,112.02 Selling expense 22,876,675.00 43,045,212.94 Administrative expense 70,211,600.57 85,578,691.89 R&D expense 61,633,248.90 62,911,416.31 Finance costs 2,268,306.63 14,743,890.27 Including: Interest expense 12,971,587.55 18,671,711.46 27 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Interest income 7,867,810.79 4,314,960.98 Add: Other income 12,470,516.19 9,740,763.66 Return on investment (“-” for loss) 7,111,896.31 104,051,767.00 Including: Share of profit or loss of joint ventures and -2,671,359.52 -5,524,629.57 associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Exchange gain (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) -10,376,010.56 -99,714,752.69 Credit impairment loss (“-” for loss) 14,759,025.50 1,490,082.33 Asset impairment loss (“-” for loss) -6,272,617.88 -2,090,161.60 Asset disposal income (“-” for loss) 59,394,526.45 -37,045.69 3. Operating profit (“-” for loss) 84,985,488.56 131,420,549.90 Add: Non-operating income 408,813.34 525,956.20 Less: Non-operating expense 2,288,330.70 1,540,546.20 4. Profit before tax (“-” for loss) 83,105,971.20 130,405,959.90 Less: Income tax expense 14,524,286.78 23,719,400.54 5. Net profit (“-” for net loss) 68,581,684.42 106,686,559.36 5.1 By operating continuity 5.1.1 Net profit from continuing operations (“-” for net 68,581,684.42 106,686,559.36 loss) 5.1.2 Net profit from discontinued operations (“-” for net loss) 5.2 By ownership 5.2.1 Net profit attributable to shareholders of the Company 74,530,850.40 103,518,808.50 as the parent 5.2.2 Net profit attributable to non-controlling interests -5,949,165.98 3,167,750.86 6. Other comprehensive income, net of tax 12,399,955.74 22,343,190.91 Attributable to owners of the Company as the parent 12,399,955.74 22,343,190.91 6.1 Items that will not be reclassified to profit or loss 6.1.1 Changes caused by remeasurements on defined benefit schemes 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other 28 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 equity instruments 6.1.4 Changes in the fair value arising from changes in own credit risk 6.1.5 Other 6.2 Items that will be reclassified to profit or loss 12,399,955.74 22,343,190.91 6.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 6.2.2 Changes in the fair value of investments in other debt obligations 6.2.3 Other comprehensive income arising from the reclassification of financial assets 6.2.4 Credit impairment allowance for investments in other debt obligations 6.2.5 Reserve for cash flow hedges 6.2.6 Differences arising from the translation of foreign 12,399,955.74 22,343,190.91 currency-denominated financial statements 6.2.7 Other Attributable to non-controlling interests 7. Total comprehensive income 80,981,640.16 129,029,750.27 Attributable to owners of the Company as the parent 86,930,806.14 125,861,999.41 Attributable to non-controlling interests -5,949,165.98 3,167,750.86 8. Earnings per share 8.1 Basic earnings per share 0.09 0.12 8.2 Diluted earnings per share 0.09 0.12 Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before the combinations was RMB0.00, with the amount for the same period of last year being RMB0.00. Legal representative: Liu Zibin The Company’s chief accountant: Zhang Hongmei The Company’s financial manager: Zhang Keming 4. Income Statement of the Company as the Parent Unit: RMB Item Q1 2021 Q1 2020 1. Operating revenue 696,922,010.49 848,590,550.08 Less: Cost of sales 563,691,314.04 660,832,545.74 Taxes and surcharges 8,914,255.65 12,344,378.23 29 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Selling expense 16,130,283.27 24,177,042.05 Administrative expense 45,347,205.12 56,584,771.31 R&D expense 43,606,004.99 41,396,325.31 Finance costs -3,064,923.03 -1,334,505.55 Including: Interest expense 6,503,245.70 1,520,513.18 Interest income 5,778,636.94 844,209.61 Add: Other income 7,347,296.48 8,032,757.34 Return on investment (“-” for loss) 3,807,861.60 100,681,817.00 Including: Share of profit or loss of joint ventures and -2,671,359.52 -5,524,629.57 associates Income from the derecognition of financial assets at amortized cost (“-” for loss) Net gain on exposure hedges (“-” for loss) Gain on changes in fair value (“-” for loss) -7,590,175.34 -99,714,752.69 Credit impairment loss (“-” for loss) 12,012,001.12 -1,879,269.56 Asset impairment loss (“-” for loss) -3,411,935.03 Asset disposal income (“-” for loss) 59,391,874.67 -67,926.34 2. Operating profit (“-” for loss) 93,854,793.95 61,642,618.74 Add: Non-operating income 370,824.18 480,033.81 Less: Non-operating expense 2,010,965.71 1,260,294.11 3. Profit before tax (“-” for loss) 92,214,652.42 60,862,358.44 Less: Income tax expense 16,254,783.78 11,950,855.86 4. Net profit (“-” for net loss) 75,959,868.64 48,911,502.58 4.1 Net profit from continuing operations (“-” for net loss) 75,959,868.64 48,911,502.58 4.2 Net profit from discontinued operations (“-” for net loss) 5. Other comprehensive income, net of tax 5.1 Items that will not be reclassified to profit or loss 5.1.1 Changes caused by remeasurements on defined benefit schemes 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 5.1.3 Changes in the fair value of investments in other equity instruments 5.1.4 Changes in the fair value arising from changes in own credit risk 5.1.5 Other 30 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 5.2 Items that will be reclassified to profit or loss 5.2.1 Other comprehensive income that will be reclassified to profit or loss under the equity method 5.2.2 Changes in the fair value of investments in other debt obligations 5.2.3 Other comprehensive income arising from the reclassification of financial assets 5.2.4 Credit impairment allowance for investments in other debt obligations 5.2.5 Reserve for cash flow hedges 5.2.6 Differences arising from the translation of foreign currency-denominated financial statements 5.2.7 Other 6. Total comprehensive income 75,959,868.64 48,911,502.58 7. Earnings per share 7.1 Basic earnings per share 0.09 0.06 7.2 Diluted earnings per share 0.10 0.06 5. Consolidated Cash Flow Statement Unit: RMB Item Q1 2021 Q1 2020 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services 997,750,757.76 1,336,068,394.46 Net increase in customer deposits and interbank deposits Net increase in borrowings from the central bank Net increase in loans from other financial institutions Premiums received on original insurance contracts Net proceeds from reinsurance Net increase in deposits and investments of policy holders Interest, handling charges and commissions received Net increase in interbank loans obtained Net increase in proceeds from repurchase transactions Net proceeds from acting trading of securities Tax rebates 11,490,245.21 33,311,001.17 Cash generated from other operating activities 13,616,137.98 16,482,395.80 31 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Subtotal of cash generated from operating activities 1,022,857,140.95 1,385,861,791.43 Payments for commodities and services 583,308,258.22 633,557,770.07 Net increase in loans and advances to customers Net increase in deposits in the central bank and in interbank loans granted Payments for claims on original insurance contracts Net increase in interbank loans granted Interest, handling charges and commissions paid Policy dividends paid Cash paid to and for employees 389,050,366.67 492,433,253.48 Taxes paid 35,216,278.07 50,812,902.16 Cash used in other operating activities 52,027,666.27 63,141,341.95 Subtotal of cash used in operating activities 1,059,602,569.23 1,239,945,267.66 Net cash generated from/used in operating activities -36,745,428.28 145,916,523.77 2. Cash flows from investing activities: Proceeds from disinvestment 672,000,000.00 50,090,523.24 Return on investment 5,802,806.85 101,675,246.57 Net proceeds from the disposal of fixed assets, intangible assets 420,900.00 2,647,520.00 and other long-lived assets Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing activities 12,538,101.84 35,077,977.28 Subtotal of cash generated from investing activities 690,761,808.69 189,491,267.09 Payments for the acquisition of fixed assets, intangible assets and 149,203,426.43 204,045,508.07 other long-lived assets Payments for investments 523,970,000.00 50,215,000.00 Net increase in pledged loans granted Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities 1,378,057.33 543,397.49 Subtotal of cash used in investing activities 674,551,483.76 254,803,905.56 Net cash generated from/used in investing activities 16,210,324.93 -65,312,638.47 3. Cash flows from financing activities: Capital contributions received Including: Capital contributions by non-controlling interests to subsidiaries 32 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Borrowings raised 443,069,396.92 514,393,931.75 Cash generated from other financing activities 174,000,000.00 Subtotal of cash generated from financing activities 443,069,396.92 688,393,931.75 Repayment of borrowings 261,626,057.07 562,075,997.53 Interest and dividends paid 8,455,661.04 13,744,425.83 Including: Dividends paid by subsidiaries to non-controlling interests Cash used in other financing activities 130,000,000.00 Subtotal of cash used in financing activities 270,081,718.11 705,820,423.36 Net cash generated from/used in financing activities 172,987,678.81 -17,426,491.61 4. Effect of foreign exchange rates changes on cash and cash 6,827,333.56 -1,464,385.14 equivalents 5. Net increase in cash and cash equivalents 159,279,909.02 61,713,008.55 Add: Cash and cash equivalents, beginning of the period 1,396,530,407.47 878,559,018.92 6. Cash and cash equivalents, end of the period 1,555,810,316.49 940,272,027.47 6. Cash Flow Statement of the Company as the Parent Unit: RMB Item Q1 2021 Q1 2020 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services 723,992,763.48 873,552,898.00 Tax rebates 1,876,737.81 22,993,582.19 Cash generated from other operating activities 11,238,910.59 7,321,908.78 Subtotal of cash generated from operating activities 737,108,411.88 903,868,388.97 Payments for commodities and services 452,741,337.91 508,037,912.99 Cash paid to and for employees 243,187,954.45 307,956,559.69 Taxes paid 22,980,861.06 21,316,789.59 Cash used in other operating activities 30,677,916.96 33,964,054.78 Subtotal of cash used in operating activities 749,588,070.38 871,275,317.05 Net cash generated from/used in operating activities -12,479,658.50 32,593,071.92 2. Cash flows from investing activities: Proceeds from disinvestment 392,460,000.00 50,090,523.24 Return on investment 4,032,870.14 101,675,246.57 Net proceeds from the disposal of fixed assets, intangible assets 420,900.00 298,847.38 and other long-lived assets 33 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing activities 121,823,568.23 214,014,454.30 Subtotal of cash generated from investing activities 518,737,338.37 366,079,071.49 Payments for the acquisition of fixed assets, intangible assets and 20,211,577.70 16,517,130.57 other long-lived assets Payments for investments 388,970,000.00 52,615,000.00 Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities 525,315,318.44 248,481,770.00 Subtotal of cash used in investing activities 934,496,896.14 317,613,900.57 Net cash generated from/used in investing activities -415,759,557.77 48,465,170.92 3. Cash flows from financing activities: Capital contributions received Borrowings raised 264,478,566.71 40,415,148.91 Cash generated from other financing activities 58,215,720.00 58,280,000.00 Subtotal of cash generated from financing activities 322,694,286.71 98,695,148.91 Repayment of borrowings 18,599,340.70 43,913,708.07 Interest and dividends paid 5,707,658.19 4,331,120.89 Cash used in other financing activities 135,072,100.00 Subtotal of cash used in financing activities 24,306,998.89 183,316,928.96 Net cash generated from/used in financing activities 298,387,287.82 -84,621,780.05 4. Effect of foreign exchange rates changes on cash and cash 56,243.18 389,348.20 equivalents 5. Net increase in cash and cash equivalents -129,795,685.27 -3,174,189.01 Add: Cash and cash equivalents, beginning of the period 728,346,695.28 259,320,863.08 6. Cash and cash equivalents, end of the period 598,551,010.01 256,146,674.07 II Adjustments to the Financial Statements 1. Adjustments to the Financial Statements at the Beginning of the First Execution Year of the New Standards Governing Leases since 2021 √ Applicable □ Not applicable Whether the Company needs to adjust the items in balance sheet at the beginning of the year √ Yes □ No Consolidated Balance Sheet 34 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Unit: RMB Item 31 December 2020 1 January 2021 Adjusted Current assets: Monetary assets 1,400,478,034.81 1,400,478,034.81 Held-for-trading financial assets 268,456,216.98 268,456,216.98 Notes receivable 182,994,110.86 182,994,110.86 Accounts receivable 522,425,219.87 522,425,219.87 Receivables financing 55,150,926.34 55,150,926.34 Prepayments 19,611,775.28 19,611,775.28 Other receivables 105,710,818.69 105,710,818.69 Including: Dividends receivable 75,488,652.49 75,488,652.49 Inventories 1,988,968,681.64 1,988,968,681.64 Current portion of non-current assets 45,750,018.30 45,750,018.30 Other current assets 433,432,258.63 433,432,258.63 Total current assets 5,022,978,061.40 5,022,978,061.40 Non-current assets: Long-term receivables 41,053,183.15 41,053,183.15 Long-term equity investments 138,079,577.25 138,079,577.25 Other non-current financial assets 156,915,620.25 156,915,620.25 Investment property 22,263,668.85 22,263,668.85 Fixed assets 5,661,592,991.66 5,661,592,991.66 Construction in progress 356,273,197.49 356,273,197.49 Right-of-use assets 6,892,432.21 6,892,432.21 Intangible assets 373,543,480.84 373,543,480.84 Goodwill 20,563,803.29 20,563,803.29 Long-term prepaid expense 118,340,494.60 118,340,494.60 Deferred income tax assets 122,865,841.69 122,865,841.69 Other non-current assets 95,434,040.18 95,434,040.18 Total non-current assets 7,106,925,899.25 7,113,818,331.46 6,892,432.21 Total assets 12,129,903,960.65 12,136,796,392.86 6,892,432.21 Current liabilities: Short-term borrowings 930,871,008.19 930,871,008.19 Accounts payable 243,262,473.69 243,262,473.69 Contract liabilities 141,339,705.62 141,339,705.62 35 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Employee benefits payable 265,648,198.38 265,648,198.38 Taxes and levies payable 36,468,978.77 36,468,978.77 Other payables 17,587,470.79 17,587,470.79 Including: Dividends payable 441,113.64 441,113.64 Current portion of non-current liabilities 43,149,400.13 43,599,400.13 450,000.00 Other current liabilities 192,574,674.68 192,574,674.68 Total current liabilities 1,870,901,910.25 1,871,351,910.25 450,000.00 Non-current liabilities: Long-term borrowings 495,520,342.78 495,520,342.78 Bonds payable 1,350,171,526.97 1,350,171,526.97 Lease liabilities 6,442,432.21 6,442,432.21 Long-term payroll payable 62,137,656.00 62,137,656.00 Deferred income 173,862,983.31 173,862,983.31 Deferred income tax liabilities 85,633,161.44 85,633,161.44 Total non-current liabilities 2,167,325,670.50 2,173,768,102.71 6,442,432.21 Total liabilities 4,038,227,580.75 4,045,120,012.96 6,892,432.21 Owners’ equity: Share capital 858,132,322.00 858,132,322.00 Other equity instruments 71,386,451.81 71,386,451.81 Capital reserves 255,912,488.01 255,912,488.01 Other comprehensive income 1,308,922.89 1,308,922.89 Surplus reserves 1,154,017,457.79 1,154,017,457.79 Retained earnings 5,346,819,948.22 5,346,819,948.22 Total equity attributable to owners of the 7,687,577,590.72 7,687,577,590.72 Company as the parent Non-controlling interests 404,098,789.18 404,098,789.18 Total owners’ equity 8,091,676,379.90 8,091,676,379.90 Total liabilities and owners’ equity 12,129,903,960.65 12,136,796,392.86 6,892,432.21 Note for adjustment: Balance Sheet of the Company as the Parent Unit: RMB Item 31 December 2020 1 January 2021 Adjusted Current assets: Monetary assets 729,437,231.33 729,437,231.33 Held-for-trading financial assets 163,636,075.34 163,636,075.34 36 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Notes receivable 108,863,689.79 108,863,689.79 Accounts receivable 326,166,935.10 326,166,935.10 Receivables financing 48,764,088.05 48,764,088.05 Prepayments 13,059,806.74 13,059,806.74 Other receivables 1,500,882,682.19 1,500,882,682.19 Including: Dividends receivable 75,488,652.49 75,488,652.49 Inventories 1,097,438,610.46 1,097,438,610.46 Current portion of non-current assets 45,750,018.30 45,750,018.30 Other current assets 247,860,882.02 247,860,882.02 Total current assets 4,281,860,019.32 4,281,860,019.32 Non-current assets: Long-term receivables 41,053,183.15 41,053,183.15 Long-term equity investments 2,555,150,859.13 2,555,150,859.13 Other non-current financial assets 144,915,620.25 144,915,620.25 Investment property 29,734,239.22 29,734,239.22 Fixed assets 2,471,686,117.72 2,471,686,117.72 Construction in progress 48,694,822.74 48,694,822.74 Right-of-use assets 7,709,598.61 7,709,598.61 Intangible assets 225,128,308.75 225,128,308.75 Long-term prepaid expense 1,406,347.76 1,406,347.76 Deferred income tax assets 65,729,304.26 65,729,304.26 Other non-current assets 7,936,745.28 7,936,745.28 Total non-current assets 5,591,435,548.26 5,599,145,146.87 7,709,598.61 Total assets 9,873,295,567.58 9,881,005,166.19 7,709,598.61 Current liabilities: Short-term borrowings 332,466,931.13 332,466,931.13 Accounts payable 132,231,596.74 132,231,596.74 Contract liabilities 56,841,289.66 56,841,289.66 Employee benefits payable 202,694,515.93 202,694,515.93 Taxes payable 21,896,035.49 21,896,035.49 Other payables 79,668,657.80 79,668,657.80 Including: Dividends payable 441,113.64 441,113.64 Current portion of non-current liabilities 4,000,000.00 5,139,062.02 1,139,062.02 Other current liabilities 166,257,466.30 166,257,466.30 37 Lu Thai Textile Co., Ltd. First Quarterly Report 2021 Total current liabilities 996,056,493.05 997,195,555.07 1,139,062.02 Non-current liabilities: Long-term borrowings 495,520,342.78 495,520,342.78 Bonds payable 1,350,171,526.97 1,350,171,526.97 Lease liabilities 6,570,536.59 6,570,536.59 Long-term employee benefits payable 62,137,656.00 62,137,656.00 Deferred income 131,546,549.87 131,546,549.87 Deferred income tax liabilities 58,927,115.71 58,927,115.71 Total non-current liabilities 2,098,303,191.33 2,104,873,727.92 6,570,536.59 Total liabilities 3,094,359,684.38 3,102,069,282.99 7,709,598.61 Owners’ equity: Share capital 858,132,322.00 858,132,322.00 Other equity instruments 71,386,451.81 71,386,451.81 Capital reserves 317,292,522.25 317,292,522.25 Other comprehensive income -424,313.33 -424,313.33 Surplus reserves 1,150,908,718.15 1,150,908,718.15 Retained earnings 4,381,640,182.32 4,381,640,182.32 Total owners’ equity 6,778,935,883.20 6,778,935,883.20 Total liabilities and owners’ equity 9,873,295,567.58 9,881,005,166.19 7,709,598.61 Note for adjustment: 2. Retrospective Restatement of Previous Comparative Data due to the First Execution of the New Standards Governing Leases since 2021 □ Applicable √ Not applicable III Independent Auditor’s Report Indicate by tick mark whether the financial statements above have been audited by an independent auditor. □ Yes √ No These financial statements have not been audited by such an auditor. Chairman of the Board: Liu Zibin Lu Thai Textile Co., Ltd. 30 April 2021 38