Lu Thai Textile Co., Ltd. Interim Report 2024
LU THAI TEXTILE CO., LTD.
INTERIM REPORT 2024
August 2024
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Lu Thai Textile Co., Ltd. Interim Report 2024
Part I Important Notes, Table of Contents and Definitions
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.
Liu Zibin, the Company’s legal representative, and Zhang Keming, head of accounting affairs
and head of the accounting department (equivalent to accounting manager) hereby guarantee
that the Financial Statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
The Company is subject to the disclosure requirements for listed companies engaging in
textile and apparel as stated in Guideline No. 3 of the Shenzhen Stock Exchange for Self-
regulation of Listed Companies—Industry-specific Information Disclosure.
In H1 2024, despite the global economy continuing to face multiple challenges such as
inflation and geopolitical tensions, the overall economic landscape has displayed a modest
recovery. According to the data released by the National Bureau of Statistics, China's gross
domestic product (GDP) grew by 5% year on year in the first six months, and the economic
performance remained generally stable. The textile industry has ensured its continued
stability from the previous period, with its efficiency continuing to improve. Statistics from
the General Administration of Customs of China show that the export revenue of textile
products increased by 6.5% between January and June 2024. Amidst relatively stable demand
in certain overseas markets and a modest restocking by international brands, China's textile
and apparel exports have performed better than expected overall, with the competitiveness of
the industry chain remaining stable. However, from the overall perspective of economic
operations, strong supply coexists with weak demand, and insufficient effective demand
remains a prominent issue. The textile industry is facing changes in the global trade landscape
and the reshaping of market opportunities. In 2024, the global economy is still confronted
with a complicated and grim development status. China's economy will continue to face many
challenges in consolidating the good momentum of stable growth, as well as in persistently
promoting high-quality development. For details, please refer to Part III Management
Discussion and Analysis.
The Board has approved a final dividend plan as follows: based on the share capital of
817,305,896 shares, a cash dividend of RMB1.00 (tax inclusive) per 10 shares is to be
distributed to the shareholders, with no bonus issue from either profit or capital reserves.
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.
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Lu Thai Textile Co., Ltd. Interim Report 2024
Table of Contents
Part I Important Notes, Table of Contents and Definitions........................................................... 2
Part II Corporate Information and Key Financial Information................................................... 6
Part III Management Discussion and Analysis................................................................................9
Part IV Corporate Governance.......................................................................................................27
Part V Environmental and Social Responsibility.......................................................................... 30
Part VI Significant Events............................................................................................................... 33
Part VII Share Changes and Shareholder Information................................................................40
Part VIII Preferred Shares.............................................................................................................. 49
Part IX Bonds................................................................................................................................... 50
Part X Financial Statements............................................................................................................55
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Lu Thai Textile Co., Ltd. Interim Report 2024
Documents Available for Reference
1. The financial statements signed and stamped by the Company’s legal representative and head of accounting
affairs and head of the accounting department; and
2. The originals of all the Company’s announcements and documents disclosed to the public during the Reporting
Period on Securities Times, Shanghai Securities News, China Securities Journal and Ta Kung Pao.
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Lu Thai Textile Co., Ltd. Interim Report 2024
Definitions
Term Definition
Lu Thai Textile Co., Ltd. and its consolidated subsidiaries, except where the
The “Company”, “LTTC”, “Issuer” or “we”
context otherwise requires
The Board of Directors The Board of Directors of Lu Thai Textile Co., Ltd.
The Supervisory Committee The Supervisory Committee of Lu Thai Textile Co., Ltd.
CSRC The China Securities Regulatory Commission
Expressed in the Chinese currency of Renminbi, expressed in ten thousand
RMB, RMB’0,000
Renminbi
The “Company Law” The “Company Law of the People‘s Republic of China”
The “Securities Law” The “Securities Law of the People‘s Republic of China”
The “Reporting Period” or “Current Period” The period from 1 January 2024 to 30 June 2024
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Lu Thai Textile Co., Ltd. Interim Report 2024
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name LTTC, LTTC-B Stock code 000726, 200726
Previous stock name (if any) N/A
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 鲁泰纺织股份有限公司
Abbr. (if any) 鲁泰纺织
Company name in English (if any) LU THAI TEXTILE CO.，LTD
Abbr. (if any) LTTC
Legal representative Liu Zibin
II Contact Information
Board Secretary Securities Representative
Name Zheng Weiyin Li Kun
No. 81, Songling East Road, Zichuan No. 81, Songling East Road, Zichuan District,
Address
District, Zibo, Shandong, P.R.China Zibo, Shandong, P.R.China
Tel. 0533-5285166 0533-5285166
Fax 0533-5418805 0533-5418805
Email address wyzheng@lttc.com.cn likun@lttc.com.cn
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address,
email address and other contact information of the Company in the Reporting Period.
□ Applicable Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2023 Annual Report.
2. Media for Information Disclosure and Place where this Report is Lodged
Indicate by tick mark whether any change occurred to the information disclosure media and the place for lodging the Company’s
periodic reports in the Reporting Period.
□ Applicable Not applicable
The website of the Shenzhen Stock Exchange, media and website where the Company’s periodic reports are disclosed, as well as
the place for lodging such reports did not change in the Reporting Period. The said information can be found in the 2023 Annual
Report.
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Lu Thai Textile Co., Ltd. Interim Report 2024
3. Other Information
Indicate by tick mark whether any change occurred to other information in the Reporting Period.
□ Applicable Not applicable
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes No
H1 2024 H1 2023 Change (%)
Operating revenue (RMB) 2,830,488,685.61 2,840,491,262.47 -0.35%
Net profit attributable to the listed company’s shareholders
169,559,969.54 221,647,998.15 -23.50%
(RMB)
Net profit attributable to the listed company’s shareholders
263,731,284.55 191,809,861.94 37.50%
before exceptional gains and losses (RMB)
Net cash generated from/used in operating activities (RMB) 451,421,652.69 148,610,216.98 203.76%
Basic earnings per share (RMB/share) 0.21 0.26 -19.23%
Diluted earnings per share (RMB/share) 0.19 0.23 -17.39%
Weighted average return on equity (%) 1.83% 2.42% -0.59%
30 June 2024 31 December 2023 Change (%)
Total assets (RMB) 13,765,510,933.73 13,430,286,222.94 2.50%
Equity attributable to the listed company’s shareholders
9,302,679,873.38 9,230,806,905.80 0.78%
(RMB)
V Accounting Data Differences under China’s Accounting Standards for Business
Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign
Accounting Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable Not applicable
No such differences for the Reporting Period.
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable Not applicable
No such differences for the Reporting Period.
VI Exceptional Gains and Losses
Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gain or loss on disposal of non-current assets (inclusive of impairment allowance
-399,351.02
write-offs)
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Lu Thai Textile Co., Ltd. Interim Report 2024
Government grants recognised in profit or loss (exclusive of those that are closely
related to the Company's normal business operations and given in accordance with
15,013,138.75
defined criteria and in compliance with government policies, and have a continuing
impact on the Company's profit or loss)
Gain or loss on fair-value changes in financial assets and liabilities held by a non-
financial enterprise, as well as on disposal of financial assets and liabilities (exclusive
-125,669,854.28
of the effective portion of hedges that is related to the Company's normal business
operations)
Non-operating income and expense other than the above 677,817.46
Less: Income tax effects -16,056,262.30
Non-controlling interests effects (net of tax) -150,671.78
Total -94,171,315.01
Particulars about other items that meet the definition of exceptional gain/loss:
□ Applicable Not applicable
No such cases for the Reporting Period.
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item 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.
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Lu Thai Textile Co., Ltd. Interim Report 2024
Part III Management Discussion and Analysis
I Principal Activity of the Company in the Reporting Period
During the Reporting Period, the global political and economic landscape continued to present a complex and volatile situation, with
geopolitical conflicts, inflation, and mounting protectionism posing multidimensional challenges to economic recovery. In the face of
the complexity, severity, and uncertainty of the external environment, the Company steadfastly adhered to a "customer-focused"
philosophy, consolidating its position in the domestic market while concurrently expanding into overseas markets. Continuously
executing the strategies of "Improve Quality and Efficiency" and "Overall Internationalization", the Company accelerated the launch
and steady operations of new overseas projects, intensified the exploration of new markets, and dedicated to high-quality
development and disciplined management practices by expanding market, adjusting structure and building capabilities.
For the Reporting Period, the Company achieved operating revenue of RMB2,830 million, operating profit of RMB192 million, a net
profit attributable to the Company as the parent of RMB170 million, and a net profit attributable to the Company as the parent before
exceptional gains and losses of RMB264 million, respectively down 0.35%, down 15.98%, down 23.50%, and up 37.50% when
compared to the same period of last year. No changes occurred to the Company’s principal operations, primary products, business
models, or the primary factors driving the Company’s growth in the Reporting Period.
During the Reporting Period, the Company was selected as the "Chinese Textile and Apparel Brand of 2024 with Competitive Edge"
by the China National Textile and Apparel Council and named as an "Innovation Unit for Digital Transformation" by the Shandong
Textile and Apparel Association in 2023. The Company mainly focused on the following aspects during the Reporting Period:
(I) Continuously improve the Lu Thai Production System (LTPS) and deeply promote cost reduction and efficiency enhancement
The Company deeply implemented the excellent performance management mode, continuously improved the LTPS, and promoted
lean production. It carried out systematic training on lean production-related knowledge and stimulated the enthusiasm and creativity
of its employees through management and technology research refinement, star-level plant evaluation, technology comparison, and
other tasks, as well as a series of team-building activities, thereby constantly enhancing its management capabilities in quality control,
production operations, and risk control. Aiming to actively respond to market changes and meet customer demands, the Company
further strengthened its internal management mechanisms and continued to maintain its advantageous position in the cotton textile
industry.
(II) Expand the global marketing network and improve the overall production solution capabilities
The Company built a global marketing network centered on the Group headquarters. Adhering to the big customer strategy and
leveraging its global industry framework and advantages in the vertical industry chain, the Company improved its cooperation model
featuring high-level interaction, middle-level communication, and node interconnection with strategic and valuable customers,
stabilized strategic partnerships, and fostered a win-win development model. It maintained good relationships with and tracked key
customers, promoted integrated fabric and apparel service, improved the vertical supply chain cooperation system for fabrics and
clothing, and provided customers with a "one-stop" solution for various "fabrics + apparel".
(III) Focus on customer value creation and advance R&D innovation and cooperation
Leveraging its advantages in the full industry chain and "domestic + overseas" production framework, the Company continuously
strengthened its market-oriented product development and technology research system. In response to market conditions, the
Company further streamlined the mechanism for introducing product development needs and executing product development tasks,
strengthened joint development with upstream and downstream industry partners, as well as research institutions, and promoted the
implementation of research projects related to the design of casual wear and functional fabrics, centering around product
functionality enhancement, green and sustainable product development, and processing technology research. During the Reporting
Period, the Company was granted 17 patents, including 13 for invention and four for utility models.
(IV) Further refine the corporate culture system and enhance market competitive awareness on all fronts
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Lu Thai Textile Co., Ltd. Interim Report 2024
In order to further employee's thinking, gather their strength, and motivate them, the Company advanced its corporate culture
enhancement project, actively responding to changes in the international political and economic landscape and embracing market
challenges. Adhering to the principles of "pursuing excellence" and "integrity for win-win" with all stakeholders, the Company
persisted in the sustainable development approach of "green and low-carbon, intelligent manufacturing", proactively adapting to
external environmental changes and continuously meeting customer and market demands, which has laid a solid ideological and
cultural foundation for the next stage of development and spared no efforts to build the Company into a green and fashionable group
in the textile and apparel industry centered on leading fabrics.
The Company is subject to the disclosure requirements for listed companies engaging in textile and apparel as stated in Guideline No.
3 of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.
This year, supported by the orderly and stable functioning of the supply chain, as well as the recovery of market demands at home
and abroad, the overall production situation in the textile industry has remained generally stable. According to the data from the
National Bureau of Statistics, the retail sales of consumer goods in the first half of 2024 totaled RMB23.60 trillion, up 3.7% year on
year. Specifically, the sales of apparel, shoes and hats, and knitwear and textiles above the designated size recorded RMB709.8
billion, up 1.3% year on year. According to the statistics bulletin of the General Administration of Customs, China's textile and
apparel exports continued to maintain a stable recovery trend in the first half of 2024, with cumulative exports of textiles and apparel
of USD143.18 billion in the first half of this year, a year-on-year increase of 4.7%. Based on the 2024 H1 economic operation report
of China's textile industry released by the China National Textile and Apparel Council, as the efficiency of textile enterprises has
continued to improve, the profitability and some operational indicators of enterprises have shown a trend of improvement. However,
in terms of demand, the growth in domestic demand is still slightly less than the export data, and the domestic demand is insufficient
in its stability, which needs to be further strengthened.
In 2024, the international political and economic environment is becoming increasingly complicated. Instabilities and uncertainties
such as the diverging monetary policies across the world, tightening geopolitical environment, and trade protectionism will constrain
the improvement of international market demand. Accompanied by a series of regulatory policies intensively introduced and
implemented by the state, the domestic economy as a whole will continue to recover, but in the short term, the intertwined problems
of insufficient effective demand, subdued market sentiment, and structural transformation pressures in the medium and long term will
further pose challenges to steady economic growth and risk prevention.
II Core Competitiveness Analysis
1. The Company has a comprehensive vertical industrial chain and internationalized layout. It possesses the whole industrial chain
integrating spinning, bleaching and dyeing, neatening, testing, and garment making, as well as excellent quality control capabilities
through various links of the production of high-end yarn-dyed fabrics. In order to leverage international resources, give play to the
advantage of internationalized industrial distribution and reinforce the leading international status in manufacturing the yarn-dyed
fabrics for shirts, the Company has put in place production bases, design agency, and market service offices overseas.
2. The Company has better integrated management capability and high-level management system architecture. Since 1995, the
Company has successively passed the certification of ISO9001 quality management system, ISO14001 environmental management
system, ISO45001 Occupation Health Safety Management System, SA8000 Social Responsibility Management System, The
Worldwide Responsible Apparel Production Standard (WRAP), Sustainable Textile Production (STeP), Global Organic Textile
Standard (GOTS), Global Recycle Standard (GRS), HIGG (FEM and FSLM) and China National Accreditation Service for
Conformity Assessment (CNAS), and realized the internationalization, standardization and normalization of the corporate
management. In order to make outstanding achievement in its operating management, better improve the Company’s business
performance and capabilities, the Company has introduced the GB/T19580 Criteria for Performance Excellence step by step, set up
the “big quality” system, promoted the management innovation and guaranteed the management quality.
3. The Company establishes its high-level technical cooperation platform by virtue of strong R&D capability. In fact, the Company
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Lu Thai Textile Co., Ltd. Interim Report 2024
always insists on the independent innovation, enhances its technical cooperation and joint product development with various research
institutes, colleges and universities, strategic clients and important suppliers by relying on various technical platforms including the
national enterprise technical centre, the national industrial design centre, the national post-doctoral scientific research station and
Shandong Provincial Engineering Technology Research Centre. Emphasising both cutting-edge technological reserves and the
innovation of applied technologies, the Company continuously strengthens the development of new products oriented towards
realizing commercial value. Gradually enhancing its capability in technological research and integrated product development, the
Company continually contributes more green, low-carbon, and sustainable new technologies and high-quality products to the
industry, creating more value for customers and materialising low-carbon, green, and sustainable development.
III Core Business Analysis
Overview:
See contents under the heading “I Principal Activity of the Company in the Reporting Period” above.
Year-on-year changes in key financial data:
Unit: RMB
Change
H1 2024 H1 2023 Main reason for change
(%)
Operating revenue 2,830,488,685.61 2,840,491,262.47 -0.35%
Cost of sales 2,131,993,492.13 2,233,932,367.67 -4.56%
Selling expense 63,286,721.28 66,411,247.30 -4.70%
Administrative expense 158,805,160.69 175,308,361.39 -9.41%
Decreased net exchange gain as
Finance costs 4,249,591.93 -57,007,476.34 107.45% compared to the same period of
last year
Income tax expense 18,864,805.79 20,991,415.51 -10.13%
R&D investments 115,374,597.19 131,290,032.04 -12.12%
Decreased payments for
Net cash generated from/used in commodities and services as
451,421,652.69 148,610,216.98 203.76%
operating activities compared to the same period of
last year
Decreased payments for
Net cash generated from/used in
-358,741,366.46 -751,734,011.96 52.28% investments as compared to the
investing activities
same period of last year
Increased borrowings raised as
Net cash generated from/used in
195,943,296.16 51,586,090.91 279.84% compared to the same period of
financing activities
last year
Net increase in cash and cash
297,560,194.04 -533,029,486.11 155.82%
equivalents
Significant changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable Not applicable
No such changes in the Reporting Period.
Breakdown of operating revenue:
Unit: RMB
H1 2024 H1 2023 Change (%)
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Lu Thai Textile Co., Ltd. Interim Report 2024
As % of total As % of total
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 2,830,488,685.61 100% 2,840,491,262.47 100% -0.35%
By operating division
Textile and apparel 2,626,711,642.70 92.80% 2,634,843,253.53 92.76% -0.31%
Electricity and
136,341,429.91 4.82% 120,527,005.15 4.24% 13.12%
steam
Others 67,435,613.00 2.38% 85,121,003.79 3.00% -20.78%
By product category
Fabric products 2,008,100,132.02 70.95% 1,932,688,936.22 68.04% 3.90%
Shirts 618,611,510.68 21.86% 702,154,317.31 24.72% -11.90%
Electricity and
136,341,429.91 4.82% 120,527,005.15 4.24% 13.12%
steam
Others 67,435,613.00 2.38% 85,121,003.79 3.00% -20.78%
By operating segment
Japan And South
176,568,711.23 6.24% 189,783,688.08 6.68% -6.96%
Korea
Southeast Asia 806,827,260.35 28.50% 825,289,532.25 29.05% -2.24%
Europe and
428,358,783.88 15.13% 488,539,769.45 17.20% -12.32%
America
Others 362,087,336.11 12.79% 295,912,689.60 10.42% 22.36%
China 1,056,646,594.04 37.33% 1,040,965,583.09 36.65% 1.51%
Operating division, product category or operating segment contributing over 10% of operating revenue or operating profit:
□ Applicable Not applicable
The Company is subject to the disclosure requirements for listed companies engaging in textile and apparel as stated in Guideline
No. 3 of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.
Unit: RMB
Gross YoY change in YoY change in
YoY change in
Operating revenue Cost of sales profit operating gross profit
cost of sales (%)
margin revenue (%) margin (%)
By operating division
Textile and
2,626,711,642.70 1,945,761,309.53 25.92% -0.31% -4.25% 3.05%
apparel
By product category
Fabric
2,008,100,132.02 1,479,411,285.60 26.33% 3.90% -1.54% 4.08%
products
Shirts 618,611,510.68 466,350,023.93 24.61% -11.90% -11.95% 0.04%
By operating segment
Southeast
806,827,260.35 594,777,301.00 26.28% -2.24% -7.20% 3.94%
Asia
Europe and
428,358,783.88 320,745,427.54 25.12% -12.32% -13.67% 1.17%
America
China 1,056,646,594.04 816,702,834.58 22.71% 1.51% -3.68% 4.16%
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable Not applicable
Physical stores of the Company:
□ Yes No
New physical stores:
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Lu Thai Textile Co., Ltd. Interim Report 2024
□ Yes No
Indicate by tick mark whether the Company discloses its top five franchised stores.
□ Yes No
IV Other Information Required by Information Disclosure Guide for Companies Engaged in
Textile and Garment Services
1. Capacity
The Company's own capacity
Industry
Item H1 2024 H1 2023
Classification
Total capacity (fabrics) (10,000
14,415.00 14,872.50
meters)
Rate of capacity utilization 76% 70%
The Company's convertible bond
Fabric fundraising projects: The "Functional Fabric
The Company's convertible bond
Intelligent Eco-park Project (Phase I)" with
fundraising project, the "Overseas
Plants under construction an annual capacity of 35 million meters of
Product Line Project of High-grade
high-grade functional fabrics and the
Fabrics (Phase I)", was in progress.
"Overseas Product Line Project of High-
grade Fabrics (Phase I)" were in progress.
Total capacity (apparel) (10,000
1,220.00 1,115.00
pieces)
Apparel Rate of capacity utilization 82% 84%
Plants under construction
Year-on-year change in the rate of capacity utilization above 10%
□ Yes No
Overseas capacity
Yes □ No
Industry Classification Item Domestic Overseas
Percentage of capacity 74% 26%
Fabric Capacity layout Mainly in Shandong Province Mainly in Southeast Asia
Rate of capacity utilization 76% 76%
Percentage of capacity 31% 69%
Apparel Capacity layout Mainly in Shandong Province Mainly in Southeast Asia
Rate of capacity utilization 83% 82%
2. Sales model and channels
Product sales channels and operation methods
a. Sales model
The Company adopted the order-based sales model. With the self-owned trademark "Luthai" for its fabric sales, it provided
customers with development and design plans based on customer needs, fabrics and patterns leading the market, fashion and
technology, functions and environmental protection. Shirts were mainly made according to the orders of customers at home and
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Lu Thai Textile Co., Ltd. Interim Report 2024
abroad, and sold by brand owners.
The Company's self-owned brand was operated through self-owned exclusive shops such as Lu Thai Exhibition and Sales Pavilion,
counters of affiliated stores in malls and e-networking marketing. Meanwhile, the Company could provide customers with high-end
customized shirts and customized business wear to meet the market demand of the high-end service industry.
b. Sales channels
Direct sales: The headquarters of the Company carried out direct investments and operation, and operated and managed a brand at the
headquarters or by setting up a branch company in other regions to conclude transactions with customers offline.
Online sales: Through self-developed platforms and large third-party online shopping platforms, the Company concluded transactions
with customers on the Internet and delivered goods to customers by express delivery services.
Unit: RMB
Gross YoY change in
Sales YoY change in YoY change in
Operating revenue Cost of sales profit gross profit
channels operating revenue cost of sales
margin margin
Online
1,258,021.12 614,546.05 51.15% -35.90% -23.50% -7.92%
sales
Direct
2,013,366,369.87 1,481,150,559.52 26.43% 3.86% -1.54% 4.03%
sales
OEM/OD
612,087,251.71 463,996,203.96 24.19% -11.86% -11.98% 0.10%
M
3. Selling expense and breakdown thereof
Unit: RMB
percentage of
Item H1 2024 H1 2023 Amount of change Note
change
Salaries 32,065,926.42 33,546,461.28 -1,480,534.86 -4.41%
Marketing
16,111,399.23 16,171,875.20 -60,475.97 -0.37%
expense
Depreciation
3,344,566.64 3,510,556.38 -165,989.74 -4.73%
costs
Business travel
3,231,195.05 3,906,192.17 -674,997.12 -17.28%
expenses
Office costs 5,569,616.81 7,315,422.95 -1,745,806.14 -23.86%
Mainly due to the increased
Others 2,964,017.13 1,960,739.32 1,003,277.81 51.17%
design and testing costs
Total 63,286,721.28 66,411,247.30 -3,124,526.02 -4.70%
4. Franchise and distribution
Franchisees and distributors recorded more than 30% of sales revenue
□ Yes No
5. Online sales
Online sales recorded more than 30% of sales revenue
□ Yes No
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Lu Thai Textile Co., Ltd. Interim Report 2024
Self-developed sales platforms
Yes □ No
Start of operation 30 March 2009
Number of registered users 148,000
Average number of active monthly users (AMU) 2,900
Return rate of main brands 2.50%
Return rate of main types 2.50%
Cooperation with third-party sales platforms
Yes □ No
Online sales channels opened or closed by the Company
□ Applicable Not applicable
Impact on the Company in the current period and subsequent periods:
Not applicable.
6. Agency operation model
Agency operation model involved
□ Yes No
7. Inventory
Inventory
Days of
Quantity of Inventory Year-on-year change in
Main products turnover of Reason
inventory age inventory balance
inventories
Inventories increased year on year
due to the inputs during the trial
Fabrics (10,000 Within 1 production period of the overseas
98 3,688.24 27.23%
meters) year product line project of high-grade
fabrics and longer delivery days
for certain orders.
Fabrics (10,000 Over 1
717.69 -4.07%
meters) year
Inventories increased temporarily
Shirts (10,000 Within 1 due to the need to round up
31 142.35 45.28%
pieces) year wholesale shipments for some
orders.
Shirts (10,000 Over 1
15.28 8.52%
pieces) year
Reserves for falling prices of inventory
Closing balance
Item Falling price reserves or provision for
Gross amount Carrying amount
impairment on contract performance cost
Raw materials 920,639,465.98 48,933,964.67 871,705,501.31
Goods in process 493,298,150.00 14,522,519.63 478,775,630.37
Products on hand 946,421,769.26 186,436,309.51 759,985,459.75
Commissioned products 15,097,450.37 15,097,450.37
Materials in transit 16,942,695.35 16,942,695.35
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Lu Thai Textile Co., Ltd. Interim Report 2024
Total 2,392,399,530.96 249,892,793.81 2,142,506,737.15
Inventory information of retail channels such as franchised stores or distributors:
Not applicable.
8. Brand building
Production and sales of brand clothing, apparel and home textile products
Yes □ No
Self-owned brands
Chara Target
Trademark Main product Price zone of
Brand name cterist consumer Main sales areas City levels
name types main products
ics group
Classi Provincial
c East China, South capital cities
Business
LTGRFF LTGRFF Shirts and suits busine RMB500-3000 China and and other
people
ss Southwest China prefecture-
attire level cities
Trademark ownership disputes
□ Applicable Not applicable
9. Others
Engaged in business related to apparel design
□ Yes No
Whether the Company held meetings for the placement of orders
□ Yes No
V Analysis of Non-Core Businesses
Applicable □ Not applicable
Unit: RMB
As % of total
Amount Source/Reason Recurrent or not
profit
Loss on held-for-trading financial
Return on investment -3,289,446.38 -1.71% Not
assets
Gain/loss on changes Loss on changes in fair value of
-112,539,827.27 -58.34% Not
in fair value held-for-trading financial assets
Asset impairments -34,719,445.19 -18.00% Inventory valuation allowances Not
Non-operating Income of non-operating
2,878,019.80 1.49% Not
income compensation, etc
Non-operating Expenses on non-operating
2,366,685.20 1.23% Not
expense compensation, etc
16
Lu Thai Textile Co., Ltd. Interim Report 2024
VI Analysis of Assets and Liabilities
1. Significant Changes in Asset Composition
Unit: RMB
30 June 2024 31 December 2023 Reason
Change in
for any
As % of total As % of total percentag
Amount Amount significan
assets assets e (%)
t change
Monetary
1,670,720,493.53 12.14% 1,558,252,048.03 11.60% 0.54%
assets
Accounts
725,190,840.90 5.27% 826,467,684.78 6.15% -0.88%
receivable
Inventories 2,142,506,737.15 15.56% 2,124,139,574.70 15.82% -0.26%
Investment
19,126,854.90 0.14% 19,578,175.93 0.15% -0.01%
property
Long-term
equity 152,156,574.30 1.11% 143,537,479.77 1.07% 0.04%
investments
Fixed assets 5,921,271,772.02 43.02% 5,597,692,505.07 41.68% 1.34%
Construction in
450,403,383.41 3.27% 868,496,878.41 6.47% -3.20%
progress
Right-of-use
474,061,007.77 3.44% 463,226,419.21 3.45% -0.01%
assets
Short-term
598,629,270.46 4.35% 580,704,772.27 4.32% 0.03%
borrowings
Contract
165,982,780.07 1.21% 188,073,335.89 1.40% -0.19%
liabilities
Long-term
706,355,559.41 5.13% 259,992,974.40 1.94% 3.19%
borrowings
Lease liabilities 99,631,923.14 0.72% 86,580,224.41 0.64% 0.08%
2. Major Assets Overseas
Applicable □ Not applicable
Control Material
Manage As % of the
Sourc Locatio measures to Return generated impairme
Asset Asset value (RMB) ment Company’s
e n protect asset (RMB) nt risk
model equity
safety (yes/no)
Main
management
Hong Incor
Hong Marketi personnel sent
Kong porat 224,732,318.66 8,466,357.71 2.32% No
Kong ng by the
project ed
Company as the
parent
Main
management
Incor
America New Marketi personnel sent
porat 1,301,982.12 244,745.70 0.01% No
project York ng by the
ed
Company as the
parent
Main
Investm management
Southeast Incor
Southe ent and personnel sent
Asia porat 4,488,576,072.27 104,476,137.30 46.30% No
ast Asia producti by the
project ed
on Company as the
parent
17
Lu Thai Textile Co., Ltd. Interim Report 2024
3. Assets and Liabilities at Fair Value
Applicable □ Not applicable
Unit: RMB
Impair
ment
Cumulative
Gain/loss on fair- allowa Purchase
fair-value Sold in the
Beginning value changes in nce for d in the Other
Item changes Reporting Ending amount
amount the Reporting the Reportin change
charged to Period
Period Reporti g Period
equity
ng
Period
Financial assets
1. Held-for-
trading financial
713,539,24 672,455, 572,017,77
assets (excluding -73,666,442.19 740,310,057.10
derivative 3.86 029.38 3.95
financial assets)
2. Derivative 10,261,031. 2,108,00 6,125,900.0
-4,942,381.29 1,300,750.24
financial assets 53 0.00 0
5. Other non-
88,750,000.
current financial 88,750,000.00
assets 00
Subtotal of 812,550,27 674,563, 578,143,67
-78,608,823.48 830,360,807.34
financial assets 5.39 029.38 3.95
-
18,248,205.
Others -47,513.49 11,278,478. 6,922,213.41
76
86
-
830,798,48 674,563, 578,143,67
Total of the above -78,608,823.48 -47,513.49 11,278,478. 837,283,020.75
1.15 029.38 3.95
86
Financial 46,785,831. 218,400.
33,931,003.79 218,400.00 80,716,835.26
liabilities 47 00
Content of other change:
Changes in accounts receivable financing.
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□Yes No
4. Restricted Asset Rights as at the Period-End
For details, see Part X. VII. 22. Assets with restricted ownership and using right in this Report.
VII Investments Made
1. Total Investment Amount
□Applicable Not applicable
2. Major Equity Investments Made in the Reporting Period
□Applicable Not applicable
18
Lu Thai Textile Co., Ltd. Interim Report 2024
3. Major Non-Equity Investments Ongoing in the Reporting Period
□Applicable Not applicable
4. Financial Investments
(1) Securities Investments
□Applicable Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
Applicable □ Not applicable
1) Derivative Investments for Hedging Purposes during the Reporting Period
Applicable □ Not applicable
Unit: RMB'0,000
Proportion of
Gain/loss on
Cumulative closing
fair-value Purchased Endin
Initial fair-value Sold in the investment
Type of Beginning changes in in the g
investmen changes Reporting amount in the
derivative amount the Reporting amou
t amount recorded in Period Company’s
Reporting Period nt
equity ending net
Period
assets
Foreign
56,400 56,400 0 0 0 56,400 0 0.00%
exchange option
Total 56,400 56,400 0 0 0 56,400 0 0.00%
Whether
significant
changes occurred
to the
Company’s
accounting
policy and
specific No significant changes
accounting
principles of
derivatives in the
Reporting Period
compared to the
previous
Reporting Period
1. As of 30 June 2024, the Company held 0 undue financial derivatives contracts.
Actual gain/loss
2. From January to June 2024, the total amount of all due financial derivatives of the Company was
in the Reporting
equivalent to USD94 million, which were all implemented based on contracts. USD94 million of these
Period
contracts was settled, incurring a net loss of RMB2.7570 million.
The Company conducts foreign exchange (FX) derivative transactions with the intention of hedging.
Effectiveness of Specifically, the business is carried out to fix costs, avoid exchange rate risks and improve resistance against
hedges FX rate fluctuations. As a result, the Company has gained better capabilities of avoiding and preventing the
risks of FX rate fluctuations, and the financial robustness of the Company has been enhanced.
Capital source
for derivative The Company’s own money
investment
Analysis on risks The Company conducted derivatives products transaction in order for hedging. And the forward settlement
and control hedging was operated by installments, with the relevant amount not more than the planned derivatives
19
Lu Thai Textile Co., Ltd. Interim Report 2024
measures of products transactions. And all derivatives products transaction was zero-deposit. Meanwhile, the Company
derivative had a complete risk control system for sufficient analysis and prevention of possible risks such as market risk,
products held in liquidity risk and credit risk, operation risk and risk of laws and regulation.
the Reporting 1. Market risk: When the international and domestic economic situations change, the corresponding changes
Period (including in exchange rates and interest rates may have an adverse impact on the financial derivative transactions of the
but not limited to Company. Precautions: The Company chooses financial instruments with simple structures, high liquidity and
market risk, controllable risk and strictly controls the scale of derivative transactions, performing them by stages and in
liquidity risk, batches. Means such as extension and balance settlement can be adopted to ensure contract performance after
credit risk, the contract expires.
operation risk, 2. Liquidity risk and credit risk: Credit risk arises when the Company or counterparties in transactions
law risk, etc.) couldn’t perform contracts due now, to liquidity or other factors that result in further economic loss.
Precautions: The derivative transactions can only be done with financial institutions qualified for derivative
transactions, as authorized by relevant national authorities or financial or foreign exchange authorities in the
country or region where the Company operates. Derivative transactions with other institutions or individuals
are not allowed so as to control related risk concerning counterparties.
3. Internal risk control: Derivative transactions are highly specialized and complex. Therefore, there is a risk
of loss in derivative transactions due to the imperfect internal control system when business is performed.
Precautions: The Company should strictly implement Management Policy for Investments in Securities and
Derivative Transactions of Lu Thai Textile Co., Ltd., continuously optimize the business operation process
and authorization management system, strengthen professional ethics education and business training for
relevant personnel, clarify job responsibilities, engage in derivative transaction business strictly within the
scope of authorization, and establish a timely reporting system for abnormal conditions to avoid operational
risks.
4. Risk of laws and regulation: Derivative transactions of the Company must be strictly in compliance with
relevant national laws and regulations. Otherwise, signed contracts, commitments and other legal documents
may entail compliance risk and regulatory risk in terms of effectiveness and enforceability. Precautions: The
Company should strengthen the supervision and inspection of the standardization of derivative transactions,
the effectiveness of internal control mechanism, and the authenticity of information disclosure to avoid
possible legal risks. The Company has fulfilled relevant approval procedures for its derivative transactions
business, which is in line with the relevant national laws, regulations, the Articles of Association, the
Management Rules of Lu Thai for Derivatives Trading, and the Proposal on the Company's Derivative
Transaction Plan deliberated and adopted at the ninth meeting of the 10th session of the Board of Directors
held on 26 May 2023, and fulfilled the relevant information disclosure obligations.
Changes of
market prices or
fair values in the
Reporting Period
of the invested In accordance with the relevant provisions and guidelines of the Accounting Standards for Business
derivatives. And Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the Accounting Standards
the analysis on for Business Enterprises No. 37 - Presentation of Financial Instruments issued by the Ministry of Finance, the
the fair value of Company took the relevant accounting measures for its business of FX derivative transactions to reflect the
the derivatives relevant items in the balance sheet and the income statement. During the Reporting Period, the Company
should include determined the fair value of FX options based on the bank’s forward option quotations at the end of the
the specific use period.
methods and the
relevant
assumptions and
parameters.
Lawsuit (if
N/A
applicable)
Disclosure date
of board of
directors
announcement
27 May 2023
on approval of
derivative
investment (if
any)
2) Derivative Investments for Speculative Purposes during the Reporting Period
□ Applicable Not applicable
No such cases in the Reporting Period.
20
Lu Thai Textile Co., Ltd. Interim Report 2024
5. Use of Funds Raised
Applicable □ Not applicable
(1) Overall Use of Funds Raised
Applicable □ Not applicable
Unit: RMB’0,000
Cumula
Total of
tive Ratio of
raised
Cumula amount cumulat Amoun
Total of capital
tive of ive Purpose and t of
Net raised which Total of
Raisi Total of amount raised amount direction of raised
Raising capital purpose raised
ng raised proceed of capital which raised capital
manner used in is capital
year capital s raised which purpose capital unused
this change unused
capital purpose is unused for two
period d in the
used is change years
report
change d
period
d
Deposited in
Convert
141,739 51,371. 2,490.3 the raised
2020 ible 140,000 138,546 7,241.65 0 36.69% 0
bonds .49 58 8 capital
account
141,739 51,371. 2,490.3
Total -- 140,000 138,546 7,241.65 0 36.69% -- 0
.49 58 8
General use situation of raised capital
(I) Amount of actual raised capital and arrival date
Upon approval by China Securities Regulatory Commission in the document “ZJXK [2020]299”, the Company publically issued
14,000,000 convertible bonds on 9 April 2020 at par value RMB 100, the issued amount was RMB 1.4 billion, and the Company
actually received the amount of raised capital RMB 1.388 billion after deducted the underwriting fee RMB 12 million. The above
amount was remitted in cash in RMB. After deducted legal fee, accountant fee, credit rating fee, information disclosure fee, issuing
commission and other costs RMB 2.54 million in total from the above actually raised capital, the net amount of raised capital was RMB
1385.46 million, which entered the account on 15 April 2020, and Grant Thornton International Ltd (Special General Partnership) issued
the capital verification report with reference No. Grant Thornton Verification [2020] 371ZC0090 for it after verification.
(II) Use situation and balance of raised capital
As at 30 June 2024, the Company directly invested RMB1,417.3949 million in total from the raised capital for its raised capital
investment projects. The unused amount was RMB24.9038 million.
(2) Commitments on Projects with Funds Raised
Applicable □ Not applicable
Unit: RMB’0,000
Whether
the
Total of Amou Cumulativ Investmen
Committed projects Date when Whether
committ Total nt e t progress Benefit Whether
investment are the project reached
ed investme investe investmen realized project
projects and changed by the end reached the the
investme nt after d in t amount in this feasibility
use direction (includin of period intended expecte
nt of modifica this by the end report changed
of over raised g (3) ＝ available d
raised tion (1) report of period period significantly
capital partially (2)/(1) status benefit
capital period (2)
changed
projects)
Committed investment projects
Functional 31
58,628.4
fabric smart Yes 85,000 0 58,628.42 100.00% December 0 N/A No
eco-park 2
2024
21
Lu Thai Textile Co., Ltd. Interim Report 2024
project
(Phase 1)
Overseas
high-end
31
fabric 2,176.
Yes 25,000 34,000 33,158.2 97.52% December 0 N/A No
product line 77
2024
project
(Phase I)
Supplement
46,171.5 5,064.
working Yes 28,800 49,952.87 108.19% 0 N/A No
capital 8 88
Subtotal of
committed 7,241. 141,739.4
-- 138,800 138,800 -- -- 0 -- --
investment 65 9
projects
Use direction of over raised capital
N/A
Repayment
of bank loans -- 0 0 0 0 0.00% -- -- -- --
(if any)
Supplement
working
-- 0 0 0 0 0.00% -- -- -- --
capital (if
any)
Subtotal of
use director
-- 0 0 0 0 -- -- -- --
of over raised
capital
7,241. 141,739.4
Total -- 138,800 138,800 -- -- 0 -- --
65 9
Explain
project by
project
situation and
reasons that
it did not
reach the
planned
progress or The functional fabric smart eco-park project (Phase 1) is in the technology and production ramp-up stage, and the overseas
expected high-end fabric product line project (Phase I) is in the production ramp-up stage. These projects have not yet formed a large-
return scale production or achieved the expected revenue.
(including
reason for
inputting
“N/A” for
“Whether
reached the
expected
benefit”)
Note for
significant
change of N/A
project
feasibility
Amount,
purpose and
use progress N/A
of over raised
capital
Change of
N/A
implementati
22
Lu Thai Textile Co., Ltd. Interim Report 2024
on site of
capital
raising
project
Adjustment
of
implementati
on mode of N/A
capital
raising
project
Advance Applicable
investment
and
By 30 April 2020, the total amount of displaced capital was RMB191.4288 million, including the amount RMB 189.8388
displacement
million invested in the project with the self-raised capital of the Company in advance, and payment of issuing cost RMB1.59
of capital
million with its self-raised capital.
raising
project
Temporary
supplement
to working
N/A
capital with
unused raised
capital
Balance of
raised capital
after
implement of N/A
project and
relevant
reasons
Purpose and
use direction
By 30 June 2024, RMB24.9038 million of unused raised capital was deposited in the raised capital account.
of unused
raised capital
Problems
existing in
use and
information
None
disclosure of
raised capital
or other
situation
(3) Changes in Projects with Funds Raised
Applicable □ Not applicable
Unit: RMB’0,000
Amount
Accumula
of Actual Whether
tive Investment Realized Whether
Correspondi planned investmen Date of occurred
Items investmen schedule as income in reached
ng original funds t amount reaching significant
after t amount the period- the anticipat
committed invested in the intended use changes in
changes as the end Reporting ed
items after Reporting of the project project
period- (3)=(2)/(1) Period income
changes Period feasibility
end (2)
(1)
Overseas High-end 34,000 2,176.77 33,158.2 97.52% 31 December 0 N/A No
23
Lu Thai Textile Co., Ltd. Interim Report 2024
high-end printing and 2024
fabric dyeing
productio fabric
n line production
project line project,
(Phase I) functional
fabric smart
eco-park
project
Total -- 34,000 2,176.77 33,158.2 -- -- 0 -- --
In accordance with the Company's global strategic layout and market demand, the Company
planned to adjust its capacity structure.
1. On 9 June 2022, the second extraordinary general meeting and the first bondholders' meeting of
2022 deliberated and adopted the Proposal on Changing the Purpose of Partial Raised Capital
Unused. The aim was to terminate the "High-end printing and dyeing fabric production line
project" and leverage the raised capital of this project of RMB250 million for construction of
overseas high-end fabric production line project (Phase I), disclosed on 10 June 2022 on the
Notes of reasons for changes, decision-
cninfo website ("www.cninfo.com.cn").
making procedures and information
disclosure (by specific items) 2. On 25 September 2023, the second extraordinary general meeting and the first bondholders'
meeting of 2023 deliberated and adopted the Proposal on Changing the Purpose of Partial Raised
Capital Unused. The Company decided to repurposed the remaining raised funds of the
“functional fabric smart eco-park project (Phase I) implemented by its majority-owned subsidiary
Shandong Lulian New Materials Co., Ltd., using RMB90 million of the remaining raised funds
for the “overseas high-end fabric production line project (Phase I)”, which have been disclosed on
the cninfo website ("www.cninfo.com.cn") dated 26 September 2023 and 27 September 2023,
respectively.
Condition and reason for not reaching
the schedule and anticipated income N/A
(by specific items)
Notes of condition of significant
changes occurred in project feasibility N/A
after changes
VIII Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□Applicable Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□Applicable Not applicable
IX Major Subsidiaries
Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net
profit:
Unit: RMB
Rela
Princ
tions
ipal Registered Operating
Name hip Total assets Net assets Operating profit Net profit
activi capital revenue
with
ty
the
24
Lu Thai Textile Co., Ltd. Interim Report 2024
Com
pany
Lufeng
Subs
Weaving Fabri
idiar 706160000 1,636,673,080.72 1,492,494,621.19 642,748,692.32 51,824,048.64 43,872,724.61
& Dyeing c
y
Co., Ltd.
Shandong
Lulian Subs
Fabri
New idiar 400000000 653,479,913.26 79,075,762.76 54,051,010.62 -23,926,962.11 -23,833,476.77
c
Materials y
Co., Ltd.
Subsidiaries obtained or disposed in the Reporting Period:
□Applicable Not applicable
Information about major majority- and minority-owned subsidiaries:
LuFeng Company Limited (hereinafter referred to as “LuFeng”) is the holding subsidiary of the Company. Registration place: Zibo,
Shandong; registered capital: RMB706.160 million. The mainly manufacturing and selling textile printing and dyeing products and
the products of clothing and garments, and it were authenticated to be high-tech enterprise in October 2014. During the Reporting
Period, LuFeng increased its capacity utilisation rate and enhanced the economies of scale.
Shandong Lulian New Materials Co., Ltd. (hereinafter referred to as "Lulian New Materials") is the holding subsidiary of the
Company. Registration place: Zibo, Shandong; registered capital: RMB 400 million. It was established in April 2019 and mainly
manufacturing and selling functional fabrics. During the Reporting Period, the relevant expenses were reduced. As approved at the
23rd Meeting of the 10th Board of Directors, the Company acquired 25% equity interests in Lulian New Materials held by the Hong
Kong-based TAL Apparel Limited with its own funds of RMB25.9252 million. The registration of the change of equity interests was
completed on 12 July 2024, and Lulian New Materials has become a wholly-owned subsidiary of the Company.
X Structured Bodies Controlled by the Company
□Applicable Not applicable
XI Risks Facing the Company and Countermeasures
1. Impact of economic environment: under the uncertainty risk of the global economic environment, the geopolitical conflict risk and
the weak economic growth, the Company will face challenges in terms of international trade policies and market changes. In
response, the Company will rely on its global business network and vertical industrial chain, further utilize various resources at home
and abroad, and keep developing domestic and overseas markets.
2. Price fluctuation of raw materials: cotton is the major production material of the Company, and the price of cotton is impacted
by market supply and demand, climate, policy, exchange rate and other factors. Therefore, the Company coordinates domestic and
overseas production, deeply studies the information of global cotton market, properly works out procurement strategy and gives
full play to the advantages of global procurement of high-quality raw cotton.
3. Change of exchange rate: the Company has a large ratio in import and export business, which is mostly settled in USD. In recent
years, the bi-directional fluctuations in RMB exchange rate have become increasingly normal, with a significant increase in
exchange rate flexibility. To lower the impact of exchange rate fluctuations, the Company stuck to the risk-neutral management
philosophy. Based on actual needs arising from production and operations, it incorporated exchange rate risks into routine
operations management, and flexibly allocated different types and maturities of foreign exchange derivatives for hedging purposes
to minimize the influence of exchange rate risks on its operating results. Firstly, the Company appropriately conducted foreign
exchange hedging, using financial derivatives such as forwards, swaps, and option portfolios to avoid currency risks. Secondly, the
25
Lu Thai Textile Co., Ltd. Interim Report 2024
Company made reasonable arrangement on settlement day and currency and vigorously promoted cross-border settlement with
RMB to avoid exchange rate-related risks. Thirdly, the Company adjusted the Renminbi and foreign-currency liabilities structure
to actively prevent currency fluctuation risks.
XII Implementation of the “Quality and Earnings Dual Improvement” Action Plan
Indicate whether the Company has disclosed the “Quality and Earnings Dual Improvement” Action Plan.
□ Yes No
26
Lu Thai Textile Co., Ltd. Interim Report 2024
Part IV Corporate Governance
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor
Meeting Type participatio Convened date Disclosure date Index to disclosed information
n ratio
10 proposals were approved,
The First including the Proposal on
Extraordina
Extraordinary
ry General 33.02% 5 February 2024 6 February 2024 Amending Certain Provisions
General Meeting
Meeting of the Articles of Association of
of 2024
Lu Thai Textile Co., Ltd.
Six proposals were approved,
Annual
The 2023 Annual including the Proposal on 2023
General 35.28% 15 May 2024 16 May 2024
General Meeting Annual Work Report of the
Meeting
Board of Directors.
Two proposals were approved,
The Second including the Proposal on the
Extraordina
Extraordinary By-election of Mr. Shang
ry General 34.62% 14 June 2024 15 June 2024
General Meeting Chenggang as a Supervisor of
Meeting
of 2024 the 10th Supervisory
Committee.
2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed
Voting Rights
□Applicable Not applicable
II Change of Directors, Supervisors and Senior Management
Applicable □ Not applicable
Name Office title Type of change Date Reason
Fujiwara Matsuzaka Senior management Dismissed 2 January 2024 Job arrangement
Zhang Keming Board Secretary Dismissed 19 April 2024 Job arrangement
Zheng Weiyin Board Secretary Appointed 25 April 2024
Shang Chenggang Senior management Dismissed 25 May 2024 Job arrangement
Chairman of the
Zhang Shougang Supervisory Resignation 14 June 2024 Personal reason
Committee
Chairman of the
Shang Chenggang Supervisory Elected 14 June 2024
Committee
III Interim Dividend Plan
Applicable □ Not applicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB) (tax inclusive) 1.00
27
Lu Thai Textile Co., Ltd. Interim Report 2024
Total shares as the basis for the profit distribution proposal
817,305,896
(share)
Cash dividends (RMB) (tax inclusive) 81,730,589.60
Cash dividends in other forms (such as share repurchase)
37,866,957.62
(RMB)
Total cash dividends (including those in other forms) (RMB) 119597547.22
Distributable profit (RMB) 5,894,332,490.12
Total cash dividends (including those in other forms) as % of
100%
total profit distribution
Cash dividend policy
If the Company is in a mature development stage and has plans for any significant expenditure, in profit allocation, the ratio of
cash dividends in the profit allocation shall be 40% or above.
Details about the proposal for profit distribution and converting capital reserve into share capital
The Company plans to distribute a cash dividend of RMB1.00 (inclusive of tax) for every 10 shares, based on a capital base of
817,305,896 shares. The total amount of dividends calculated on this basis is RMB81,730,589.60.The individual income tax for A
Share shall be subject to related regulations under CS [2015] No. 101 Notice on Certain Question about the Differentiated
Individual Income Tax Policy for Cash Dividend of Listed Companies jointly issued by Ministry of Finance, SAT, and CSRC;
and that for B Share shall be conversed to HKD based on the central parity rate on interbank exchange market released by the
People’s Bank of China on the following day after shareholder’s meeting (for domestic individual shareholders, tax is paid
pursuant to CS [2015] No. 101; for foreign shareholders, tax is free pursuant to CSZ (1994) No. 020 regulations; and non-
residential corporate shareholders is entitled to a 10% reduction of enterprise income tax according to related regulations under
Enterprise Income Tax Law of the People’s Republic of China). Since the Company is in the period of transferring convertible
bonds into shares, the profit distribution will be conducted based on the total share capital on the equity registration date for
implementing this profit distribution plan with no change in the amount per share.
IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
for Employees
Applicable □ Not applicable
1. Equity Incentive
Deliberation
No. Relevant meeting Overview of execution Disclosure index
time
18th Meeting of the The Board of Directors reviewed and approved the Proposal on
10th Board of Repurchase and Cancel Authorized but Unlocked Restricted Share of For details, see the relevant
19 January Directors and 12th the Incentive Personnel not Conforming to the Incentive Condition. documents disclosed on 20
1
2024 Meeting of the 10th The Supervisory Committee reviewed and approved the foregoing January 2024 on
Supervisory proposal and issued the written review opinion. Beijing DHH Law www.cninfo.com.cn.
Committee Firm Qingdao Office issued a legal opinion.
It deliberated on and approved the Proposal on Repurchase and Cancel
For details, see the relevant
First Extraordinary Authorized but Unlocked Restricted Share of the Incentive Personnel
5 February announcement (No.: 2024-012)
2 General Meeting of not Conforming to the Incentive Condition and disclosed the
2024 disclosed on 7 February 2024
2024 Announcement of Capital Reduction on Repurchase and Cancel Partial
on www.cninfo.com.cn.
Restricted Shares on 7 February 2024.
The Board of Directors reviewed and approved the Proposal on the
Achievement of Lifting the Restriction Conditions in the Second
Restriction Period for the Reserved Shares for Grant under the 2021
20th Meeting of the
Restricted Share Incentive Scheme. The Supervisory Committee
10th Board of For details, see the relevant
reviewed and approved the foregoing proposal and issued the written
10 April Directors and 13th announcement disclosed on 12
3 review opinion. Beijing DHH Law Firm Qingdao Office issued a legal
2024 Meeting of the 10th April 2024 on
opinion. The number of subjects of incentive meeting the restriction
Supervisory www.cninfo.com.cn.
lifting conditions in the second restriction period for the reserved
Committee
shares for grant under the 2021 Restricted Share Incentive Scheme of
the Company was up to 340, and a total of 2.9015 million restricted
shares were lifted out of restrictions.
28
Lu Thai Textile Co., Ltd. Interim Report 2024
As audited and confirmed by Shenzhen Stock Exchange and the
For details, see the relevant
Shenzhen Branch of China Clear, the procedures of repurchasing and
24 April announcement (No.: 2024-030)
4 - canceling 66,500 shares of authorized and unlocked restricted share of
2024 disclosed on 24 April 2024 on
the incentive personnel not conforming to the incentive condition were
www.cninfo.com.cn.
completed.
It issued the Indicative Announcement on the Trading on the Market of For details, see the relevant
27 April Lifting the Restriction in the Second Restriction Period for the announcement (No.: 2024-035)
5 -
2024 Reserved Shares for Grant of the 2021 Restricted Share Incentive disclosed on 27 April 2024 on
Scheme. The date for trading was from 6 May 2024. www.cninfo.com.cn.
The Board of Directors reviewed and approved the Proposal on the
Achievement of Lifting the Restriction Conditions in the Third
Restriction Period for the First Grant of the 2021 Restricted Share
Incentive Scheme and the Proposal on Repurchase and Cancel
22nd Meeting of the
Authorized but Unlocked Restricted Share of the Incentive Personnel
10th Board of For details, see the relevant
not Conforming to the Incentive Condition. The Supervisory
Directors and 15th announcement disclosed on 29
6 28 May 2024 Committee reviewed and approved the foregoing two proposals and
Meeting of the 10th May 2024 on
issued the written review opinions. Beijing DHH Law Firm Qingdao
Supervisory www.cninfo.com.cn.
Office issued a legal opinion. The number of subjects of incentive
Committee
meeting the restriction lifting conditions in the third restriction period
for the first grant of the 2021 Restricted Share Incentive Scheme of the
Company was up to 704, and a total of 6.9015 million restricted shares
were lifted out of restrictions.
It issued the Indicative Announcement on the Trading on the Market of For details, see the relevant
Lifting the Restriction in the Third Restriction Period for the First announcement (No.: 2024-047)
7 4 June 2024 -
Grant of the 2021 Restricted Share Incentive Scheme. The date for disclosed on 4 June 2024 on
trading was from 7 June 2024. www.cninfo.com.cn.
It deliberated on and approved the Proposal on Repurchase and Cancel
Second For details, see the relevant
Authorized but Unlocked Restricted Share of the Incentive Personnel
Extraordinary announcement (No.: 2024-051)
8 14 June 2024 not Conforming to the Incentive Condition and disclosed the
General Meeting of disclosed on 15 June 2024 on
Announcement of Capital Reduction on Repurchase and Cancel Partial
2024 www.cninfo.com.cn.
Restricted Shares on 15 June 2024.
2. Implementation of Employee Stock Ownership Plan
□Applicable Not applicable
3. Other Incentive Measures for Employees
Applicable □ Not applicable
For the second restricted period of the reserved grant of shares of the 2021 restricted share incentive scheme, the restricted shares
were released for trading on 6 May 2024. Excluding directors and senior executives, the Company lifted the restrictions on 2.4265
million restricted shares for 331 mid-level managers and core personnel. For the third restricted period of the initial grant of shares
of the 2021 restricted share incentive scheme, the restricted shares were released for trading on 7 June 2024. Excluding directors
and senior executives, the Company lifted the restrictions on 6.3915 million restricted shares for 695 mid-level managers and core
personnel.
29
Lu Thai Textile Co., Ltd. Interim Report 2024
Part V Environmental and Social Responsibility
I Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the
environmental protection authorities of China.
Yes □No
Policies and industry standards pertaining to environmental protection
During production and operation, Lu Thai Textile Co., Ltd. and its subsidiaries, LuFeng Company Limited and Shandong Lulian
New Materials Co., Ltd., Zibo Xinsheng Thermal Power Co., Ltd., are subject to the following laws and regulations and industry
standards related to environmental protection: The Environmental Protection Law of the People’s Republic of China, the Law of
the People’s Republic of China on Prevention and Control of Water Pollution, the Law of the People’s Republic of China on the
Prevention and Control of Atmospheric Pollution, the Law of the People’s Republic of China on the Prevention and Control of
Solid Waste Pollution, the Contingency Management Measures for Environmental Emergencies, the Emission Standards of Water
Pollutants in Textile Dyeing and Finishing Industry (GB4287-2012), the Standard for Pollution Control on the Municipal Solid
Waste Incineration (GB18485-2014), and the Emission Standard of Air Pollutants of Thermal Power Plants (DB37/664-2019).
Status of environmental protection administrative license
Lu Thai Textile Co., Ltd. and its subsidiaries, including LuFeng Company Limited, Shandong Lulian New Materials Co., Ltd., and
Zibo Xinsheng Thermal Power Co., Ltd. carried out pollutant discharge permit management and were granted the pollutant
discharge permit by the Ecology and Environment Bureau of Zibo. The current pollutant discharge permit of Lu Thai Textile Co.,
Ltd. is valid until 9 June 2026; that of LuFeng Company Limited is valid until 22 November 2026; that of Shandong Lulian New
Materials Co., Ltd. is valid until 25 October 2026; that of Zibo Xinsheng Thermal Power Co., Ltd. is valid until 22 June 2025.
The regulations for industrial emissions and the particular requirements for controlling pollutant emissions those are associated
with production and operational activities.
Num
ber
Way Distribut Discharge Exce
Type of Name of of Discharge Approved
Name of of ion of concentrat Total ssive
major major disch standards total
polluter disch discharg ion/intensi discharge disch
pollutants pollutants arge implemented discharge
arge e outlets ty arge
outle
ts
Chief
discharg
e outlet Emission
of standard of
Huangjia COD≤200 water COD： COD:
Conti 134.606t;
Lu Thai COD and pu mg/L;am pollutants in 1495.08t,
nuous
Textile Sewage ammonia 2 Industria monia textile ammonia ammonia No
disch
Co., Ltd nitrogen l Park ; nitrogen≤2 dyeing and nitrogen nitrogen:
arge
chief 0mg/L finishing 1.346t 149.51t
discharg industry GB
e outlet 4287-2012
of East
Zone
Chief Emission
discharg COD≤200 standard of COD： COD is
LuFeng Conti 52.137t;
COD and e outlet mg/L;am water 653.53t,
Compan nuous
Sewage ammonia 1 of monia pollutants in ammonia ammonia No
y disch
nitrogen LuFeng nitrogen≤2 textile nitrogen nitrogen
Limited arge
Compan 0mg/L dyeing and 0.508t is 65.3t
y finishing
30
Lu Thai Textile Co., Ltd. Interim Report 2024
Limited industry GB
4287-2012
Emission
standard of
Shandon Chief COD：
COD≤200 water COD is
g Lulian Conti discharg 8.03t;
COD and mg/L; pollutants in 175.30t,
New nuous e outlet
Sewage ammonia 1 ammonia textile ammonia ammonia No
Material disch of Lulian
nitrogen nitrogen≤2 dyeing and nitrogen nitrogen
s Co., arge New
0mg/L finishing 0.189t is 17.5t
Ltd. Materials
industry GB
4287-2012
Emission
SO2： standard of
Zibo Orga SO2: SO2 is
air pollutants
Xinshen nized ≤35mg/m3 11.16t, 236.13t/a,
SO2, of Thermal
g conti Producti , NQx： NQx :
Waste gas NQx, and 4 Power Plant NQx : No
Thermal nuous on plant ≤50mg/m3 674.63t/a,
PM in Shandong 88.9t, PM:
Power disch , PM: PM:
Province 3.48t
Co., Ltd. arge ≤5mg/m3 67.47t/a.
DB37/664-
2019
Treatment of pollutants
Lu Thai Textile Co., Ltd. (hereinafter referred to as “the Company”) and its subsidiary Lufeng Weaving & Dyeing Co., Ltd.
(hereinafter referred to as “Lufeng Weaving & Dyeing”) and Shandong Lulian New Materials Co., Ltd. (hereinafter referred to as
“Lulian New Materials”) strictly implement the “Three Simultaneous” management system for environmental protection in project
constructions. The companies are equipped with complete facilities for waste gas and waste water treatment. Lu Thai Textile Co.,
Ltd. and its majority-owned subsidiary Lufeng Weaving & Dyeing Co., Ltd. and Shandong Lulian New Materials Co., Ltd.
continuously optimize the dyeing waste water treatment progress, improve the treated water quality, ensure that the pollutant
emission concentration is better than the national standard, further improve the river water quality and local ecological
environment. The Company and Lufeng Weaving & Dyeing centralizedly collected and coped with the dyeing and finishing waste
gas, so as to greatly reduce the pollutant emission concentration. Online supporting monitoring facilities were built, whose data
was uploaded to the government environmental monitoring system, to comprehensively monitor the Company's emission
pollutants such as waste water and waste gas. Support teams were set up to be responsible for daily operation maintenance and
inspection to guarantee the normal operation of facilities. Both the exhaust emission and waste water discharge meet the emission
standards.
The subsidiary Zibo Xinsheng Thermal Power Co., Ltd. (hereinafter referred to as “Xinsheng Thermal Power”) enforces the
“Three Simultaneous” management system for environmental protection in extension project construction in accordance with the
government requirements, and adopts the “limestone-gypsum method” to reduce emission concentration of sulfur dioxide, the
“Low-nitrogen combustion + SNCR” and “SNCR+SCR method” to reduce emission concentration of nitrogen oxides, and the
“electric-bag electrostatic precipitator + wet electrostatic precipitator” to reduce soot emission concentration. The overall system
works well.
Emergency plan for environmental incidents
In order to prevent environmental pollution accidents, the Company and the subsidiary Lufeng Weaving & Dyeing and Lulian
New Materials respectively prepared the Emergency Plan for Environmental Incidents, which were filed with Zibo Environmental
Protection Bureau Zichuan Branch. The Plan includes contents such as environmental risk sources identification and risk
assessment, prevention and early warning mechanism, emergency security, and supervision and management.
The subsidiary Zibo Xinsheng Thermal Power Co., Ltd. has formulated the “Emergency Plan for Environmental Incidents” and
filed it with the ecological and environmental management department. The identification and risk assessment of environmental
risk sources, prevention and early warning mechanisms, emergency protection and supervision and management were included in
the plan.
31
Lu Thai Textile Co., Ltd. Interim Report 2024
Input in environment governance and protection and payment of environmental protection tax
During the Reporting Period, the input in environment governance and protection and payment of environmental protection tax for
the Company and the subsidiary Lufeng Weaving & Dyeing, Lulian New Materials and Xinsheng Thermal Power are
RMB22.7273 million in total, among which, RMB22.0435 million for input in environment governance and protection and
RMB683,800 for payment of environmental protection tax.
Environmental self-monitoring program
In accordance with the requirements of the competent environment authorities, the Company and the subsidiary Lufeng Weaving
& Dyeing and Lulian New Materials observed the requirements of the superior environmental protection department to install
automatic wastewater monitoring facilities and achieve real-time monitoring of wastewater discharge. Besides, the automatic
environment monitoring plan was prepared as required by emission permit. In addition, they invited a qualified testing institution
to conduct tests on sewage and waste gas based on the frequency of monitoring, disclosed the monitoring data in time, and
submitted the test reports to the competent environment authorities ensuring the monitoring data is true and valid.
The subsidiary Zibo Xinsheng Thermal Power Co., Ltd. has implemented online real-time monitoring of environmental data in
accordance with the requirements of the superior environmental protection department, and has achieved emission standards.
Administrative penalties imposed for environmental issues during the Reporting Period
Influence on
Rectification
Name Reason Case Result production and
measures
operation
N/A N/A N/A N/A N/A N/A
Other environment information that should be disclosed
None
Measures taken to decrease carbon emission in the Reporting Period and corresponding effects
Applicable □ Not applicable
None
Other environmental information
None
The Company is subject to the disclosure requirements for listed companies engaging in textile and apparel as stated in Guideline
No. 3 of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.
Related environmental accidents information
None
II Social Responsibility
Not applicable
32
Lu Thai Textile Co., Ltd. Interim Report 2024
Part VI Significant Events
I Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting
Period or Ongoing at the Period-End
Applicable □ Not applicable
Date of
Type of
Commitm Promiso commitm Term of Fulfillmen
commitme Details of commitment
ent r ent commitment t
nt
making
1. Not intervene the Company’s operation and
management beyond the authority and not
occupy the Company’s interests. 2. From the
issuance date of this commitment to the
completion of the implementation of the
Company's public offering of A-share
Dilution of convertible corporate bonds, if the CSRC
at sight makes other new regulatory provisions on
Controll
returns on remedial measures for returns and the
ing
public commitment, and the above commitment fails
shareho From 23
offering to meet the requirements of the CSRC, the 23 May
lder, May 2019 to On-going
A-share company / I promise to issue supplementary 2019
actual 8 April 2026
convertibl commitment then in accordance with the latest
controll
e regulations of CSRC. 3. Commitment is made
er
corporate to fulfill the Company's relevant remedial
bonds 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.
Commitm 1. Commitment is made not to transfer benefits
ents made to other units or individuals free of charge or
in time of under unfair conditions, and no other ways
IPO or damaging the interests of the Company will be
refinancin taken. 2. I will strictly abide by the budget
g management of the Company, and accept the
strict supervision and management of the
Company to avoid waste or excessive
consumption. Any position-related
Dilution of consumption behaviors of me will occur within
Director at sight the scope necessary for the performance of my
s and returns on duties. 3. Commitment is made not to use the
senior public Company's assets to engage in investment and
From 23
manage offering consumption activities unrelated to the 23 May
May 2019 to On-going
ment of A-share performance of duties. 4. Commitment is made 2019
8 April 2026
the convertibl that the remuneration system developed by the
Compa e Board of Directors or the Remuneration
ny corporate Committee is linked to the implementation of
bonds 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
33
Lu Thai Textile Co., Ltd. Interim Report 2024
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
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.
Based on confidence in the Company's future
development and value judgment, to maintain
stability in the capital market, and to promote
Commitm the Company's continuous, stable, and healthy
ent to not development, as well as to protect the interests
Controll reduce of the vast number of investors, the Company's
Other 23 August
ing company controlling shareholders commit: From the date 23 August
commitme 2023 to 22 On-going
shareho share of signing this commitment, not to reduce their 2023
nts August 2024
lder holdings holdings of the Company's shares for a period
within the of one year, including any additional shares
next year arising during the commitment period due to
capital reserve capitalisation, distribution of
stock dividends, rights issues, or additional
issues, etc.
Executed
on time or Not
not
II 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.
III Irregularities in the Provision of Guarantees
□Applicable Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited?
□Yes No
The interim financial statements have not been audited.
V Explanations Given by the Board of Directors and the Supervisory Committee Regarding
the Independent Auditor's “Modified Opinion” on the Financial Statements of the
Reporting Period
□Applicable Not applicable
34
Lu Thai Textile Co., Ltd. Interim Report 2024
VI Explanations Given by the Board of Directors Regarding the Independent Auditor's
“Modified Opinion” on the Financial Statements of Last Year
□Applicable Not applicable
VII Insolvency and Reorganization
□Applicable Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits and arbitrations:
□Applicable Not applicable
No such cases in the Reporting Period.
Other legal matters:
□Applicable Not applicable
IX Punishments and Rectifications
□Applicable Not applicable
No such cases in the Reporting Period.
X Credit Quality of the Company as well as its Controlling Shareholder and De Facto
Controller
□Applicable Not applicable
XI Major Related-Party Transactions
1. Continuing Related-Party Transactions
□Applicable Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□Applicable Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□Applicable Not applicable
No such cases in the Reporting Period.
35
Lu Thai Textile Co., Ltd. Interim Report 2024
4. Credits and Liabilities with Related Parties
□Applicable Not applicable
No such cases in the Reporting Period.
5. Transactions with Related Finance Companies
□Applicable Not applicable
The Company did not make deposits in, receive loans or credit from and was not involved in any other finance business with any
related finance company or any other related parties.
6. Transactions with Related Parties by Finance Companies Controlled by the Company
□Applicable Not applicable
The finance company controlled by the Company did not make deposits, receive loans or credit from and was not involved in any
other finance business with any related parties.
7. Other Major Related-Party Transactions
□Applicable Not applicable
No such cases in the Reporting Period.
XII Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□Applicable Not applicable
No such cases in the Reporting Period.
(2) Contracting
□Applicable Not applicable
No such cases in the Reporting Period.
(3) Leases
□Applicable Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
Applicable □ Not applicable
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Obligor Disclosure Line of Actual Actual Type of Collate Counter- Term of Having Guarantee
36
Lu Thai Textile Co., Ltd. Interim Report 2024
date of the guarante occurren guarant guarant ral (if guarantee guarantee expired for a
guarantee e ce date ee ee any) (if any) or not related
line amount party or
announce not
ment
Guarantees provided by the Company for its subsidiaries
Disclosure
Guarantee
date of the Actual
Line of Actual Type of Collate Counter- Having for a
guarantee guarant Term of
Obligor guarante occurren guarant ral (if guarantee expired related
line ee guarantee
e ce date ee any) (if any) or not party or
announce amount
not
ment
Three years
Wholly-
24 since the
owned 26 August 23,518.4 Joint-
August 204.82 N/A N/A approval of No Yes
subsidiar 2022 4 liability
2022 the board of
y
the Company
Three years
Wholly-
since the
owned 1 July 30 June 4,902.5 Joint-
7,126.8 N/A N/A approval of No Yes
subsidiar 2023 2023 3 liability
the board of
y
the Company
Total actual
Total approved line
amount of such
for such guarantees in
0 guarantees in the 553.54
the Reporting Period
Reporting Period
(B1)
(B2)
Total actual
Total approved line balance of such
for such guarantees at guarantees at the
30,645.24 5,107.35
the end of the end of the
Reporting Period (B3) Reporting Period
(B4)
Guarantees provided between subsidiaries
Disclosure
Guarantee
date of the Actual
Line of Actual Type of Collate Counter- Having for a
guarantee guarant Term of
Obligor guarante occurren guarant ral (if guarantee expired related
line ee guarantee
e ce date ee any) (if any) or not party or
announce amount
not
ment
Total guarantee amount (total of the three kinds of guarantees above)
Total actual
Total guarantee line
guarantee amount
approved in the
0 in the Reporting 553.54
Reporting Period
Period
(A1+B1+C1)
(A2+B2+C2)
Total actual
Total approved
guarantee balance
guarantee line at the
30,645.24 at the end of the 5,107.35
end of the Reporting
Reporting Period
Period (A3+B3+C3)
(A4+B4+C4)
Total actual guarantee amount (A4+B4+C4)
0.55%
as % of the Company’s net assets
Of which:
Balance of guarantees provided for
shareholders, actual controller and their related 0
parties (D)
Balance of debt guarantees provided directly
or indirectly for obligors with an over 70% 0
debt/asset ratio (E)
Amount by which the total guarantee amount
0
exceeds 50% of the Company’s net assets (F)
Total of the three amounts above (D+E+F) 0
37
Lu Thai Textile Co., Ltd. Interim Report 2024
Joint responsibilities possibly borne or already
borne in the Reporting Period for undue N/A
guarantees (if any)
Explanation about external guarantee violating
N/A
established procedure (if any)
Compound guarantees:
N/A
The Company is subject to the disclosure requirements for listed companies engaging in textile and apparel as stated in Guideline
No. 3 of the Shenzhen Stock Exchange for Self-regulation of Listed Companies—Industry-specific Information Disclosure.
Whether the Company provides guarantees or financial assistance for dealers
□Yes No
3. Cash Entrusted for Wealth Management
Applicable □ Not applicable
RMB’0,000
Overdue amount
Specific type Capital resources Amount incurred Undue Balance Overdue amount with provision for
impairment
Bank’s financial
Self-owned funds 29,500 15,000 0 0
products
Bank’s financial
Raised funds 5,000 0 0 0
products
Brokerage
Self-owned funds 24,000 15,000 0 0
financial products
Others Self-owned funds 0 40,000 0 0
Total 58,500 70,000 0 0
Particulars of entrusted cash management with single significant amount or low security, bad liquidity, and no capital preservation
□Applicable Not applicable
Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for
entrusted asset management
□Applicable Not applicable
4. Other Major Contracts
□Applicable Not applicable
No such cases in the Reporting Period.
XIII Other Significant Events
Applicable □ Not applicable
The Proposal on Repurchase of Domestically Listed Foreign Shares (B-Share) was approved at the 10th Meeting of the 10th Board
of Directors and the First Extraordinary General Meeting of 2023. As such, an amount of no more than RMB200 million would be
used to repurchase shares, with a price limit of HKD4.80 per share, within 12 months from the date when the share repurchase
plan was approved at the general meeting. On 21 August 2023, the Company carried out the first repurchase. As of 21 February
2024, the Company had completed the implementation of above-mentioned Repurchase Plan of Domestically Listed Foreign
Shares (B-Share). The Company accumulatively repurchased 46,176,428 B-shares (5.35% of the Company’s total share capital).
With the highest repurchase price being HKD4.80/share and the lowest being HKD4.53/share, the total payment for this
repurchase plan was HKD218,386,229.84 (inclusive of commissions and alike).
38
Lu Thai Textile Co., Ltd. Interim Report 2024
The Company completed the formalities for cancellation of the foregoing repurchased shares at the Shenzhen Branch of China
Securities Depository and Clearing Corporation Limited on 1 March 2024.
XIV Significant Events of Subsidiaries
□Applicable Not applicable
39
Lu Thai Textile Co., Ltd. Interim Report 2024
Part VII Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Sha
res
as
divi Shares
den as
New d dividend
Percentag Percenta
Shares issue con converte Other Subtotal Shares
e (%) ge (%)
s vert d from
ed capital
fro reserves
m
pro
fit
I. Restricted
11,467,817 1.33% -8,712,150 -8,712,150 2,755,667 0.34%
shares
1. Shares held
by State
2. Shares held
by state-owned
legal person
3. Shares held
by other
11,467,817 1.33% -8,712,150 -8,712,150 2,755,667 0.34%
domestic
investors
Among which:
Shares held by
domestic legal
person
Shares held by
domestic natural 11,467,817 1.33% -8,712,150 -8,712,150 2,755,667 0.34%
person
4. Shares held
by other foreign
investors
Among which:
Shares held by
foreign
corporations
Shares
held by foreign
natural person
II. Unrestricted
852,139,817 98.67% -37,530,588 -37,530,588 814,609,229 99.66%
shares
40
Lu Thai Textile Co., Ltd. Interim Report 2024
1. RMB
579,894,874 67.15% 8,649,115 8,649,115 588,543,989 72.00%
ordinary shares
2. Domestically
listed foreign 272,244,943 31.52% -46,179,703 -46,179,703 226,065,240 27.66%
shares
3. Overseas
listed foreign
shares
4. Other
III. Total shares 863,607,634 100.00% -46,242,738 -46,242,738 817,364,896 100.00%
Reasons for share changes:
Applicable □ Not applicable
①Due to the fact that the Company had issued convertible A-share bonds on 9 April 2020, convertible bonds were converted to
190 shares in the period from the beginning of 2024 to 30 June 2024.
②On 6 May and 7 June 2024, 2,901,500 and 6,901,500 shares of equity incentive restricted shares were lifted from restriction,
respectively.
③On 1 March 2024, 46,176,428 domestically listed foreign shares (B shares) were repurchased and canceled.
④66,500 shares of equity incentive restricted shares were repurchased and cancelled.
⑤The shares held by the directors, supervisors and senior management shall be locked and adjusted in accordance with relevant
regulations on executive share management.
Approval of share changes:
Applicable □ Not applicable
①On 10 April 2024, the Company held the 20th Meeting of the 10th Board of Directors and the 13th Meeting of the 10th
Supervisory Committee, and reviewed and approved the Proposal on the Achievement of Lifting the Restriction Conditions in the
Second Restriction Period for the Reserved Shares for Grant under the 2021 Restricted Share Incentive Scheme. Also, the
Company agreed to process the restriction lifting matters for 2,901,500 restricted shares held by 340 incentive personnel who met
the restriction lifting conditions in the second restriction period for the reserved shares for grant under the 2021 Restricted Share
Incentive Scheme.
②On 28 May 2024, the Company held the 22nd Meeting of the 10th Board of Directors and the 15th Meeting of the 10th
Supervisory Committee, and reviewed and approved the Proposal on the Achievement of the Lifting Restriction Conditions in the
Third Restriction Period for the First Grant of the 2021 Restricted Share Incentive Scheme. Also, the Company agreed to process
the restriction lifting matters for 6,901,500 restricted shares held by 704 incentive personnel who met the restriction lifting
conditions in the third restriction period for the first grant of the 2021 Restricted Share Incentive Scheme.
③The Company held the 10th Meeting of the 10th Board of Directors on 19 June 2023 and the 1st Extraordinary General Meeting
of 2023 on 6 July 2023, reviewing and approving the Proposal on Repurchase of the Company’s Domestically Listed Foreign
Shares (B Share). The Company repurchased 46,176,428 B shares in total through call auction via its securities account for
repurchase and completed the formalities for cancellation of the foregoing repurchased shares at the Shenzhen Branch of China
Securities Depository and Clearing Corporation Limited on 1 March 2024.
④On 19 January 2024, the Proposal on Repurchase and Cancel Authorized but Unlocked Restricted Share of the Incentive
Personnel not Conforming to the Incentive Condition was deliberated and approved at the 18th Meeting of the 10th Board of
Directors of the Company, as ten of the incentive personnel of the 2021 restricted share incentive scheme no longer met the
condition of being incentive personnel due to resignation, retirement, or position changes. The restricted shares held by the ten
personnel with a volume of 66,500 shares, which were authorized but not lifted from restricted sales, shall be repurchased and
cancelled by the Company in accordance with the 2021 Restricted Share Incentive Scheme (hereinafter referred to as the
"Incentive Scheme") of the Company and relevant provisions of laws and regulation. The aforesaid matters were deliberated and
approved at the 1st Extraordinary General Meeting in 2024 that was held on 5 February 2024.
Transfer of share ownership:
41
Lu Thai Textile Co., Ltd. Interim Report 2024
Applicable □ Not applicable
The Company completed the formalities for repurchase and cancellation of the 46,176,428 repurchased B-shares and 66,500
shares of equity incentive restricted shares at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited respectively on 1 March 2024 and 22 April 2024.
Progress on any share repurchases:
Applicable □ Not applicable
①The Company first repurchased B shares on 21 August 2023 and disclosed relevant progress during the repurchase period as
required by relevant laws and regulations. As at 21 February 2024, all the repurchased shares had been delivered, and the total
amount of funds used had hit the ceiling on the repurchase fund as stipulated in the repurchase program. The Company
repurchased 46,176,428 B shares in total through call auction via its securities account for repurchase, accounting for
approximately 16.96% of the Company’s B shares and 5.35% of the Company’s total share capital. The highest transaction price
of the repurchase reached HKD4.80 per share, and the lowest reached HKD4.53 per share. The total amount paid was
HKD218,386,229.84 (including the transaction cost), equivalent to RMB199,999,670.86, no more than RMB200 million. The
foregoing repurchased shares were canceled at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited on 1 March 2024.
②66,500 shares of equity incentive restricted shares were repurchased and cancelled completely by the Company on 22 April
2024.
Progress on reducing the repurchased shares by means of centralized bidding:
□Applicable Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary
shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
Applicable □ Not applicable
See relevant contents of "IV Key Financial Information" under "Part II Corporate Information and Key Financial Information".
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□Applicable Not applicable
2. Changes in Restricted Shares
Applicable □ Not applicable
Unit: share
Restricted
Name of Restricted Restricted shares
Restricted shares shares
the Restricted Restricted shares relieved
amount at the shares relieved increased of the amount at
sharehold reasons date
period-begin of the period period the period-
ers
end
Locked
public
100000 shares on 6 May
Zhang shares held
435,225 190,000 190,000 435,225 2024 and 90000 shares on 7
Zhanqi by senior
June 2024
managemen
t
Locked
public
Shang 50000 shares on 6 May
shares held
Chenggan 247,500 110,000 192,500 330,000 2024 and 60000 shares on 7
by senior
g June 2024
managemen
t
Yu 287,325 110,000 110,000 287,325 Locked 50000 shares on 6 May
42
Lu Thai Textile Co., Ltd. Interim Report 2024
Shouzhen public 2024 and 60000 shares on 7
g shares held June 2024
by senior
managemen
t
Locked
public
50000 shares on 6 May
Zhang shares held
283,275 110,000 110,000 283,275 2024 and 60000 shares on 7
Keming by senior
June 2024
managemen
t
Locked
public
78425 shares on 12 January
Wang shares held
313,700 168,425 90,000 235,275 2024 and 90000 shares on 7
Jiabin by senior
June 2024
managemen
t
Locked
public
50000 shares on 6 May
Guo shares held
225,000 110,000 110,000 225,000 2024 and 60000 shares on 7
Heng by senior
June 2024
managemen
t
Locked
public
50000 shares on 6 May
shares held
Li Wenji 195,000 110,000 110,000 195,000 2024 and 60000 shares on 7
by senior
June 2024
managemen
t
Locked
public
50000 shares on 6 May
shares held
Du Lixin 187,500 110,000 110,000 187,500 2024 and 60000 shares on 7
by senior
June 2024
managemen
t
Locked
public
25000 shares on 6 May
Lyu shares held
150,000 70,000 70,000 150,000 2024 and 45000 shares on 7
Wenquan by senior
June 2024
managemen
t
Locked
public
50000 shares on 6 May
shares held
Xu Feng 142,500 95,000 95,000 142,500 2024 and 45000 shares on 7
by senior
June 2024
managemen
t
Locked
public
shares held
2426500 shares on 6 May
Other by senior
2024 and 6271500 shares
restricted managemen
9,000,792 8,698,000 48,275 284,567 on 7 June 2024; while
sharehold t and
66500 shares were
ers Restricted
cancelled on 22 April 2024
shares from
equity
incentive
43
Lu Thai Textile Co., Ltd. Interim Report 2024
Total 11,467,817 9,881,425 1,235,775 2,755,667 -- --
II. Issuance and Listing of Securities
□Applicable Not applicable
III Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of preference shareholders
Total number of ordinary
45,713 with resumed voting rights at the period- 0
shareholders at the period-end
end (if any) (see Note 8)
5% or greater ordinary shareholders or the top 10 ordinary shareholders (exclusive of shares lent in refinancing)
Increase/ Pledged, marked or
Shareh Number
decrease frozen shares
Nature of olding Total shares of Number of
Name of during
sharehold percent held at the restricted non-restricted
shareholder the
er age period-end shares shares held Status Number
Reporting
(%) held
Period
Domestic
Zibo Lucheng
non-state-
Textile
owned 17.17% 140,353,583 0 0 140,353,583 N/A 0
Investment Co.,
legal
Ltd.
person
Foreign
Tailun (Thailand)
legal 14.10% 115,232,400 -3000000 0 115,232,400 N/A 0
Textile Co., Ltd.
person
Central Huijin State-
Assets owned
2.43% 19,884,100 0 0 19,884,100 N/A 0
Management Co., legal
Ltd. person
National Social
Security Fund Other 1.81% 14,760,051 570000 0 14,760,051 N/A 0
Portfolio 413
ICBC Credit
Suisse Innovation
Power Stock Other 1.36% 11,100,000 -810000 0 11,100,000 N/A 0
Type Securities
Investment Fund
Dongfanghong
Zhihua Three-
Year Holding Other 0.90% 7,394,950 943200 0 7,394,950 N/A 0
Mixed Securities
Investment Fund
National Social
Security Fund Other 0.80% 6,537,940 6537940 0 6,537,940 N/A 0
Portfolio 502
Dongfanghong
Jingdong Big
Data Dynamic
Other 0.77% 6,324,582 1324500 0 6,324,582 N/A 0
Asset Allocation
Mixed Securities
Investment Fund
FEDERATED Foreign 0.77% 6,309,111 108928 0 6,309,111 N/A 0
44
Lu Thai Textile Co., Ltd. Interim Report 2024
HERMES legal
GLOBAL person
INVESTMENT
FD (CAYMAN)
MASTER, SPC
OBOAFTAO
FEDERATED
HERMES EMG
ASIA EQUITY
FD MASTER
S.P.
Dongfanghong
Dingyuan 3-
Month Fixed
Term Open Other 0.73% 5,927,800 651400 0 5,927,800 N/A 0
Mixed Initiating
Securities
Investment Fund
Strategic investors or general
corporations becoming top-ten
shareholders due to placing of Naught
new shares (if any) (see Note
3)
Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder of the Company and the
Related or acting-in-concert actual controller. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder as well as
parties among the shareholders sponsor of foreign capital of the Company. All of other shareholders are people holding public A
above share or public B share and the Company is not able to confirm whether there is associated
relationship or concerted action among other shareholders.
Explain if any of the
shareholders above was
involved in entrusting/being Naught
entrusted with voting rights or
waiving voting rights
Special account for share
repurchases (if any) among the
Naught
top 10 shareholders (see note
11)
Shareholdings of the top ten non-restricted ordinary shareholders(exclusive of shares lent in refinancing and executive lock-up
shares)
Type of shares
Name of shareholder Number of non-restricted shares held at the period-end
Type Shares
RMB
Zibo Lucheng Textile
140,353,583 ordinar 140,353,583
Investment Co., Ltd.
y share
Domest
ically
Tailun (Thailand) Textile Co.,
115,232,400 listed 115,232,400
Ltd.
foreign
shares
RMB
Central Huijin Assets
19,884,100 ordinar 19,884,100
Management Co., Ltd.
y share
RMB
National Social Security Fund
14,760,051 ordinar 14,760,051
Portfolio 413
y share
ICBC Credit Suisse Innovation RMB
Power Stock Type Securities 11,100,000 ordinar 11,100,000
Investment Fund y share
Dongfanghong Zhihua Three- 7,394,950 RMB 7,394,950
45
Lu Thai Textile Co., Ltd. Interim Report 2024
Year Holding Mixed Securities ordinar
Investment Fund y share
RMB
National Social Security Fund
6,537,940 ordinar 6,537,940
Portfolio 502
y share
Dongfanghong Jingdong Big
RMB
Data Dynamic Asset
6,324,582 ordinar 6,324,582
Allocation Mixed Securities
y share
Investment Fund
FEDERATED HERMES
Domest
GLOBAL INVESTMENT FD
ically
(CAYMAN) MASTER, SPC
6,309,111 listed 6,309,111
OBOAFTAO FEDERATED
foreign
HERMES EMG ASIA
shares
EQUITY FD MASTER S.P.
Dongfanghong Dingyuan 3-
RMB
Month Fixed Term Open
5,927,800 ordinar 5,927,800
Mixed Initiating Securities
y share
Investment Fund
Explanation on connected
relationship among the top ten
shareholders of tradable share
not subject to trading Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder and the actual controller of
moratorium, as well as among the Company. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder and the foreign
the top ten shareholders of sponsor of the Company. All the other shareholders are holding tradable A-shares or B-shares.
tradable share not subject to And it is unknown whether there is any related party or acting-in-concert party among them.
trading moratorium and top ten
shareholders, or explanation on
acting-in-concert
Particular about shareholder
participate in the securities
Naught
lending and borrowing
business (if any) (note 4)
5% or greater shareholders, top 10 shareholders and Top 10 unrestricted shareholders involved in refinancing shares lending
□Applicable Not applicable
Changes in top 10 shareholders and top 10 unrestricted shareholders due to refinancing shares lending/return compared with the
prior period
□Applicable Not applicable
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.
IV Change in Shareholdings of Directors, Supervisors and Senior Management
Applicable □ Not applicable
Number Number
Decrea of of
Number of
Increas se in restricted granted
Incu granted
Beginning e in the the Ending shares restricted
mbe restricted
Name Office title shareholdin Current Curren shareholdin granted in shares at
nt/fo shares at the
g (share) Period t g (share) the the
rmer period-begin
(share) Period Current period-
(share)
(share) Period end
(share) (share)
46
Lu Thai Textile Co., Ltd. Interim Report 2024
Incu
Liu Chairman and
mbe 148,290 148,290
Zibin President nt
Incu
Xu
Vice Chairman mbe
Zhinan nt
Incu
Xu
Director mbe
Jianlyu nt
Zheng Incu
Huishe Director mbe
ng nt
Director, Vice
Liu Incu
Controller of Global
Demin mbe
Marketing nt
g
Department
Director, Vice
Incu
Zhang president, Controller
mbe 580,300 580,300 190,000 0
Zhanqi of Global Marketing nt
Department
Director, Chief
Accountant,
Zhang Incu
Controller of
Kemin mbe 377,700 377,700 110,000 0
Financial nt
g
Management
Department
Director, Chief
Engineer, Executive
Incu
Du Dean of Lu Thai
mbe 250,000 250,000 110,000 0
Lixin Engineering nt
Technology
Research Institute
Incu
Zhou Independent
mbe
Zhiji Director nt
Qu Incu
Independent
Dongm mbe
Director nt
ei
Incu
Peng Independent
mbe
Yanli Director
nt
Incu
Quan Independent
mbe
Yuhua Director
nt
Chairman of the
Supervisory
Shang Incu
Committee,
Chengg mbe 330,000 330,000 110,000 0
President Assistant,
ang nt
Head of Garment
Product Line
Incu
Liu
Supervisor mbe 10,000 10,000
Zilong nt
Supervisor,
Manager of Incu
Dong
Logistics mbe 5,000 5,000
Shibing nt
Management
Department
Incu
Yu President Assistant, 383,100 383,100 110,000 0
mbe
47
Lu Thai Textile Co., Ltd. Interim Report 2024
Shouzh Controller of Energy nt
eng and Environment
Protection
Department
Dean of Lu Thai
Incu
Li Engineering
mbe 260,000 260,000 110,000 0
Wenji Technology nt
Research Institute
Controller of Incu
Guo
Functional Fabric mbe 300,000 300,000 110,000 0
Heng nt
Product Line
Vice Controller of
Yarn Dyed Fabric
Lyu Product Line, Incu
Wenqu Manager of Yarn mbe 200,000 200,000 70,000 0
an Dyed Production nt
Management
Department
Vice Controller of Incu
Xu
Yarn Dyed Fabric mbe 190,000 190,000 95,000 0
Feng nt
Product Line
Incu
Zheng
Board Secretary mbe 40,000 40,000 40,000 0
Weiyin nt
Zhang Chairman of the
For
Shouga Supervisory 73,100 73,100
mer
ng Committee
Total -- -- 3,147,490 0 0 3,147,490 1,055,000 0 0
V Change of the Controlling Shareholder or the De Facto Controller
Change of the controlling shareholder in the Reporting Period
□Applicable Not applicable
No such cases in the Reporting Period.
Change of the de facto controller in the Reporting Period
□Applicable Not applicable
No such cases in the Reporting Period.
48
Lu Thai Textile Co., Ltd. Interim Report 2024
Part VIII Preference Shares
□Applicable Not applicable
No preference shares in the Reporting Period.
49
Lu Thai Textile Co., Ltd. Interim Report 2024
Part IX Bonds
Applicable □ Not applicable
I Enterprise Bonds
□Applicable Not applicable
No enterprise bonds in the Reporting Period.
II Corporate Bonds
□Applicable Not applicable
No corporate bonds in the Reporting Period.
III Debt Financing Instruments of Non-financial Enterprises
□Applicable Not applicable
No such cases in the Reporting Period.
IV Convertible Corporate Bonds
Applicable □ Not applicable
1. Previous Adjustments and Correction of Conversion Price
On 9 April 2020, the Company publicly issued 14 million A-share convertible corporate bonds (short name: Lu
Thai Convertible Bonds, bond code: 127016) on Shenzhen Stock Exchange with an issue price of RMB100 per
share and a share conversion price of RMB9.01 per share. The bonds were listed on Shenzhen Stock Exchange on
13 May 2020. In accordance with related terms of the “Prospectus for the Public Offering of A-Share Convertible
Corporate Bonds of Lu Thai Textile Co., Ltd.”, as well as the regulations of China Securities Regulatory
Commission on the public offering of convertible corporate bonds, if the Company has any distribution of share
dividends, conversion into share capital, additional issue of new shares (excluding share capital increase due to
conversion into shares from the convertible corporate bonds issued this time), share allotment and distribution of
cash dividends after the issue of “Lu Thai Convertible Bonds”, adjustment shall be made to the share conversion
price.
On 21 May 2020, the Company held the Annual General Meeting of 2019, where the “Proposal on the Company’s
Profit Distribution Plan for 2019” was considered and approved. According to the Proposal, a cash amount of
RMB 1.00 (inclusive of tax) would be distributed to every 10 shares, with the 858,121,541 shares of share capital
on 31 December 2019 as the base. The share registration date for the Company’s equity distribution of 2019 was 8
July 2020 and the ex-rights and ex-dividend date was 9 July 2020. Therefore, the share conversion price of “Lu
Thai Convertible Bonds” was adjusted from RMB9.01 per share to RMB8.91 per share, and the new price after
the adjustment took effect on and as of 9 July 2020 (the ex-rights and ex-dividend date).
50
Lu Thai Textile Co., Ltd. Interim Report 2024
On 3 June 2021, the Company completed the registration of first-granted restricted stocks of restricted share
incentive scheme at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited
(China Clear). 7 June 2021 is designated as the listing date of first-granted restricted stocks of the Company in
2021. The Company grants 750 subjects of incentive 24,285,000 restricted shares at a price of RMB3.31 per share,
accounting for 2.83% of total share capital of the Company. The source of the stock is RMB A-share ordinary
shares issued by the Company to subjects of incentive. Therefore, the conversion price of Lu Thai Convertible
Bond will be adjusted from RMB8.91 per share to RMB8.76 per share, with the adjusted conversion price coming
into force from 7 June 2021.
The 2020 annual general meeting convened on 20 April 2021 deliberated on and adopted the Company's
Proposal on Profit Appropriation Plan in 2020, which distributes cash of RMB0.50 per 10 shares (including tax)
with total share capital at the record date of this distribution scheme as base. The record date of the Company's
interest distribution in 2020 is set on 17 June 2021. The ex-date is set on 18 June 2021. Therefore, the
conversion price of Lu Thai Convertible Bond will be adjusted from RMB8.76 per share to RMB8.71 per share,
with the adjusted conversion price coming into force from 18 June 2021 (the ex-date).
On 22 March 2022, the Company completed the registration of granting reserved shares under the 2021 restricted
share incentive scheme at the Shenzhen Branch of China Clear. 22 March 2022 was designated as the listing date
for granting reserved restricted shares of the Company. The Company granted 343 incentive personnel 5,838,000
restricted shares at a price of RMB3.56 per share, accounting for 0.66% of total share capital of the Company. The
source of the stock is RMB A-share ordinary shares issued by the Company to incentive personnel. Therefore, the
conversion price of Lu Thai convertible bond will be adjusted from RMB8.71 per share to RMB8.68 per share,
with the adjusted conversion price coming into force from 22 March 2022.
The 2021 annual general meeting convened on 20 May 2022 deliberated and adopted the Company's Proposal on
Profit Appropriation Plan in 2021, which distributes cash of RMB0.70 per ten shares (including tax) with total
share capital at the record date of this distribution scheme as base. The record date of the Company's interest
distribution in 2021 was set on 22 June 2022. The ex-date was set on 23 June 2022. Therefore, the conversion
price of Lu Thai convertible bond will be adjusted from RMB8.68 per share to RMB8.61 per share, with the
adjusted conversion price coming into force from 23 June 2022.
The Company completed the formalities for cancellation of the 23,935,748 repurchased B shares at the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited on 25 May 2023. In accordance with the
issuance clauses in the Company’s Prospectus and relevant regulations of the China Securities Regulatory
Commission (CSRC) on the issuance of convertible bonds, the conversion price of Lu Thai convertible bond shall
be adjusted from RMB8.61 per share to RMB8.73 per share. The adjusted conversion price came into force on 26
May 2023.
The Company implemented the 2022 Equity Distribution Plan on 16 June 2023. In accordance with the issuance
clauses in the Company’s Prospectus and relevant regulations of the CSRC on the issuance of convertible bonds,
the conversion price of Lu Thai convertible bond shall be adjusted from RMB8.73 per share to RMB8.63 per
share. The adjusted conversion price came into force on 16 June 2023.
The Company completed the formalities for cancellation of the 46,176,428 repurchased B shares at the Shenzhen
Branch of China Securities Depository and Clearing Corporation Limited on 1 March 2024. In accordance with
51
Lu Thai Textile Co., Ltd. Interim Report 2024
the issuance clauses in the Company’s Prospectus and relevant regulations of the China Securities Regulatory
Commission (CSRC) on the issuance of convertible bonds, the conversion price of Lu Thai convertible bond shall
be adjusted from RMB8.63 per share to RMB8.87 per share. The adjusted conversion price came into force on 4
March 2024.
The Company implemented the 2023 Equity Distribution Plan on 19 June 2024. In accordance with the issuance
clauses in the Company’s Prospectus and relevant regulations of the CSRC on the issuance of convertible bonds,
the conversion price of Lu Thai convertible bond shall be adjusted from RMB8.87 per share to RMB8.74 per
share. The adjusted conversion price came into force on 19 June 2024.
2. Accumulative Conversion
Applicable □ Not applicable
Converted
shares as %
Unconv
Accumu of total
Accumulativ erted
Abbr Total lative shares issued Unconverted
e amount amount
eviati Start date circulation Total amount (RMB) shares by the amount (RMB)
converted as % of
on (piece) converte Company
(RMB) total
d (share) before the
amount
start date of
conversion
Lu
Thai
Conv
From 15 October
ertibl 14,000,000 1,400,000,000.00 152,300.00 17,031 0.00% 1,399,847,700.00 99.99%
2020 to 8 April 2026
e
Bond
s
3. Top 10 Convertible Bond Holders
As % of
Number of convertible Amount of convertible
Nature of convertible
No. Name of holders bonds held at the bonds held at the
holders bonds held at the
period-end (share) period-end (RMB)
period-end
China Construction Bank - E Fund
1 Enhanced Income Bond Securities Other 694,212 69,421,200.00 4.96%
Investment Fund
Fuguo Fumin Fixed Income
2 Pension Product - China Other 640,009 64,000,900.00 4.57%
Construction Bank Corporation
Bank of China Co., Ltd.-GF Juxin
3 Bond-Type Securities Investment Other 526,285 52,628,500.00 3.76%
Fund
Shanghai Pudong Development
Bank Co., Ltd. - E Fund Yuxiang
4 Other 485,552 48,555,200.00 3.47%
Return Bond Securities Investment
Bond
China Merchants Bank Co., Ltd. -
5 Dongfanghong Juli Bond Securities Other 327,356 32,735,600.00 2.34%
Investment Fund
Agricultural Bank of China Co.,
6 Ltd.-Penghua Convertible Bonds Other 312,470 31,247,000.00 2.23%
Bond Securities Investment Bond
52
Lu Thai Textile Co., Ltd. Interim Report 2024
TruValue Asset Management-
China Merchants Bank-TruValue
7 Other 266,898 26,689,800.00 1.91%
Asset Management Zhaoyi No. 3
Collective Asset Management Plan
Ping An Fund-
Ping An Life Insurance Company o
f China, Ltd.-Dividend-Individual
8 Insurance Dividend-Ping An Life - Other 264,697 26,469,700.00 1.89%
Ping An Fund Fixed Income
Entrusted Investment No. 1-Asset
Management Plan
Huatai Yousheng Convertible
Bond Fixed Income Pension
9 Other 246,800 24,680,000.00 1.76%
Product－China Merchants Bank
Co., Ltd.
CPIC-Dividend-Individual
10 Other 241,283 24,128,300.00 1.72%
Dividend
4. Significant Changes in Profitability, Assets Condition and Credit Status of Guarantors
□Applicable Not applicable
5. The Company’s Liabilities, Credit Changes at the Period-end and Cash Arrangements to Repay Debts
in Future Years
For the relevant indicators, please refer to the Part IX Bonds- VI The Major Accounting Data and the Financial Indicators of the
Recent 2 Years of the Company up the Period-end.
The credit rating of the Company's convertible bonds for the reporting period is AA+, which has not changed compared with that
of the same period of last year.
V Losses of Scope of Consolidated Financial Statements during the Reporting Period
Exceeding 10% of Net Assets up the Period-end of Last Year
□Applicable Not applicable
VI The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the
Company up the Period-end
Unit: RMB’0,000
Item 30 June 2024 31 December 2023 Increase/decrease
Current ratio 3.93 3.43 14.58%
Debt/asset ratio 29.58% 28.39% 1.19%
Quick ratio 2.43 2.12 14.62%
H1 2024 H1 2023 YoY increase/decrease
Net profit before exceptional
26,373.13 19,180.99 37.50%
gains and losses
EBITDA/debt ratio 17.30% 20.29% -2.99%
Interest cover (times) 4.76 5.49 -13.30%
Cash-to-interest cover (times) 9.47 2.95 221.02%
53
Lu Thai Textile Co., Ltd. Interim Report 2024
EBITDA-to-interest cover
9.85 10.90 -9.63%
(times)
Loan repayment ratio 100.00% 100.00%
Interest payment ratio 100.00% 100.00%
54
Lu Thai Textile Co., Ltd. Interim Report 2024
Part X Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□Yes No
They are unaudited by such an auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Lu Thai Textile Co., Ltd.
30 June 2024
Unit: RMB
Item 30 June 2024 1 January 2024
Current assets:
Monetary assets 1,670,720,493.53 1,558,252,048.03
Held-for-trading financial assets 741,610,807.34 723,800,275.39
Notes receivable 76,158,996.20 99,642,708.67
Accounts receivable 725,190,840.90 826,467,684.78
Accounts receivable financing 6,922,213.41 18,248,205.76
Prepayments 88,309,101.31 51,863,447.56
Other receivables 24,299,740.14 22,168,807.43
Including: Interest receivable
Dividends receivable
Inventories 2,142,506,737.15 2,124,139,574.70
Other current assets 144,860,987.32 145,112,114.03
Total current assets 5,620,579,917.30 5,569,694,866.35
Non-current assets:
Long-term receivables
Long-term equity investment 152,156,574.30 143,537,479.77
Other equity instrument investment
Other non-current financial assets 88,750,000.00 88,750,000.00
Investment property 19,126,854.90 19,578,175.93
Fixed assets 5,921,271,772.02 5,597,692,505.07
Construction in progress 450,403,383.41 868,496,878.41
Right-of-use assets 474,061,007.77 463,226,419.21
55
Lu Thai Textile Co., Ltd. Interim Report 2024
Intangible assets 337,998,823.87 343,347,879.42
Goodwill 20,563,803.29 20,563,803.29
Long-term deferred expenses 4,443,686.50 1,815,838.60
Deferred income tax assets 157,913,267.50 157,892,110.06
Other non-current assets 518,241,842.87 155,690,266.83
Total non-current assets 8,144,931,016.43 7,860,591,356.59
Total assets 13,765,510,933.73 13,430,286,222.94
Current liabilities:
Short-term borrowings 598,629,270.46 580,704,772.27
Held-for-trading financial liabilities 80,716,835.26 46,785,831.47
Derivative financial liabilities
Notes payable
Accounts payable 221,724,967.80 275,502,915.05
Advances from customers
Contract liabilities 165,982,780.07 188,073,335.89
Payroll payable 234,219,345.20 284,344,973.72
Taxes payable 30,381,726.69 42,633,232.55
Other payables 18,715,402.34 47,549,373.52
Including: Interest payable
Dividends payable 441,113.64 441,113.64
Current portion of non-current
23,319,201.45 96,207,192.49
liabilities
Other current liabilities 57,471,030.54 63,646,908.11
Total current liabilities 1,431,160,559.81 1,625,448,535.07
Non-current liabilities:
Long-term borrowings 706,355,559.41 259,992,974.40
Bonds payable 1,482,171,331.99 1,476,572,070.79
Lease liabilities 99,631,923.14 86,580,224.41
Long-term payables
Long-term payroll payable 57,276,675.61 57,276,675.61
Provisions
Deferred income 148,386,995.71 151,768,947.92
Deferred income tax liabilities 146,711,645.69 155,178,797.04
Other non-current liabilities
Total non-current liabilities 2,640,534,131.55 2,187,369,690.17
Total liabilities 4,071,694,691.36 3,812,818,225.24
Owners’ equity:
Share capital 817,364,896.00 863,607,634.00
56
Lu Thai Textile Co., Ltd. Interim Report 2024
Other equity instruments 71,383,591.09 71,383,677.78
Including: Preferred shares
Perpetual bonds
Capital reserves 184,401,293.30 334,792,614.76
Less: Treasury stock 186,060.00 193,438,720.78
Other comprehensive income 140,719,631.20 131,343,141.63
Specific reserve 2,567,760.32
Surplus reserves 1,260,661,015.34 1,260,661,015.34
General reserve
Retained earnings 6,825,767,746.13 6,762,457,543.07
Total equity attributable to owners of the
9,302,679,873.38 9,230,806,905.80
Company as the parent
Non-controlling interests 391,136,368.99 386,661,091.90
Total owners’ equity 9,693,816,242.37 9,617,467,997.70
Total liabilities and owners’ equity 13,765,510,933.73 13,430,286,222.94
Legal representative: Liu Zibin Chief Accountant: Zhang Keming Financial Manager: Zhang Keming
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2024 1 January 2024
Current assets:
Monetary assets 1,035,981,981.57 932,232,103.80
Held-for-trading financial assets 472,701,594.27 446,874,251.41
Derivative financial assets
Notes receivable 44,283,816.54 54,622,178.42
Accounts receivable 283,809,495.22 356,483,425.59
Accounts receivable financing 5,289,974.58 11,214,873.48
Prepayments 59,005,416.11 21,426,761.45
Other receivables 1,886,991,725.68 2,064,459,414.54
Including: Interest receivable
Dividends receivable
Inventories 952,786,915.28 955,634,154.13
Including: Data resources
Contract assets
Available-for-sale assets
Current portion of non-current assets
Other current assets 7,315,243.72 2,443,246.51
Total current assets 4,748,166,162.97 4,845,390,409.33
57
Lu Thai Textile Co., Ltd. Interim Report 2024
Non-current assets:
Investment on debt obligations
Investment on other debt obligations
Long-term receivables
Long-term equity investments 3,588,116,900.80 3,579,497,806.27
Investments in other equity
instruments
Other non-current financial assets 76,750,000.00 76,750,000.00
Investment property 62,990,492.40 64,745,052.00
Fixed assets 1,960,953,873.80 2,048,332,131.98
Construction in progress 8,210,097.62 3,320,771.05
Right-of-use assets 101,770,445.49 90,043,845.90
Intangible assets 194,564,640.89 197,852,690.71
Including: Data resources
Development costs
Including: Data resources
Goodwill
Long-term deferred expenses 471,697.33 689,403.73
Deferred income tax assets 78,576,889.45 80,728,077.79
Other non-current assets 495,059,935.69 153,767,959.47
Total non-current assets 6,567,464,973.47 6,295,727,738.90
Total assets 11,315,631,136.44 11,141,118,148.23
Current liabilities:
Short-term borrowings 3,215,018.43 3,180,000.00
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 93,633,814.85 108,266,517.50
Advances from customers
Contract liabilities 106,810,242.63 106,140,758.76
Payroll payable 155,389,864.88 188,784,236.01
Taxes payable 16,759,691.55 23,490,180.58
Other payables 14,399,709.94 133,819,575.89
Including: Interest payable
Dividends payable 441,113.64 441,113.64
Liabilities held for sale
Current portion of non-current
23,277,160.10 95,832,728.97
liabilities
58
Lu Thai Textile Co., Ltd. Interim Report 2024
Other current liabilities 43,691,327.71 44,293,993.88
Total current liabilities 457,176,830.09 703,807,991.59
Non-current liabilities:
Long-term borrowings 706,355,559.41 259,992,974.40
Bonds payable 1,482,171,331.99 1,476,572,070.79
Lease liabilities 102,196,701.55 89,388,836.15
Long-term payables
Long-term payroll payable 57,276,675.61 57,276,675.61
Provisions
Deferred income 111,948,953.74 114,149,056.16
Deferred income tax liabilities 112,306,913.16 120,804,925.25
Other non-current liabilities
Total non-current liabilities 2,572,256,135.46 2,118,184,538.36
Total liabilities 3,029,432,965.55 2,821,992,529.95
Owners’ equity:
Share capital 817,364,896.00 863,607,634.00
Other equity instruments 71,383,591.09 71,383,677.78
Including: Preferred shares
Perpetual bonds
Capital reserves 245,781,327.54 396,172,649.00
Less: Treasury stock 186,060.00 193,438,720.78
Other comprehensive income -30,349.56 -41,439.79
Specific reserve
Surplus reserves 1,257,552,275.70 1,257,552,275.70
Retained earnings 5,894,332,490.12 5,923,889,542.37
Total owners’ equity 8,286,198,170.89 8,319,125,618.28
Total liabilities and owners’ equity 11,315,631,136.44 11,141,118,148.23
3. Consolidated Income Statement
Unit: RMB
Item H1 2024 H1 2023
1. Revenue 2,830,488,685.61 2,840,491,262.47
Including: Operating revenue 2,830,488,685.61 2,840,491,262.47
2. Costs and expenses 2,502,834,949.04 2,584,294,892.42
Including: Cost of sales 2,131,993,492.13 2,233,932,367.67
Taxes and surcharges 29,125,385.82 34,360,360.36
Selling expense 63,286,721.28 66,411,247.30
Administrative expense 158,805,160.69 175,308,361.39
59
Lu Thai Textile Co., Ltd. Interim Report 2024
Development cost 115,374,597.19 131,290,032.04
Finance costs 4,249,591.93 -57,007,476.34
Including: Interest expense 48,731,472.34 39,502,439.47
Interest income 24,797,577.48 30,385,764.21
Add: Other income 14,929,113.83 27,724,922.40
Return on investment (“-” for loss) -3,289,446.38 46,798,662.00
Including: Share of profit or loss of joint ventures and associates 8,619,094.53 -1,333,148.86
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) -112,539,827.27 -42,471,705.81
Credit impairment loss (“-” for loss) 587,454.42 16,809,724.05
Asset impairment loss (“-” for loss) -34,719,445.19 -75,665,553.95
Asset disposal income (“-” for loss) -232,868.16 -404,759.16
3. Operating profit (“-” for loss) 192,388,717.82 228,987,659.58
Add: Non-operating income 2,878,019.80 4,231,250.89
Less: Non-operating expense 2,366,685.20 2,464,360.53
4. Profit before tax (“-” for loss) 192,900,052.42 230,754,549.94
Less: Income tax expense 18,864,805.79 20,991,415.51
5. Net profit (“-” for net loss) 174,035,246.63 209,763,134.43
5.1 By operating continuity
5.1.1 Net profit from continuing operations (“-” for net loss) 174,035,246.63 209,763,134.43
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 as
169,559,969.54 221,647,998.15
the parent (“-” for net loss)
5.2.1 Net profit attributable to non-controlling interests (“-” for
4,475,277.09 -11,884,863.72
net loss)
6. Other comprehensive income, net of tax 9,376,489.57 70,872,279.88
Attributable to owners of the Company as the parent 9,376,489.57 70,872,279.88
6.1 Items that will not be reclassified to profit or loss
6.1.1 Changes caused by re-measurements 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 equity
instruments
60
Lu Thai Textile Co., Ltd. Interim Report 2024
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 9,376,489.57 70,872,279.88
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
9,340,942.61 70,961,260.92
currency-denominated financial statements
6.2.7 Other 35,546.96 -88,981.04
Attributable to non-controlling interests
7. Total comprehensive income 183,411,736.20 280,635,414.31
Attributable to owners of the Company as the parent 178,936,459.11 292,520,278.03
Attributable to non-controlling interests 4,475,277.09 -11,884,863.72
8. Earnings per share
8.1 Basic earnings per share 0.21 0.26
8.2 Diluted earnings per share 0.19 0.23
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 Chief Accountant: Zhang Keming Financial Manager: Zhang Keming
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2024 H1 2023
1. Operating revenue 1,468,386,291.35 1,609,909,822.43
Less: Cost of sales 1,111,556,899.05 1,277,031,824.62
Taxes and surcharges 18,109,295.49 21,096,525.14
Selling expense 41,139,342.57 43,132,295.18
Administrative expense 96,570,932.90 109,290,133.53
R&D expense 79,830,730.20 89,977,015.81
Finance costs -3,675,230.34 -76,975,133.92
Including: Interest expense 27,601,294.75 17,569,729.67
61
Lu Thai Textile Co., Ltd. Interim Report 2024
Interest income 19,298,232.20 22,004,783.28
Add: Other income 11,824,461.76 8,593,238.09
Return on investment (“-” for loss) 14,834,483.02 219,763,969.54
Including: Share of profit or loss of joint ventures and associates 8,619,094.53 -1,333,148.86
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) -73,211,657.14 -45,480,664.13
Credit impairment loss (“-” for loss) 2,881,097.53 6,259,781.13
Asset impairment loss (“-” for loss) -2,519,219.13 -19,582,479.49
Asset disposal income (“-” for loss) 1,256,454.63 -295,512.79
2. Operating profit (“-” for loss) 79,919,942.15 315,615,494.42
Add: Non-operating income 2,179,686.89 2,814,084.00
Less: Non-operating expense 56,573.70 792,483.54
3. Profit before tax (“-” for loss) 82,043,055.34 317,637,094.88
Less: Income tax expense 5,350,341.11 8,203,834.07
4. Net profit (“-” for net loss) 76,692,714.23 309,433,260.81
4.1 Net profit from continuing operations (“-” for net loss) 76,692,714.23 309,433,260.81
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax 11,090.23 -77,408.91
5.1 Items that will not be reclassified to profit or loss
5.1.1 Changes caused by re-measurements 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
5.2 Items that will be reclassified to profit or loss 11,090.23 -77,408.91
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
62
Lu Thai Textile Co., Ltd. Interim Report 2024
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 11,090.23 -77,408.91
6. Total comprehensive income 76,703,804.46 309,355,851.90
7. Earnings per share
7.1 Basic earnings per share 0.09 0.36
7.2 Diluted earnings per share 0.10 0.32
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2024 H1 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 2,870,197,776.21 2,809,154,113.13
Tax rebates 34,473,335.94 75,305,681.28
Cash generated from other operating activities 15,241,585.40 68,114,428.99
Subtotal of cash generated from operating activities 2,919,912,697.55 2,952,574,223.40
Payments for commodities and services 1,495,937,361.55 1,823,197,285.44
Cash paid to and for employees 815,258,158.98 849,321,563.91
Taxes paid 84,393,030.40 64,065,437.19
Cash used in other operating activities 72,902,493.93 67,379,719.88
Subtotal of cash used in operating activities 2,468,491,044.86 2,803,964,006.42
Net cash generated from/used in operating activities 451,421,652.69 148,610,216.98
2. Cash flows from investing activities:
Proceeds from disinvestment 366,961,000.00 1,525,821,962.14
Return on investment 1,477,671.32 22,361,582.82
Net proceeds from the disposal of fixed assets, intangible assets
5,007,425.81 1,794,347.29
and other long-lived assets
Net proceeds from the disposal of subsidiaries and other
business units
Cash generated from other investing activities 55,092,528.36 61,197,806.89
Subtotal of cash generated from investing activities 428,538,625.49 1,611,175,699.14
Payments for the acquisition of fixed assets, intangible assets and
133,899,391.95 352,801,937.92
other long-lived assets
Payments for investments 466,000,000.00 2,006,213,736.27
Cash used in other investing activities 187,380,600.00 3,894,036.91
Subtotal of cash used in investing activities 787,279,991.95 2,362,909,711.10
63
Lu Thai Textile Co., Ltd. Interim Report 2024
Net cash generated from/used in investing activities -358,741,366.46 -751,734,011.96
3. Cash flows from financing activities:
Capital contributions received 1,312,631,494.80 590,526,602.96
Including: Capital contributions by non-controlling interests to
subsidiaries
Borrowings raised 1,312,631,494.80 590,526,602.96
Cash generated from other financing activities 919,859,118.54 416,309,860.45
Subtotal of cash generated from financing activities 149,684,828.86 113,125,135.43
Repayment of borrowings
Interest and dividends paid 47,144,251.24 9,505,516.17
Including: Dividends paid by subsidiaries to non-controlling
1,116,688,198.64 538,940,512.05
interests
Cash used in other financing activities 195,943,296.16 51,586,090.91
Subtotal of cash used in financing activities 8,936,611.65 18,508,217.96
Net cash generated from/used in financing activities 297,560,194.04 -533,029,486.11
4. Effect of foreign exchange rates changes on cash and cash
1,353,615,305.93 1,822,897,270.16
equivalents
5. Net increase in cash and cash equivalents 1,651,175,499.97 1,289,867,784.05
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2024 H1 2023
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of services 1,488,240,200.81 1,621,793,418.78
Tax rebates 6,378,709.40 35,559,906.66
Cash generated from other operating activities 19,682,005.66 56,719,401.33
Subtotal of cash generated from operating activities 1,514,300,915.87 1,714,072,726.77
Payments for commodities and services 832,282,435.46 1,259,042,871.11
Cash paid to and for employees 404,265,209.55 459,317,676.05
Taxes paid 42,371,401.25 24,388,725.60
Cash used in other operating activities 41,833,676.11 33,086,342.08
Subtotal of cash used in operating activities 1,320,752,722.37 1,775,835,614.84
Net cash generated from/used in operating activities 193,548,193.50 -61,762,888.07
2. Cash flows from investing activities:
Proceeds from disinvestment 320,961,000.00 1,395,821,962.14
Return on investment 5,054,535.92 21,094,108.64
Net proceeds from the disposal of fixed assets, intangible assets
798,733.70 2,637,307.50
and other long-lived assets
64
Lu Thai Textile Co., Ltd. Interim Report 2024
Net proceeds from the disposal of subsidiaries and other
431,493,365.00
business units
Cash generated from other investing activities 1,388,052,365.00 1,200,787,279.07
Subtotal of cash generated from investing activities 1,714,866,634.62 3,051,834,022.35
Payments for the acquisition of fixed assets, intangible assets and
14,125,317.07 32,526,882.27
other long-lived assets
Payments for investments 420,000,000.00 2,318,818,000.00
Net payments for the acquisition of subsidiaries and other
business units
Cash used in other investing activities 1,316,340,560.00 1,238,001,959.48
Subtotal of cash used in investing activities 1,750,465,877.07 3,589,346,841.75
Net cash generated from/used in investing activities -35,599,242.45 -537,512,819.40
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised 763,875,061.70 188,065,597.90
Cash generated from other financing activities 92,001,000.00
Subtotal of cash generated from financing activities 855,876,061.70 188,065,597.90
Repayment of borrowings 387,245,597.90 13,868,839.85
Interest and dividends paid 137,445,683.64 110,643,219.41
Cash used in other financing activities 229,318,998.82 92,590,001.16
Subtotal of cash used in financing activities 754,010,280.36 217,102,060.42
Net cash generated from/used in financing activities 101,865,781.34 -29,036,462.52
4. Effect of foreign exchange rates changes on cash and cash
1,982,612.10 8,061,427.42
equivalents
5. Net increase in cash and cash equivalents 261,797,344.49 -620,250,742.57
Add: Cash and cash equivalents, beginning of the period 765,705,926.26 1,283,846,116.80
6. Cash and cash equivalents, end of the period 1,027,503,270.75 663,595,374.23
7. Consolidated Statements of Changes in Owners’ Equity
65
Lu Thai Textile Co., Ltd. Interim Report 2024
H1 2024
Unit: RMB
H1 2024
Equity attributable to owners of the Company as the parent
Other equity
instruments G
P P e
r e n
e r e
f p r
O Non-
Item e e a Total owners’
Less: Other t controlling
Share rr t Capital Specific Surplus l Retained equity
Treasury comprehens h Subtotal interests
capital e u reserves reserve reserves r earnings
Other stock ive income e
d a e
r
s l s
h b e
a o r
r n v
e d e
s s
1. Balances
as at the end 863,607, 71,383,677 334,792,61 193,438,72 131,343,14 1,260,661,01 6,762,457,54 9,230,806,90 386,661,09 9,617,467,997.
of the prior 634.00 .78 4.76 0.78 1.63 5.34 3.07 5.80 1.90 70
year
Add:
Adjustment
s for
changed
accounting
policies
Adjustment
s for
corrections
of previous
errors
Other
adjustments
2. Balances
as at the 863,607, 71,383,677 334,792,61 193,438,72 131,343,14 1,260,661,01 6,762,457,54 9,230,806,90 386,661,09 9,617,467,997.
beginning 634.00 .78 4.76 0.78 1.63 5.34 3.07 5.80 1.90 70
of the year
66
Lu Thai Textile Co., Ltd. Interim Report 2024
3. Increase/
decrease in - - -
9,376,489.5 2,567,760 63,310,203.0 71,872,967.5 4,475,277.0
the period 46,242,7 -86.69 150,391,32 193,252,66 76,348,244.67
(“-” for 7 .32 6 8 9
38.00 1.46 0.78
decrease)
3.1 Total
9,376,489.5 169,559,969. 178,936,459. 4,475,277.0
comprehens 183,411,736.20
ive income 7 54 11 9
3.2 Capital - - -
increased
46,242,7 -86.69 150,391,32 193,252,66 -3,381,485.37 -3,381,485.37
and reduced
by owners 38.00 1.46 0.78
3.2.1
Ordinary - - -
shares -
46,242,7 153,711,87 199,954,616.
increased by 199,954,616.22
shareholder 38.00 8.22 22
s
3.2.2
Capital
increased by
holders of
other equity
instruments
3.2.3 Share-
based
payments 3,320,515.9
3,320,515.96 3,320,515.96
included in 6
owners’
equity
-
193,252,614.
3.2.4 Other -86.69 40.80 193,252,66 193,252,614.89
89
0.78
- -
3.3 Profit -
106,249,766. 106,249,766.
distribution 106,249,766.48
48 48
3.3.1
Appropriati
on to
surplus
reserves
3.3.2
Appropriati
on to
67
Lu Thai Textile Co., Ltd. Interim Report 2024
general
reserve
3.3.3
Appropriati - -
on to -
106,249,766. 106,249,766.
owners (or 106,249,766.48
shareholder 48 48
s)
3.3.4
Other
3.4
Transfers
within
owners’
equity
3.4.1
Increase in
capital (or
share
capital)
from capital
reserves
3.4.2
Increase in
capital (or
share
capital)
from
surplus
reserves
3.4.3
Loss offset
by surplus
reserves
3.4.4
Changes in
defined
benefit
pension
schemes
transferred
to retained
earnings
3.4.5
Other
68
Lu Thai Textile Co., Ltd. Interim Report 2024
comprehens
ive income
transferred
to retained
earnings
3.4.6
Other
3.5 Specific 2,567,760
2,567,760.32 2,567,760.32
reserve .32
3.5.1
4,090,000
Increase in 4,090,000.00 4,090,000.00
the period .00
3.5.2
1,522,239
Used in the 1,522,239.68 1,522,239.68
period .68
3.6 Other
4. Balances
as at the end 817,364, 71,383,591 184,401,29 140,719,63 2,567,760 1,260,661,01 6,825,767,74 9,302,679,87 391,136,36 9,693,816,242.
186,060.00
of the 896.00 .09 3.30 1.20 .32 5.34 6.13 3.38 8.99 37
period
H1 2023
Unit: RMB
H1 2023
Equity attributable to owners of the Company as the parent
Other equity
instruments
G
P
e
r P
n
e e
e
f r
r O Non- Total
Item e p
Less: Other al t controlling owners’
Share rr et Capital Specific Surplus Retained
Treasury comprehensi r h Subtotal interests equity
capital e u reserves reserve reserves earnings
Other stock ve income e e
d al
s r
s b
e
h o
r
a n
v
r d
e
e s
s
1.
887,633,151 71,383,830. 395,872,135 154,396,198 107,628,898 1,215,124,336 6,490,910,719 9,014,156,872 393,749,387 9,407,906,2
Balanc
.00 75 .71 .73 .09 .54 .35 .71 .23 59.94
es as at
69
Lu Thai Textile Co., Ltd. Interim Report 2024
the end
of the
prior
year
Add:
Adjust
ments
for
change
d
accoun
ting
policie
s
Adjust
ments
for
correct
ions of
previo
us
errors
Other
adjust
ments
2.
Balanc
es as at
the 887,633,151 71,383,830. 395,872,135 154,396,198 107,628,898 1,215,124,336 6,490,910,719 9,014,156,872 393,749,387 9,407,906,2
beginn .00 75 .71 .73 .09 .54 .35 .71 .23 59.94
ing of
the
year
3.
Increas
e/
decrea
se in - - - -
70,872,279. 2,777,410. 135,287,246.2 242,768,176.3 230,883,31
the 23,935,632. -50.99 64,785,911. 122,552,833 11,884,863.
88 71 5 8 2.66
period 00 20 .73 72
(“-”
for
decrea
se)
70
Lu Thai Textile Co., Ltd. Interim Report 2024
3.1
Total
-
compr 70,872,279. 221,647,998.1 292,520,278.0 280,635,41
11,884,863.
ehensi 88 5 3 4.31
72
ve
income
3.2
Capital
increas - - -
33,831,239.
ed and 23,935,632. -50.99 64,785,911. 122,552,833 33,831,239.54
54
reduce 00 20 .73
d by
owners
3.2.1
Ordina
ry
shares
116.00 923.91 1,039.91 1,039.91
increas
ed by
shareh
olders
3.2.2
Capital
increas
ed by
holders
of
other
equity
instru
ments
3.2.3
Share-
based
payme
nts 11,076,415. 11,076,415.
11,076,415.02
include 02 02
d in
owners
’
equity
- - -
3.2.4 22,753,784.
23,935,748. -50.99 75,863,250. 122,552,833 22,753,784.61
Other 61
00 13 .73
3.3 - - -
71
Lu Thai Textile Co., Ltd. Interim Report 2024
Profit 86,360,751.90 86,360,751.90 86,360,751.
distrib 90
ution
3.3.1
Appro
priatio
n to
surplus
reserve
s
3.3.2
Appro
priatio
n to
general
reserve
3.3.3
Appro
priatio -
- -
n to 86,360,751.
86,360,751.90 86,360,751.90
owners 90
(or
shareh
olders)
3.3.4
Other
3.4
Transf
ers
within
owners
’
equity
3.4.1
Increas
e in
capital
(or
share
capital
72
Lu Thai Textile Co., Ltd. Interim Report 2024
) from
capital
reserve
s
3.4.2
Increas
e in
capital
(or
share
capital
) from
surplus
reserve
s
3.4.3
Loss
offset
by
surplus
reserve
s
3.4.4
Chang
es in
define
d
benefit
pensio
n
schem
es
transfe
rred to
retaine
d
earnin
gs
3.4.5
Other
compr
73
Lu Thai Textile Co., Ltd. Interim Report 2024
ehensi
ve
income
transfe
rred to
retaine
d
earnin
gs
3.4.6
Other
3.5
Specifi 2,777,410. 2,777,410.7
2,777,410.71
c 71 1
reserve
3.5.1
5,275,200. 5,275,200.0
Increas 5,275,200.00
00 0
e in the
period
3.5.2
2,497,789. 2,497,789.2
Used 2,497,789.29
29 9
in the
period
3.6
Other
4.
Balanc
es as at 863,697,519 71,383,779. 331,086,224 31,843,365. 178,501,177 2,777,410. 1,215,124,336 6,626,197,965 9,256,925,049 381,864,523 9,638,789,5
the end .00 76 .51 00 .97 71 .54 .60 .09 .51 72.60
of the
period
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2024
Unit: RMB
H1 2024
Item
Share capital Other equity instruments Capital Less: Treasury Other Specific Surplus reserves Retained Other Total owners’
74
Lu Thai Textile Co., Ltd. Interim Report 2024
Preferred Perpetual reserves stock comprehensive reserve earnings equity
Other
shares bonds income
1. Balances as
at the end of 863,607,634.00 71,383,677.78 396,172,649.00 193,438,720.78 -41,439.79 1,257,552,275.70 5,923,889,542.37 8,319,125,618.28
the prior year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for corrections
of previous
errors
Other
adjustments
2. Balances as
at the
863,607,634.00 71,383,677.78 396,172,649.00 193,438,720.78 -41,439.79 1,257,552,275.70 5,923,889,542.37 8,319,125,618.28
beginning of
the year
3. Increase/
decrease in the - -
-46,242,738.00 -86.69 11,090.23 -29,557,052.25 -32,927,447.39
period (“-” for 150,391,321.46 193,252,660.78
decrease)
3.1 Total
comprehensive 11,090.23 76,692,714.23 76,703,804.46
income
3.2 Capital
increased and - -
-46,242,738.00 -86.69 -3,381,485.37
reduced by 150,391,321.46 193,252,660.78
owners
3.2.1 Ordinary
shares -
-46,242,738.00 -199,954,616.22
increased by 153,711,878.22
shareholders
3.2.2 Capital
increased by
holders of
other equity
instruments
3.2.3 Share-
based
3,320,515.96 3,320,515.96
payments
included in
75
Lu Thai Textile Co., Ltd. Interim Report 2024
owners’ equity
-
3.2.4 Other -86.69 40.80 193,252,614.89
193,252,660.78
3.3 Profit
-106,249,766.48 -106,249,766.48
distribution
3.3.1
Appropriation
to surplus
reserves
3.3.2
Appropriation
-106,249,766.48 -106,249,766.48
to owners (or
shareholders)
3.3.3 Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3 Loss
offset by
surplus
reserves
3.4.4
Changes in
defined benefit
pension
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
76
Lu Thai Textile Co., Ltd. Interim Report 2024
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balances as
at the end of 817,364,896.00 71,383,591.09 245,781,327.54 186,060.00 -30,349.56 1,257,552,275.70 5,894,332,490.12 8,286,198,170.89
the period
H1 2023
Unit: RMB
H1 2023
Item Other equity instruments Other
Capital Less: Treasury Specific Retained Total owners’
Share capital Preferred Perpetual comprehensive Surplus reserves Other
Other reserves stock reserve earnings equity
shares bonds income
1. Balances as
at the end of 887,633,151.00 71,383,830.75 457,252,169.95 154,396,198.73 -30,162.34 1,212,015,596.90 5,600,420,185.06 8,074,278,572.59
the prior year
Add:
Adjustments
for changed
accounting
policies
Adjustments
for corrections
of previous
errors
Other
adjustments
2. Balances as
at the
887,633,151.00 71,383,830.75 457,252,169.95 154,396,198.73 -30,162.34 1,212,015,596.90 5,600,420,185.06 8,074,278,572.59
beginning of
the year
3. Increase/
decrease in the -
-23,935,632.00 -50.99 -64,785,911.20 -77,408.91 223,072,508.91 256,826,339.54
period (“-” for 122,552,833.73
decrease)
77
Lu Thai Textile Co., Ltd. Interim Report 2024
3.1 Total
comprehensive -77,408.91 309,433,260.81 309,355,851.90
income
3.2 Capital
increased and -
-23,935,632.00 -50.99 -64,785,911.20 33,831,239.54
reduced by 122,552,833.73
owners
3.2.1 Ordinary
shares
116.00 923.91 1,039.91
increased by
shareholders
3.2.2 Capital
increased by
holders of
other equity
instruments
3.2.3 Share-
based
payments 11,076,415.02 11,076,415.02
included in
owners’ equity
-
3.2.4 Other -23,935,748.00 -50.99 -75,863,250.13 22,753,784.61
122,552,833.73
3.3 Profit
-86,360,751.90 -86,360,751.90
distribution
3.3.1
Appropriation
to surplus
reserves
3.3.2
Appropriation
-86,360,751.90 -86,360,751.90
to owners (or
shareholders)
3.3.3 Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
78
Lu Thai Textile Co., Ltd. Interim Report 2024
capital (or
share capital)
from surplus
reserves
3.4.3 Loss
offset by
surplus
reserves
3.4.4
Changes in
defined benefit
pension
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balances as
at the end of 863,697,519.00 71,383,779.76 392,466,258.75 31,843,365.00 -107,571.25 1,212,015,596.90 5,823,492,693.97 8,331,104,912.13
the period
79
Lu Thai Textile Co., Ltd. Interim Report 2024
III Company Profile
Lu Thai Textile Co., Ltd. (hereinafter referred to as the “Company”) is a joint venture invested by Zibo Lucheng Textile
Investment Co., Ltd (originally named Zibo Lucheng Textile Co., Ltd, hereinafter referred to as Lucheng Textile) and Thailand
Tailun Textile Co., Ltd. On 3 February 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 19
August 1997 with B-shares stock code of 200726. On 24 November 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 25 December 2000 with A-shares stock code of 000726 through approval by Shenzhen Stock
Exchange with No. (2000) 162 Listing Notice.
As approved by 2000 Annual 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 Annual 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 Annual 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 December 2003, the inner employees’ shares reach 3 years since listing on the A-share stock
market, and they set out circulation on 26 December 2003.
As approved by the Annual General Meeting 2006 held in June 2007, the Company implemented the plan on converting 10 shares
to all its shareholders with capital reserves for every 10 shares. After capitalization, the registered capital of the Company was
RMB 844.8648 million.
The Company, in accordance with the official reply on approving Lu Thai Textile Co., Ltd. to issue additional shares (ZJXK [2008]
No. 890 document) from CSRC, issued the Renminbi common shares (A shares) amounting to 150 million shares on 8 December
2008.
According to the relevant resolution of the 2nd Special Extraordinary General Meeting of 2011, the relevant resolution of the 15th
Meeting of the 6th Board of Directors, the Opinion of China Securities Regulatory Commission on the Restricted Share Incentive
Plan of Lu Thai Textile Co., Ltd. (Shang-Shi-Bu-Han [2011] No. 206), the Company applied for a registered capital increment of
RMB 14.09 million, which was contributed by restricted share incentive receivers with monetary funds.
In accordance with the resolution of Proposal on Repurchasing and Canceling Partial Restricted Shares already Granted for the
Original Incentive Targets not Reaching the Incentive Conditions made at the 23rd Session of the 6th Board of Directors on 13
August 2012, the Company canceling a total of 60,000.00 shares already granted for the original incentive targets not reaching the
incentive conditions.
According to the second temporary resolution of Proposal on counter purchase of part of the domestic listed foreign share (B share)
on 25 June 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
80
Lu Thai Textile Co., Ltd. Interim Report 2024
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 the 6th Board of Directors on 27 March 2013, the
Company repurchase and cancel 4,257,000 shares owned by original people whom to motivate.
According to the Proposal on Repurchase and Write-off of Partly of the Original Incentive Targets Not Met with the Incentive
Conditions but Granted Restricted Shares approved on the 11th Meeting of the 7th Board of Directors on 11 June 2014, to execute
repurchase and write-off of the whole granted shares of 42,000 shares of the original incentive targets not met with the incentive
targets of the Company.
As per the Proposal on Buy-back of Some A- and B-shares considered and approved as a resolution at the 1st special meeting of
shareholders on 5 August 2015, the Company repurchased 33,156,200 domestically listed foreign shares (B-shares).
As per the Proposal on Buy-back of Some B-shares considered and approved as a resolution at the 2nd Extraordinary General
Meeting on 23 March 2018, the Company repurchased 64,480,800 domestically listed foreign shares (B-shares).
There were 10,800 shares of the Company which were converted from the convertible bonds in 2020.
In line with the resolution of the 1st Extraordinary General Meeting of the Company on 13 May 2021 and the resolution of the
24th Meeting of the 9th Board of Directors on 17 May 2021, the Company implemented the restricted share incentive scheme and
applied for a registered capital increment of RMB24,285,000 which was contributed by restricted share incentive receivers with
monetary funds.
In line with the resolutions of the 26th Meeting of the 9th Board of Directors and the 2nd Extraordinary General Meeting of 2021
convened by the Company respectively on 26 August 2021 and 13 September 2021 that the Proposal on Repurchase and Cancel
Authorized but Unlocked Restricted Share of the Incentive Personnel not Conforming to the Incentive Condition, the Company
applied to reduce the registered capital of RMB80,000.
There were 4,000 shares of the Company which were converted from the convertible bonds in 2021.
In line with the resolution of the first Extraordinary General Meeting of the Company on 13 May 2021 and the resolution of the
30th session of the Ninth Board of Directors on 18 February 2022, the Company applied for an increase of the share capital by
RMB 5,838,000, which was contributed by 343 restricted share incentive receivers with monetary funds.
In conformity with the resolution of the 30th session of the Ninth Board of Directors of the Company on 18 February 2022 and the
resolution of the 1st Extraordinary General Meeting of 2022 of the Company on 7 March 2022, the Proposal on Repurchase and
Cancel Authorized but Unlocked Restricted Share of the Incentive Personnel not Conforming to the Incentive Condition, all the
240,000 shares authorized to the original incentive personnel who did not conform to the incentive condition of the Company were
repurchased and cancelled.
In conformity with the resolution of the second session of the Tenth Board of Directors on 29 June 2022 and the resolution of the
third Extraordinary General Meeting of the Company on 15 July 2022, the Proposal on Repurchase and Cancel Authorized but
Unlocked Restricted Share of the Incentive Personnel not Conforming to the Incentive Condition, all the 308,000 shares
authorized to the original incentive personnel who did not conform to the incentive condition of the Company were repurchased
and cancelled.
There were 1,900 shares of the Company which were converted from the convertible bonds in 2022.
In line with the resolution of the 3rd Extraordinary General Meeting of the Company on 15 July 2022, the Proposal on
Repurchasing the Domestically Listed Foreign Shares (B Shares) of the Company, the Company repurchased 23,935,700 B shares.
In conformity with the resolution of the 7th session of the Tenth Board of Directors on 10 April 2023 and the resolution of the
81
Lu Thai Textile Co., Ltd. Interim Report 2024
2022 General Meeting of the Company on 12 May 2023, the Proposal on Repurchase and Cancel Authorized but Unlocked
Restricted Share of the Incentive Personnel not Conforming to the Incentive Condition, all the 90,000 shares authorized to the
original incentive personnel who did not conform to the incentive condition of the Company were repurchased and cancelled.
There were 200 shares of the Company which were converted from the convertible bonds in 2023.
In line with the resolution of the 1st Extraordinary General Meeting of the Company on 6 July 2023, the Proposal on Repurchasing
the Domestically Listed Foreign Shares (B Shares) of the Company, the Company repurchased 46,176,400 B shares.
In conformity with the resolution of the 18th session of the Tenth Board of Directors on 19 January 2024 and the resolution of the
First Extraordinary General Meeting of the Company on 5 February 2024, the Proposal on Repurchase and Cancel Authorized but
Unlocked Restricted Share of the Incentive Personnel not Conforming to the Incentive Condition, all the 665,00 shares authorized
to the original incentive personnel who did not conform to the incentive condition of the Company were repurchased and cancelled.
There were 200 shares of the Company which were converted from the convertible bonds in H1 2024.
As at 30 June 2024, the Company's registered capital stood at RMB817,364,900.
The Company’s registered address: No. 61, Luthai Avenue, Hi-tech Development Zone, Zibo, Shandong
The Company’s unified social credit code: 91370300613281175K
The Company’s legal representative: Liu Zibin
The Company establishes the corporate governance structure consisting of the shareholders meeting, the Board of Directors and
the Supervisory Committee. At present, the Company has set up various departments including the Yarn-dyed Fabric Product Line,
Garment Product Line, the Clothing Marketing Department, the Global Marketing Department, the Supply Chain Department, Lu
Thai Engineering Technology Institute, the Enterprise Management Department, the Financial Management Department and the
Strategy and Market Department etc.
The scope of business of the Company and its subsidiaries shall include general projects: Fabric textile processing; fabric printing
and dyeing processing; garment manufacturing; the sales of textiles and raw materials; clothing wholesale; clothing retail; Internet
sales (except for the sale of goods requiring a license); the production of Class I medical devices; the production of routine masks
(non-medical); the production of labour protection appliances; software development; technical services, development of
technology, technology consulting, technical exchange, technology transfer and technology promotion; the sales of textile special
equipment; the sales of mechanical and electrical equipment; the procurement of primary agricultural products; business training
(trainings that require approval such as educational training and vocational skill training exclusive); housing lease; the lease of
non-residential real estate; the lease of land usage right; the sales of special chemical products (dangerous chemicals exclusive);
and the sales of building materials. It shall also include licensed projects (business activities can be carried out legally and
independently with business license in addition to projects that must be approved by law): Inspection and testing service; catering
service; power generation business, power transmission business, and power supply (distribution) business. (For projects that must
be approved by law, the business activities can only be carried out upon approval by the relevant departments, and the specific
business projects shall be subject to the approval document or license of relevant departments)
The Company’s financial statements and Notes thereof have been approved by the 24th Meeting of the 10th Board of Directors
held on 28 August 2024.
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Lu Thai Textile Co., Ltd. Interim Report 2024
IV Basis for Preparation of Financial Statements
1. Preparation Basis
This financial statement is prepared in accordance with the accounting standards for business enterprises, and the application guide,
interpretation and other relevant regulations (hereinafter collectively referred to as “Accounting Standards for Business Enterprises”)
issued by the Ministry of Finance. In addition, the Company also disclosed relevant financial information in accordance with the
Regulations on Information Disclosure and Compilation for Companies Public Offering Securities No. 15-General Provisions on
Financial Report (revised in 2023) issued by China Securities Regulatory Commission.
The Company's accounting is based on the accrual basis. Except for certain financial instruments, this financial statement is
measured on the basis of historical cost. If the asset is impaired, the corresponding impairment provision shall be made in accordance
with relevant regulations.
2. Going-concern
The financial statements are presented on the basis of continuing operations.
V Significant Accounting Policies and Estimates
Specific accounting policies and accounting estimates indicators:
The Company determines income recognition policy according to its production and operation characteristics, and the specific
accounting policies are shown in Note V (27).
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the Accounting Standards for Business
Enterprises, which factually and completely present the consolidated, and the Company’s financial positions as at 30 June 2024,
business results and cash flows for H1 2024, and other relevant information.
2. Fiscal Year
The Company’s fiscal year starts on 1 January and ends on 31 December of every year according to the Gregorian calendar.
3. Operating Cycle
The Company regards 12 months as an operating cycle.
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Lu Thai Textile Co., Ltd. Interim Report 2024
4. Recording Currency
The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company’s overseas subsidiaries confirm
to adopt HK Dollar and US Dollar as the recording currency according their major economic environment of the operating. When
preparing the financial statements for the Reporting Period, the Company adopted RMB as the recording currency.
5. Methods for Determining Materiality Standards and Selection Criteria
Applicable □ Not applicable
Item Materiality criteria
Significant receivables withdrawal of bad
Individual receivables exceeding 0.3% of total assets
debt provision separately accrued
Significant receivables reversed or recovered
Individual receivables exceeding 0.3% of total assets
during the Reporting Period
Significant written-off of receivables during
Individual receivables exceeding 0.3% of total assets
the Reporting Period
Significant prepayments aging over one year Individual prepayment amounts exceeding 0.3% of total assets
Significant construction in progress Individual investment amounts exceeding 1% of total assets
Significant accounts payable aging over one
Individual accounts payable amounts exceeding 0.3% of total assets
year
A subsidiary whose total assets, operating income, or total profit (or absolute loss
Significant non-wholly-owned subsidiary amount) exceeds 10% of the corresponding item in the consolidated financial
statements is considered a significant non-wholly owned subsidiary
Significant investment activity projects Individual investment amounts exceeding 5% of total assets
6. Accounting Treatment for Business Combinations under the Common Control and Not under the
Common Control
(1) Business combinations under the same control
For business combinations under the same control, the assets and liabilities of the merged party acquired by the merger party in the
merger, shall be measured at the carrying value of the merged party in the consolidated financial statement of the final controller
on the combination date. As for the difference between the carrying value of the merger consideration and carrying value of the net
assets obtained in the merger, the capital reserve (capital stock premium) shall be adjusted, and if the capital reserve (capital stock
premium) is insufficient to offset, the retained earnings shall be adjusted.
Realize business combination under the same control in steps by transaction several times
The assets and liabilities of the combined party acquired by the combining party in the combination, shall be measured at the book
value of the combined party in the consolidated financial statement of the final controller on the combination date; the difference
between the sum of the book value of investment held before combination plus the book value newly paid on the combination date,
and the book value of the net assets acquired in combination, is used for adjusting the capital reserve (capital stock premium), and
if the capital reserve (capital stock premium) is insufficient to offset, the retained earnings shall be adjusted. The long-term equity
investment held by the combining party before acquiring the control right of the combined party, if relevant gains and losses, other
comprehensive revenues and changes in other owner’s equity have been confirmed from the date of acquiring equity and the date
when the combining party and the combined party under the final control of the same party, whichever is later, to the combination
date, shall offset the retained earnings at the beginning or current profits and losses in the period of comparing statements.
(2) Business combinations not under the same control
For a business combination not under the same control, the cost of the combination is the assets paid, liabilities incurred or
assumed, and the fair value of the equity securities issued on the acquisition date to obtain control over the purchased party. On the
purchase date, the acquired assets, liabilities and contingent liabilities of the purchased party are recognized at fair value.
84
Lu Thai Textile Co., Ltd. Interim Report 2024
The difference between the merger cost and the fair value of the identifiable net assets of the acquired party acquired in the merger
(the former is greater than the latter) is recognized as goodwill, and subsequent measurement is made based on the cost deducting
the accumulated impairment provision; the difference between the merger cost and the fair value of the identifiable net assets of
the acquired party acquired in the merger (the former is less than the latter) shall be recorded into the current profit or loss after the
recheck.
Achieve business combination not under the same control step by step through multiple transactions
The cost of consolidation is the sum of the consideration paid at the purchase date and the fair value at the purchase date of the
equity already held by the acquired party before the purchase date. For equity of the acquired party that is already held before the
purchase date, it shall be re-measured according to the fair value of the equity on the purchase date, and the difference between the
fair value and its book value shall be included in the current investment income. If the equity of the acquired party held before the
purchase date involves other comprehensive income and the changes of other owner's equity, it shall be transferred to current
income on the purchase date, other comprehensive income arising from the remeasurement of the net liability or net asset of a
defined benefit plan by the investee, as well as other comprehensive income related to investments in non-trading equity
instruments designated at fair value through other comprehensive income, are excluded.
(3) Treatment of transaction costs in business combinations
Intermediary expenses such as auditing, legal services, evaluation and consulting and other related management expenses incurred
for the business combination shall be included in the current profit and loss when incurred. The transaction costs of equity
securities or debt securities issued as the merger consideration shall be included in the initial recognition amount of equity
securities or debt securities.
7. Criteria for Judging Control and Methods for Preparing Consolidated Financial Statements
(1) Criteria for judging control
The consolidation scope of the consolidated financial statements is determined on the basis of control. Control means that the
Company has the power over the invested unit, enjoys variable returns by participating in the related activities of the invested unit,
and has the ability to use the power over the invested unit to influence the amount of its return. When changes in relevant facts and
circumstances lead to changes in the elements involved in the definition of control, the Company will reassess.
In determining whether to include a structured entity within the consolidation scope, the Company considers all facts and
circumstances, including assessing the purpose and design of the structured entity's establishment, identifying the types of variable
returns, and evaluating whether the Company controls the structured entity based on whether it has assumed some or all of the
variability in returns by participating in its relevant activities.
(2) Preparation method of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of the Company and its
subsidiaries and other relevant materials. When preparing the consolidated financial statements, the accounting policies and
accounting fiscal of the Company and those of subsidiaries shall be consistent and the large transactions and intercourse balance
among companies shall be offset. Subsidiaries and businesses increased due to business combinations under the same control
during the Reporting Period shall be included into the Company’s combination scope since the date when they are jointly
controlled by the final controller, and the operating result and cash flow since then shall be respectively included into the
consolidated income statement and consolidated cash flow statement. As for subsidiaries and businesses increase due to business
combinations not under the same control during the Reporting Period, the revenue, expenses and profit or those subsidiaries and
businesses from the purchase date to the end of the Reporting Period shall be included into the consolidated income statement and
the cash flow thereof shall be included into the consolidated cash flow statement. The share of shareholders’ equity in subsidiaries
not belonging to the Company shall be regarded as the minority interests and separately listed under the item of shareholders’
equity in the consolidated balance sheet. The share of current portion of net profit or loss in subsidiaries belonging to minority
interests shall presented as the item of minority interests under the item of net profit in the consolidated income statement. The
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difference between the losses of subsidiaries born by not-controlling shareholders and the share of the company’s owners’ equity
at the period-beginning the not-controlling shareholders enjoy (the former is larger than the latter) shall be offset the minority
interests.
8. Classification of Joint Arrangements and Accounting Treatment of Joint Operations
Joint arrangement refers to an arrangement under the joint control of two or more participants. The Company's joint arrangements are
divided into joint operations and joint ventures.
(1) Joint operations
A joint operation refers to a joint arrangement whereby the Company enjoys relevant assets of the arrangement, and assumes
obligations relevant liabilities of the arrangement.
The Company recognizes the following items related to the interest share in joint operation, and conducts accounting treatment in
accordance with relevant provisions of the Accounting Standard for Business Enterprises:
A. It recognizes separately held assets and jointly held assets according to the proportion;
B. It recognizes separately assumed liabilities and jointly assumed liabilities according to the proportion;
C. Income from the sale of the proportion of joint operation output is recognized;
D. Income from the sale of the joint operation output is recognized according to the proportion.
E. While the separately incurred fee is recognized, the incurred fee for joint operation is recognized according to the proportion.
(2) Joint ventures
A joint venture refers to a joint arrangement whereby the Company enjoys the right of the net assets of the arrangement only.
Accounting treatment of the investment of a joint venture is conducted by the Company in line with the provisions of relevant equity
method of accounting for long-term equity investment.
9. Confirmation Standard for Cash and Cash Equivalent
The term “cash” refers to cash on hand and deposits that are available for payment at any time. Cash equivalents refer to
investments held by the Company that are short-term, highly liquid, easily convertible into known amounts of cash, and have little
risk of change in value.
10. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
(1) Foreign currency business
The Company's foreign currency business is translated into the amount of the recording currency at the approximate exchange rate of
the spot exchange rate on the transaction date.
On the balance sheet date, foreign currency monetary items are translated at the spot exchange rate on the balance sheet date. The
exchange difference arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate
at the time of initial recognition or the previous balance sheet date is included in the current profit and loss; for foreign currency non-
monetary items measured at historical cost, the translation adopts the spot exchange rate on the day the transaction occurs; for foreign
currency non-monetary items measured at fair value, the translation adopts the spot exchange rate on the day when the fair value is
confirmed, and the difference between the amount of recording currency and the amount of original recording currency shall be
included into the current profit or loss or other comprehensive income based on the nature of non-monetary items.
(2) Conversion of foreign currency financial statements
When converting the foreign currency financial statements of overseas subsidiaries on the balance sheet date, the assets and liabilities
items in the balance sheet shall be converted at the spot exchange rate on the balance sheet date. Other items of shareholders' equity
except for "undistributed profits" shall be converted at the spot exchange rate on the occurrence date.
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Income and expense items in the income statement shall be converted using the approximate spot exchange rate on the transaction
date.
All items in the cash flow statement are converted according to the approximate spot exchange rate on the occurrence date of cash
flow. The impact of exchange rate changes on cash is taken as a reconciling item, and the item "impact of exchange rate changes on
cash and cash equivalents" is separately listed in the cash flow statement to reflect.
The difference arising from the conversion of financial statements is reflected in the "other comprehensive income" under the
shareholders' equity in the balance sheet.
When disposing of the overseas operation and losing control rights, the foreign currency statement conversion difference related to
the overseas operation shown under the shareholders' equity in the balance sheet shall be transferred to current profit and loss of
disposal in whole or in proportion to the disposal of overseas operation.
11. Financial Instruments
Financial instruments refer to contracts that form one party’s financial assets and form other parties’ financial liabilities or equity
instruments.
(1) Recognition and derecognition of financial instruments
The Company recognizes a financial asset or liability when it becomes a party of the relevant financial instrument contract.
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 meet the following derecognition conditions for transfer of financial assets.
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 Company (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.
The purchase and sale of financial assets under the normal ways shall be recognized and stopped to be recognized respectively at
the price of transaction date.
(2) Classification and measurement of financial assets
The Company classifies financial assets into the following three categories according to the business mode of managing financial
assets and the contractual cash flow characteristics of financial assets upon initial recognition: financial assets measured at
amortized cost, financial assets measured at fair value and whose changes are included in other comprehensive income, and
financial assets measured at fair value and whose changes are included in current profit and loss.
Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value and whose changes
are included in current profit and loss, relevant transaction expenses are directly included in current profit and loss; for other types
of financial assets, relevant transaction expenses are included in the initial recognition amount. For accounts receivable arising
from the sale of products or the provision of labor services, which do not include or do not consider significant financing
components, the amount of consideration the Company is expected to be entitled to receive is taken as the initial recognition
amount.
Financial assets measured at amortized cost
The Company classifies financial assets that meet the following conditions and are not designated to be measured at fair value and
whose changes are included in current profit and loss as financial assets measured at amortized cost:
The Company's business model for managing this financial asset is aimed at collecting contractual cash flow;
The contractual terms of this financial asset stipulate that the cash flow generated on the specific date is only the payment of
principal and interest based on the principal amount outstanding.
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Such financial assets are measured in amortized cost by the effective interest method after initial recognition. Gains or losses
arising from financial assets measured in amortized cost that are not part of any hedging relationship are included in current profit
and loss when derecognition, amortization according to the effective interest method, or impairment is recognized.
Financial assets measured at fair value and whose changes are included in other comprehensive income
The Company classifies financial assets that meet the following conditions and are not designated to be measured at fair value and
whose changes are included in current profit and loss as financial assets measured at fair value and whose changes are included in
other comprehensive income:
The Company's business model for managing this financial asset is aimed at both collecting the contractual cash flow and selling
this financial asset;
The contractual terms of this financial asset stipulate that the cash flow generated on the specific date is only the payment of
principal and interest based on the principal amount outstanding.
Such financial assets are subsequently measured at fair value after initial recognition. Interest, impairment losses or gains and
exchange gains and losses calculated by the effective interest method are included in current profit and loss, while other gains or
losses are included in other comprehensive income. When the financial asset is derecognized, the accumulated gains or losses
previously included in other comprehensive income are transferred out and included in current profit and loss.
Financial assets measured at fair value and whose changes are included in current profit and loss
Except for the above financial assets measured at amortized cost and at fair value with changes included in other comprehensive
income, the Company classifies all other financial assets as financial assets measured at fair value with changes included in current
profit and loss. Upon initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company
irrevocably designates some financial assets that should have been measured at amortized cost or at fair value and whose changes
are included in other comprehensive income as financial assets measured at fair value and whose changes are included in current
profit and loss.
Such financial assets are subsequently measured at fair value after initial recognition, and the resulting gains or losses (including
interest and dividend income) are included in current profit and loss unless the financial assets are part of the hedging relationship.
The business model of managing financial assets refers to how the Company manages financial assets to generate cash flow. The
business model determines whether the cash flow of the financial assets managed by the Company comes from the collection of
contractual cash flow, the sale of financial assets or both. The Company determines the business model for managing financial
assets on the basis of objective facts and specific business objectives decided by key management personnel to manage financial
assets.
The Company evaluates the contractual cash flow characteristics of financial assets to determine whether the contractual cash flow
generated by the relevant financial assets on the specific date is only the payment of principal and interest based on the principal
amount outstanding. Among them, the principal refers to the fair value of financial assets upon initial recognition; interest includes
consideration for the time value of money, credit risks related to the principal amount outstanding in the specific period, and other
basic lending risks, costs and profits. In addition, the Company evaluates the contract terms that may lead to changes in the time
distribution or amount of contractual cash flow of financial assets to determine whether they meet the requirements of the above-
mentioned contractual cash flow characteristics.
Only when the Company changes the business mode of managing financial assets will all affected related financial assets be
reclassified on the first day of the first reporting period after business model changes, otherwise financial assets cannot be
reclassified after initial recognition.
(3) Classification and measurement of financial liabilities
The Company's financial liabilities are classified upon initial recognition as: financial liabilities measured at fair value and whose
changes are included in current profit and loss, and financial liabilities measured at amortized cost. For financial liabilities that are
not classified as measured at fair value and whose changes are included in current profit and loss, relevant transaction costs are
included in the initial recognition amount.
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Financial liabilities measured at fair value and whose changes are included in current profit and loss
Financial liabilities measured at fair value and whose changes are included in current profit and loss include transactional financial
liabilities and financial liabilities designated as measured at fair value upon initial recognition and whose changes are included in
current profit and loss. Subsequent measurement shall be carried out according to fair value for such financial liabilities. Gains or
losses resulting from changes in fair value and dividends and interest expenses related to such financial liabilities shall be included
in current profit and loss.
Financial liabilities measured at amortized cost
Other financial liabilities are subsequently measured at amortized cost by using the effective interest method. Gains or losses
resulting from derecognition or amortization are included in current profit and loss.
Distinction between financial liabilities and equity instruments
Financial liabilities refer to liabilities that meet one of the following conditions:
① The contractual obligation to deliver cash or other financial assets to other parties.
② The contractual obligation to exchange financial assets or financial liabilities with other parties under potentially unfavorable
conditions.
③ Non-derivative contracts that must be or can be settled with the enterprise's own equity instruments in the future, and the
enterprise will deliver a variable number of its own equity instruments according to the contract.
④ Derivative contracts that must be or can be settled with the enterprise's own equity instruments in the future, except derivatives
contracts that exchange a fixed amount of cash or other financial assets with a fixed amount of its own equity instruments.
Equity instruments refer to contracts that can prove that an enterprise has the residual equity in its assets after deducting all
liabilities.
If the Company cannot unconditionally avoid performing a contractual obligation by delivering cash or other financial assets, the
contractual obligation meets the definition of financial liability.
If a financial instrument must be or can be settled with the Company's own equity instruments, it is necessary to consider whether
the Company's own equity instruments used to settle the instrument are used as substitutes for cash or other financial assets or to
enable the holder of this instrument to enjoy the residual equity in the assets after deducting all liabilities from the issuer. If it is
the former, this instrument is the Company's financial liability; if the latter is the case, this instrument is the Company's equity
instrument.
(4) Derivative financial instruments and embedded derivatives
The Company's derivative financial instruments include forward foreign exchange contracts and exchange option contracts, etc.
Initially, the fair value on the date when the derivative transaction contract is signed shall be used for measurement, and the fair
value shall be used for subsequent measurement. Derivative financial instruments with positive fair value are recognized as an
asset, while those with negative fair value are indeed recognized as a liability. Any gains or losses arising from changes in fair
value that do not conform to the provisions of hedge accounting are directly included in current profit and loss.
For hybrid instruments containing embedded derivatives, such as the main contract is a financial asset, the relevant provisions on
classification of financial assets shall apply to the hybrid instruments as a whole. If the main contract is not a financial asset, and
the hybrid instrument is not measured at fair value and its changes are included in current profit and loss for accounting treatment,
the embedded derivative instrument has no close relationship with the main contract in terms of economic characteristics and risks,
and has the same conditions as the embedded derivative instrument, and the separate existing instrument meets the definition of
derivative instrument, the embedded derivative instrument shall be separated from the hybrid instrument and treated as a separate
derivative financial instrument. If it is not possible to separately measure embedded derivative instruments at the time of
acquisition or the subsequent balance sheet date, the hybrid instruments as a whole are designated as financial assets or financial
liabilities measured at fair value and their changes are included in current profit and loss.
(5) Fair value of financial instruments
See Note V(12) for the method of determining the fair value of financial assets and liabilities.
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(6) Impairment of financial assets
The Company conducts impairment accounting treatment for the following items and confirms the loss provision based on the
expected credit losses:
Financial assets measured at amortized cost;
Receivables and debt instrument investments measured at fair value and whose changes are included in other comprehensive
income;
Contract assets defined in the Accounting Standards for Business Enterprises No. 14-Revenue;
Lease receivables;
Financial guarantee contracts (except those that are measured at fair value and whose changes are included in current profit and
loss, the transfer of financial assets does not meet the conditions for derecognition or continue to involve in the transferred
financial assets).
Measurement of expected credit loss
Expected credit loss refers to the weighted average of the credit losses of financial instruments weighted by the risk of default.
Credit loss refers to the difference between all contractual cash flows discounted at the original effective interest rate and
receivable according to the contract and all cash flows expected to be collected of the Company, i.e. the present value of all cash
shortfalls.
Considering the reasonable and reliable information about past events, current situation and the forecast of future economic
situation, the company takes the risk of default as the weight, calculates the probability weighted amount of the present value of
the difference between the cash flow receivable from the contract and the cash flow expected to be received, and confirms the
expected credit loss.
The Company separately measures the expected credit losses of financial instruments at different stages. If the credit risk of
financial instruments has not increased significantly since the initial recognition, it is in the first stage. The Company measures the
loss reserve according to the expected credit loss in the next 12 months; if the credit risk of financial instruments has increased
significantly since its initial recognition but no credit impairment has occurred, it is in the second stage. The Company measures
the loss reserve according to the expected credit loss during the whole duration of this instrument; if the financial instrument has
suffered credit impairment since its initial recognition, it is in the third stage. The Company measures the loss reserve according to
the expected credit loss during the whole duration of this instrument.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that their credit risk has not
increased significantly since the initial recognition, and measures the loss reserve according to the expected credit loss in the next
12 months.
The expected credit loss during the whole duration refers to the expected credit loss caused by all possible default events during
the whole expected duration of financial instruments. The expected credit loss in the next 12 months refers to the expected credit
loss caused by the possible default events of financial instruments within 12 months (or the expected duration if the expected
duration of financial instruments is less than 12 months) after the balance sheet date, which is part of the expected credit loss in the
whole duration.
When measuring the expected credit loss, the longest term that the Company needs to consider is the longest contract term that the
enterprise faces credit risk (including the option to renew the contract).
The Company calculates interest income based on the book balance before deducting impairment provisions and the effective
interest rate for financial instruments in the first and second stages and with low credit risk. The interest income shall be calculated
according to their book balance minus the amortized cost after impairment provision and the effective interest rate for financial
instruments in the third stage.
For receivables such as notes receivable, accounts receivable, accounts receivable financing, other receivables, and contract assets,
if the credit risk characteristics of a particular customer significantly differ from those of other customers in the portfolio, or if
there is a significant change in the customer's credit risk characteristics, the Company will make receivables withdrawal of bad
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debt provision separately accrued. Apart from receivables withdrawal of bad debt provision separately accrued are made, the
Company classifies receivables into portfolios based on credit risk characteristics and calculates the allowance for doubtful debts
on a portfolio basis.
Notes receivable, accounts receivable and contract assets
The Company always measures its loss reserves at an amount equivalent to the expected credit loss during the entire duration for
notes receivable, contract assets and accounts receivable, regardless of whether there is any significant financing component.
If a single financial asset or contract assets cannot be used to evaluate the expected credit loss information at a reasonable cost, the
Company will divide the notes receivable, accounts receivable and contract assets into portfolio on the basis of the credit risk
features, and calculate the expected credit loss based on the portfolio. The basis for determining the portfolio is as follows:
A. Notes receivable
Notes receivable portfolio 1: bank acceptance bills with low credit rating
Notes receivable portfolio 2: commercial acceptance bills
B. Accounts receivable
Accounts receivable portfolio 1: payment not overdue (with L/C)
Accounts receivable portfolio 2: payment not overdue (with credit insurance)
Accounts receivable portfolio 3: payment overdue (without credit insurance)
Accounts receivable portfolio 4: payment overdue (with credit insurance)
Accounts receivable portfolio 5: payment overdue (without credit insurance)
For notes receivable and contract assets divided into portfolios, with reference to historical credit loss experience, combined with
current conditions and predictions of future economic conditions, the Company has calculated expected credit losses through
default risk exposure and expected credit loss rate for the entire duration.
For accounts receivable divided into portfolios, with reference to historical credit loss experience, combined with current
conditions and predictions of future economic conditions, the Company has prepared a comparison table between the number of
aging/overdue days of accounts receivable and the expected credit loss rate over the entire duration, and has calculated the
expected credit loss. The aging of accounts receivable is calculated from the date of recognition/the number of days overdue is
calculated from the expiry date of the credit period.
Other receivables
The Company divides other receivables into several portfolios based on the features of credit risk, and calculates the expected
credit losses on the basis of the combination. The basis for determining the portfolio is as follows:
Other receivables portfolio 1: Receivables from related parties within the scope of consolidation
Other receivables portfolio 2: Tax refund receivable
Other receivables portfolio 3: Deposit receivable and security deposit
Other receivables portfolio 4: other receivables
For other receivables that are divided into portfolios, the Company calculates the expected credit loss with the default risk
exposure and the expected credit loss rate within the next 12 months or the entire duration. For other receivables classified into
portfolios by aging, the aging is calculated from the date of recognition.
Creditors' investment and other creditors' investment
For creditors' investment and other creditors' investment, the Company calculates the expected credit based on the nature of the
investment, as well as kinds of types of counterparties and risk exposures, the default risk exposure and the expected credit loss
rate within the next 12 months or the entire duration loss.
Assessment on significant increase of credit risk
In order to determine the relative changes in the default risk of financial instruments during their expected life and to assess
whether the credit risk of financial instruments has increased significantly since initial recognition, the Company compares the
default risk of financial instruments on the balance sheet date with the default risk on the initial recognition date.
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When determining whether the credit risk has risen greatly since the initial recognition, the Company considers reasonable and
reliable information (forward-looking information inclusive) that can be obtained without unnecessary extra costs or efforts. The
information the Company considers shall include:
The debtor fails to pay the principal and interest according to the contract expiration date;
The external or internal credit ratings (if any) of financial instruments, which have occurred or are expected, deteriorate
significantly;
The debtor’s operating results, which have occurred or are expected, deteriorate significantly;
Existing or expected changes in technology, market, economy or legal environment will lead to a great adverse effect on the
debtor's ability to repay the Company.
Based on the nature of financial instruments, the Company assesses whether there is great risk in credit risk on the basis of
individual financial instruments or financial instrument portfolios. During assessment based on financial instrument portfolios, the
Company can divide financial instruments on the basis of common credit risk characteristics, such as overdue information and
credit risk ratings.
In case that the period overdue exceeds 30 days, the Company determines that there is a significant increase in the credit risk of
financial instruments.
Financial assets with depreciation of credit
The Company assesses, on the balance sheet date, whether there is any credit impairment to financial assets measured at amortized
cost and creditors' investment measured at fair value and whose changes are included in other comprehensive income. In case of
one or more events that adversely affect the expected future cash flow of a financial asset occur, the financial asset will become
financial assets with depreciation of credit. The observable information below can be treated as evidence for credit impairment to
financial assets:
The issuer or debtor is caught in a serious financial difficulty;
The debtor breaches the agreement of contract, such as default or overdue payment of interest or principal, or other default;
Due to economic or contractual considerations related to the debtor's financial difficulties, the Company gives concessions to the
debtor; and the concessions will not be made under any other circumstances;
There lies a great probability of bankruptcy or other financial restructuring for the debtor;
The issuer or debtor is caught in financial difficulties, which leads to the disappearance of the active market of the financial asset;
Presentation of expected credit loss provision
The Company remeasures expected credit losses on each balance sheet date to reflect the changes in the credit risk of financial
instruments since initial recognition; the increase or reversal amount of the loss reserve formed there from shall be included in the
current profit and loss as impairment losses or gains. For financial assets measured at amortized cost, the loss allowance offsets the
carrying amount of the financial asset listed in the balance sheet; for creditors’ investment that are measured at fair value and its
changes are included in other comprehensive income, the Company recognizes its loss reserve in other comprehensive income and
will not offset the carrying amount of the financial asset.
Write-offs
In case that the Company fails to reasonably expect the contract cash flow of the financial asset to be recovered in a full or partial
scale, the book balance of the financial asset will be written off directly. Such write-downs may constitute the derecognition for
related financial assets. This situation occurs frequently when the Company determines that the debtor does not have any assets or
any source of income to generate sufficient cash flow to repay the amount that will be written off. However, in accordance with
the procedures for recovering due payments of the Company, the written-off financial assets may still be affected by the execution
activities.
In case that the financial asset written off is recovered later, it shall be included in the current profit and loss as the reversal of the
impairment loss.
(7) Transfer of financial assets
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The transfer of financial assets refers to the transfer or delivery of financial assets to another party (transferee) other than the issuer
of the financial asset.
If the Company has transferred almost all the risks and rewards of the ownership of financial assets to the transferee, derecognize
the financial asset; if it retains almost all the risks and rewards of the ownership of financial assets, the financial asset will not be
derecognized.
If the Company has neither transferred nor retained almost all the risks and rewards of the ownership of financial assets, it shall be
dealt with in the following situations: if the control of the financial asset is abandoned, the confirmation of the financial asset shall
be terminated and the generated assets and liabilities shall be confirmed; If the financial assets are controlled, the relevant financial
assets shall be recognized according to the extent of their continued involvement in the transferred financial assets, and the
relevant liabilities shall be recognized accordingly.
(8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities,
and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial
asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above
circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
12. Measurement of Fair Value
Fair value refers to the price that market participants can receive from sales of a asset or shall pay for transfer of a liability in the
orderly transaction that occurs on the measurement date.
The Company measures related assets or liabilities at fair value, assuming that the orderly transaction of selling assets or
transferring liabilities is conducted in the main market of related assets or liabilities; if there is no main market, the Company
assumes that the transaction is conducted in the most beneficial market. The main market (or the most favorable market) is the
trading market that the Company can enter on the measurement date. The Company uses the assumptions used by market
participants to maximize their economic benefits when pricing the asset or liability.
For financial assets or financial liabilities with active markets, the Company uses the quotation in active markets to determine its
fair value. If there is no active market for financial instruments, the Company uses valuation techniques to determine its fair value.
When measuring non-financial assets at fair value, the ability of market participants to best use the asset for generating economic
benefits, or the ability to sell the asset to other market participants that can best use the asset to generate economic benefits shall be
considered.
The Company adopts valuation techniques that are applicable in the current situation and have sufficient available data and other
information to support it. Priority is given to using relevant observable input values. Only when observable input values are
unavailable or are not feasible to obtain, the unobservable input values can be used. For assets and liabilities measured or disclosed
at fair value in the financial statements, the fair value hierarchy to which they belong is determined based on the lowest level input
value that is important to the fair value measurement as a whole: the first level input value is the unadjusted quotation of the same
assets or liabilities able to be obtained in an active market on the measurement date; the second level input value is the directly or
indirectly observable input value of the relevant asset or liability except the first level input value; the third level input value is
unobservable input value of related assets or liabilities.
On each balance sheet date, the Company reassessed the assets and liabilities continuously measured at fair value confirmed in the
financial statements to determine whether there is a transition among levels of fair value measurement.
13. Inventory
(1) Classification
Inventories mainly include raw materials, work-in-progress, stock products, products processed on entrustment and etc.
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(2) Valuation method of inventories acquiring and issuing
Inventories shall be measured at actual cost when acquired, and the cost of the inventories including the procurement cost,
processing cost and other costs. Grey yarn, dyed yarn, and plus material shall be measured at first-in first-out method when
acquired and delivered; other inventories shall be measured as per the weighted average method
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of inventories
On the balance sheet date, the inventories shall be measured at the lower of cost and net realizable value. When their net realizable
value falls below cost, an allowance for inventory impairment is provided.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the
estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence
obtained, and takes into consideration the purpose of holding inventories and effect of post balance sheet events.
The Company generally provides for inventory depreciation on a per-item basis. For inventories that are numerous in quantity and
low in unit price, an allowance for inventory impairment is provided based on inventory categories. On the balance sheet date, if
the factors affecting the value of inventories previously written down have disappeared, the provision for inventory write-downs is
reversed to the extent of the original amount provided.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of the low-value consumption goods and packing articles
For the Low-value consumption goods and the packing articles should be amortized by one-off amortization method when
consuming.
14. Long-term Equity Investments
Long-term equity investments include equity investments in subsidiaries, joint ventures and associated enterprises. The investee
that the Company is able to exert significant influence is an associated enterprise of the Company.
(1) Determination of initial investment cost
Long-term equity investment that forms a business combination: Long-term equity investment obtained by business combination
under the same control, on the merger date, based on the book value share of the merged party’s owners’ equity in the final
controller’s consolidated financial statements as investment cost; The long-term equity investment acquired by a business
combination shall be the investment cost of the long-term equity investment according to the cost of the combination.
For long-term equity investments obtained by other means: the long-term equity investment obtained by paying cash shall be the
initial investment cost according to the actual purchase price; the long-term equity investment obtained by issuing equity securities
shall be the initial investment cost of the fair value of the equity securities issued.
(2) Subsequent measurement and profit and loss confirmation method
Investment in subsidiaries is accounted for using the cost method unless the investment meets the conditions for holding for sale;
investment in associates and joint ventures is accounted for using the equity method.
For long-term equity investments that are accounted for using the cost method, in addition to the cash dividends or profits that
have been declared but not yet included in the actual payment or consideration included in the investment, the cash dividends or
profits declared by the invested entity are recognized as investment income and recorded into the current profit and loss.
For long-term equity investments accounted for using the equity method, where the initial investment cost is greater than the fair
value share of the investee’s identifiable net assets at the time of investment, the investment cost of the long-term equity
investment is not adjusted; when the initial investment cost is less than the investment, the investee ’s If the fair value share of net
assets is identified, the book value of the long-term equity investment is adjusted, and the difference is included in the current
profit and loss of the investment.
When using the equity method of accounting, the investment income and other comprehensive income are recognized separately
according to the share of net profit and loss and other comprehensive income realized by the invested unit that should be enjoyed
or shared, and the book value of the long-term equity investment is adjusted at the same time; The distribution of profits or cash
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dividends should be calculated to reduce the book value of long-term equity investment; the investee's other changes in owner's
equity other than net profit and loss, other comprehensive income and profit distribution, adjust the book value of long-term equity
investment and Included in capital reserves (other capital reserves). When confirming the share of the investee’s net profit or loss,
based on the fair value of the investee’s identifiable assets at the time of investment, and in accordance with the Company’s
accounting policies and accounting period, the net profit of the investee Confirm after making adjustments.
If the additional investment and other reasons can exert significant influence on the investee or exercise joint control but do not
constitute control, on the conversion date, the sum of the fair value of the original equity plus the additional investment cost will
be used as the initial accounting for the equity method cost of investment. If the original equity is classified as non-trading equity
instrument investment measured at fair value whose changes are included in other comprehensive income, the relevant original
and accumulative changes in fair value included in other comprehensive income shall be transferred to retained earnings when
accounting by equity method.
If the joint control or significant influence on the invested unit is lost due to the disposal of part of the equity investment, etc., the
remaining equity after the disposal shall be changed to the Accounting Standards for Business Enterprises No. 22-Recognition and
Measurement of Financial Instruments is performed, and the difference between fair value and book value is included in the
current profit and loss. Other comprehensive income recognized by the original equity investment due to the equity method of
accounting shall be accounted for on the same basis as the investee’s direct disposal of related assets or liabilities when the equity
method of accounting is terminated; changes in other owners ’equity related to the original equity investment Transfer to current
profit and loss.
If the control of the invested unit is lost due to the disposal of part of the equity investment, if the remaining equity after the
disposal can exercise joint control or exert significant influence on the invested unit, the equity method is used for accounting and
the remaining equity is treated as When acquiring, the equity method is adopted for adjustment; if the remaining equity after
disposal cannot exercise joint control or exert significant influence on the investee, the accounting shall be changed according to
the relevant provisions of "Accounting Standards for Business Enterprises No. 22-Recognition and Measurement of Financial
Instruments The difference between the fair value and the book value on the date of loss of control is included in the current profit
and loss.
If the shareholding ratio of the company decreases due to the capital increase of other investors, thereby losing control but being
able to exercise joint control or exert significant influence on the investee, the new shareholding ratio shall be used to confirm that
the company should enjoy the capital increase of the investee. The difference between the increase in share and the increase in the
share of net assets and the original book value of the long-term equity investment corresponding to the decrease in the proportion
of the shareholding that should be carried forward are included in the current profit and loss; That is, adjustments are made using
the equity method of accounting.
The unrealized internal transaction gains and losses that occur between the Company and associates and joint ventures are
calculated according to the shareholding ratio and are attributed to the Company, and the investment gains and losses are
recognized on the basis of offset. However, the unrealized internal transaction losses incurred by the Company and the investee are
the impairment losses of the transferred assets and shall not be offset.
(3) Determine the basis for joint control and significant influence on the invested unit
Joint control refers to the common control of an arrangement in accordance with the relevant agreement, and related activities of
the arrangement must be agreed upon by the parties sharing control rights before they can make decisions. When judging whether
there is joint control, first determine whether all participants or a combination of participants collectively control the arrangement,
and secondly determine whether the decision-making related activities of the arrangement must be unanimously agreed by the
participants who collectively control the arrangement. If all participants or a Company of participants must act in concert to
determine the relevant activities of an arrangement, it is considered that all participants or a Company of participants collectively
control the arrangement; if there is a combination of two or more participants can collectively Controlling an arrangement does not
constitute joint control. When judging whether there is joint control, the protective rights enjoyed are not considered.
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Significant influence means that the investor has the right to participate in the decision-making of the financial and operating
policies of the invested unit, but cannot control or jointly control the formulation of these policies with other parties. When
determining whether it can exert significant influence on the invested unit, consider that the investor directly or indirectly holds the
voting shares of the invested unit and the current executable potential voting rights held by the investor and other parties are
assumed to be converted into the invested unit After the equity of the company, the impact includes the current convertible
warrants, stock options and convertible corporate bonds issued by the investee.
When the Company directly or indirectly owns more than 20% (including 20%) but less than 50% of the voting shares of the
invested unit, it is generally considered to have a significant impact on the invested unit, unless there is clear evidence that such
circumstances cannot participate in the production and operation decisions of the invested unit, and does not have a significant
impact; when the Company owns less than 20% (excluding) voting rights of the invested unit, it generally does not consider it to
have a significant impact on the invested unit unless there is clear evidence that Under these circumstances, it can participate in the
production and operation decisions of the invested unit and have a significant impact.
(4) Impairment test method and impairment provision method
For the investments in subsidiaries, associates and joint ventures, the method of accruing asset impairment is shown in the Note V-
22.
15. Investment Property
Measurement model of investment real estate
Costing method measurement
Depreciation or amortization method
The investment real estate refers to the real estate gaining the rent or capital appreciation or both. It includes rented land use right,
holding land use right to be transferred after the appreciation and rented building, etc.
The investment real estate is measured initially according to the cost and withdrawn depreciation or amortization as regulations of
fixed assets or intangible assets.
The Company adopts the cost mode to conduct the subsequent measurement on the investment real estate, see the Note V-22 for
the method of withdrawing asset impairment provision.
The difference between the disposal income of investment real estate sales, transfer, scrap or damage after deducting its book
value and related taxes is included in the current profit and loss.
16. Fixed Assets
(1) Conditions for Recognition
The term “fixed assets” refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for the
sake of producing commodities, rendering labor service, renting or business management; and (b) their useful life is in excess of
one fiscal year.
The fixed assets are only recognized when the relevant economic benefits probably flow in the Company and its cost could be
reliable measured.
The fixed assets of the Company are initially measured at the actual cost at the time of acquisition.
The subsequent expenditures related to the fixed assets shall be included in the cost of the fixed assets when the economic benefits
related to the fixed assets are likely to flow into the Company and the costs can be measured reliably. The daily repair expenses of
fixed assets that do not meet the conditions of capitalized subsequent expenditures of fixed assets shall be included in the current
profit and loss or the cost of relevant assets according to the beneficiaries when incurred. The book value of the replaced part shall
be terminated.
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(2) Depreciation Methods
Category of fixed Annual deprecation
Method Useful life Salvage value (%)
assets (%)
Average method of
Housing and building 5-30 0-10 20.00-3.00
useful life
Average method of
Machinery equipments 10-18 0-10 10.00-5.00
useful life
Average method of
Transportation vehicle 5 0-10 20.00-18.00
useful life
Electronic equipments Average method of
5 0-10 20.00-18.00
and others useful life
(3) Recognition Basis, Pricing and Depreciation Method of Fixed Asset under Finance Lease
See the Note V-22 for details.
(4) At the end of each year, review is carried out by the Company for the service life, estimated net
residual value and depreciation method of fixed assets.
If there is any difference between the expected service life and the original estimated service life, the service life of fixed assets
will be adjusted; if there is any difference between the expected net residual value and the original estimated net residual value, the
expected net residual value will be adjusted
(5) Disposal of Fixed Assets
A fixed asset shall be derecognized when it is disposed of or it is expected that no economic benefit can be generated by using or
disposing of it. The amount of the disposal income of sales, transfer, scrap or damage of the fixed asset after deducting its book
value and related taxes is included in the current profit and loss.
17. Construction in Progress
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.
Construction in process is transferred to fixed assets when the assets are ready for their intended use.
See the details of the impairment provision withdrawal method of the construction in progress to Notes V-22.
18. Engineering Materials
Engineering materials of the Company refer to various materials prepared for projects under construction, including engineering
materials, equipment not yet installed, tools and instruments prepared for production, etc.
The purchased engineering materials will be measured according to the cost. The received engineering materials will be transferred
to the project under construction, and the remaining engineering materials after the completion of the project will be stored as
inventory.
Please refer to Note V (22) for the method of provision for impairment of assets for engineering materials.
In the balance sheet, the ending balance of engineering materials is listed in the "project under construction" item.
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19. Borrowing Costs
(1) Confirmation principle of Capitalized Borrowing Expense
The borrowing expenses incurred by the Company, if can directly belong to acquisition, construction or production of assets meeting
capitalization conditions, are capitalized and included in relevant asset cost; other borrowing expenses are confirmed as expense
according to its amount at the time of occurrence and included in the current profits and losses. If the borrowing expenses meet the
following conditions, capitalization starts:
①Assets expenditure has occurred, and asset expenditure includes the expenditure occurring in the form of payment in cash,
transferring noncash asset or assuming interest bearing debt for acquiring, constructing or producing the assets meeting capitalization
conditions;
② Borrowing expenses have occurred;
③The acquisition, construction or production activities required for making assets usable or saleable as intended have started.
(2) Capitalization period of borrowing expenses
When the Company acquires, constructs or produces assets, which meet capitalization conditions and reach the intended usable or
saleable status, the borrowing expenses stop capitalization. The borrowing expenses that occur after the assets meeting capitalization
conditions reach the intended usable or saleable status are confirmed as expenses according to its amount at the time of occurrence
and are included in the current profits and losses.
If the assets meeting capital conditions generate improper interruption in the course of acquisition, construction or production, and
the interruption time continuously exceeds three months, capitalization of borrowing expenses suspends; the borrowing expenses in
the normal interruption period are continually capitalized.
(3) Capitalization rate of borrowing expenses and calculation method of capitalized amount
The interest expenses of special borrowing actually occurring in the current period, minus the interest income of the unused borrowed
capital obtained from depositing in bank or the gain on temporary investment, are capitalized; for common borrowing, the weighted
average of asset expenditure of the part that the cumulative asset expenditure exceeds special borrowing is multiplied by the
capitalization rate of the occupied common borrowing to determine capitalization amount. Capitalization rate is calculated and
determined according to the weighted average rate of common borrowing. In the period of capitalization, the exchange difference of
special borrowing in foreign currency is fully capitalized; the exchange difference of special borrowing in foreign currency is
included in the current profits and losses.
20. Intangible Assets
(1) Service life and its basis for determination, estimate, amortization method or review procedure
The intangible assets of the Company include land use right, patent right, etc.
Intangible assets are initially measured at cost, and their service life is analyzed and determined when intangible assets are
acquired. If the service life of intangible assets is limited, the intangible assets shall be amortized by the method that can reflect the
expected realization method of the economic benefits related to the assets within the expected service life since they are available
for use. The straight-line method shall be used for amortization if no expected realization method can be determined reliably.
Intangible assets with uncertain service life shall not be amortized.
The amortization method of intangible assets with limited service life is as follows:
Amortization
Category Service life Note
method
Land use right Stipulated in the land certificate Method of line
Patent use right 10 years Method of line
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Software use right 1-3 years Method of line
Brand use right 10 years Method of line
At the end of each year, the Company reviews the service life and amortization method of intangible assets with limited service
life. If the estimate is different from the previous one, the original estimate shall be adjusted and treated as per accounting estimate
change.
If it is estimated that an intangible asset can no longer bring future economic benefits to the enterprise on the date of balance sheet,
this carrying amount of the intangible asset shall be transferred into the current profit and loss.
The method of withdrawing impairment on intangible assets was stated in the Note V-22.
21. Research and Development Expenditures
The Company's R&D expenditure relates directly to R&D activities, including R&D personnel's employee remuneration, direct
input expenses, depreciation expenses and long-term amortization expenses, design expenses, equipment commissioning expenses,
amortization expenses of intangible assets, commissioned external research and development expenses, and other expenses, etc.
The wages of R&D personnel are allocated to R&D expenditure based on project hours. R&D activities that share equipment,
production lines, or sites with other production and operational activities are allocated to R&D expenditure based on the
proportion of hours or area used.
The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures and
development expenditures.
The research expenditures shall be recorded into the profit or loss for the current period.
The development expenditures can be capitalized only when they satisfy the following conditions simultaneously: 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; ⑤
The development expenditures of the intangible assets can be reliably measured. The development expenditures shall be recorded
into profit or loss for the current period when they don’t satisfy the following conditions.
The research and development project of the Company will enter the development stage after meeting the above conditions and the
project is approved and initiated through technical feasibility and economic feasibility study.
The capitalized expenditure in the development stage is listed as expenditure for development on the balance sheet, and it will be
transferred to intangible assets from the date when the project reaches the intended purpose.
22. Impairment of Long-term Assets
For long term equity investment in subsidiaries, associated enterprises and joint ventures, investment real estate which follow-up
measurement is carried out by cost pattern, fixed assets, construction in progress, right-of-use assets, intangible assets, business
reputation, etc. (excluding inventory, investment property measured at fair value pattern, deferred income tax assets, financial assets),
the impairment of assets shall be determined according to the following methods:
On the date of the balance sheet, determination shall be made to see whether there is any sign of possible impairment of assets. If
there is, the Company will estimate its recoverable amount and conduct impairment test. For goodwill, intangible assets with
uncertain service life and intangible assets that have not reached the serviceable state due to business merger, impairment test shall be
carried out every year regardless of whether there is any sign of impairment.
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The recoverable amount is determined according to the net amount of the fair value of the asset minus the disposal expenses and the
present value of the expected future cash flow of the asset, the higher amount shall be prevail. The Company estimates the
recoverable amount on the basis of a single asset. If it is difficult to estimate the recoverable amount of a single asset, the recoverable
amount of the asset group shall be determined based on the asset group to which the asset belongs. The asset group is determined on
the basis of whether the main cash inflow generated by the asset group is independent of the cash inflow of other assets or asset
groups.
When the recoverable amount of an asset or asset group is lower than its carrying amount, the group will write down its carrying
amount to the recoverable amount, and the written down amount will be included in the current profit and loss, and the corresponding
asset impairment reserve will be accrued.
Regarding the impairment test of business reputation, the carrying amount of business reputation formed by business merger shall be
apportioned to the relevant asset group in a reasonable way from the date of purchase. If it is difficult to apportion to the relevant
asset group, it shall be apportioned to the relevant combination of asset group. The relevant asset group or combination of asset
groups is the one that can benefit from the synergy effect of business merger, and is the one smaller than the reportable segment
determined by the Company.
In the impairment test, if there is any sign of impairment in the asset group or combination of asset groups related to business
reputation, first, impairment test shall be carried out on the asset group or combination of asset groups not containing business
reputation, to calculate the recoverable amount and recognize the corresponding impairment loss. Then impairment test shall be
carried out on the asset group or combination of asset group containing business reputation to compare the carrying amount with the
recoverable amount. If the recoverable amount is lower than the carrying amount, the impairment loss of business reputation shall be
recognized.
Once the impairment loss of assets is recognized, it will not be reversed in the future accounting period.
23. Long-term Deferred Expenses
The long-term expenses to be amortized incurred by the Company are valued at the actual cost and amortized averagely according
to the expected benefit period. For long-term expenses to be amortized, the amortized value that cannot benefit the future
accounting period shall be included in the current profit and loss.
24. Payroll
(1) Accounting Treatment of Short-term Compensation
During the accounting period in which employees provide services, the Company recognizes the actual employee wages, bonuses,
social insurance premiums such as medical insurance premiums, industrial injury insurance premiums, and maternity insurance
premiums and housing provident funds paid to employees according to the prescribed standards and proportions as liabilities and
included them in the current profit and loss or related asset costs.
(2) Accounting Treatment of the Welfare after Departure
The post-employment benefit plan includes a defined contribution plan and a defined benefit plan. Among them, the defined
contribution plan refers to the post-employment benefit plan that the enterprise no longer assumes further payment obligations after
the fixed fund has paid a fixed fee; the defined benefit plan refers to the post-employment benefit plan other than the established
contribution plan.
Set withdrawal plan
The set contribution plan includes basic pension insurance and unemployment insurance.
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During the accounting period in which employees provide services, the amount of deposit payable calculated according to the set
withdrawal plan is recognized as a liability and included in the current profit and loss or related asset costs.
(3) Accounting Treatment of the Demission Welfare
The Company relieves the labor relation with the employees before the due date of the labor contacts or puts forward the advice of
providing the compensation for urging the employees volunteered to receive the downsizing and when the Company could not
unilaterally withdraw the demission welfare owning to the relieving plan of the labor relation or the downsizing advice, should
confirm the liabilities of the employees’ salary from the demission welfare on the earlier day between the cost confirmed by the
Company and the cost related to the reorganization of the payment of the demission welfare and includes which in the current gains
and losses.
(4) Accounting Treatment of the Welfare of Other Long-term Staffs
Other long-term employee benefits provided by the Company to employees that meet the conditions of defined contribution plans
shall be handled in accordance with the above-mentioned relevant provisions on defined contribution plans. Those in line with the
defined benefit plan shall be handled in accordance with the above-mentioned relevant provisions on the defined benefit plan.
However, the part of "changes caused by remeasuring the net liabilities or net assets of the defined benefit plan" in the salary cost
of relevant employees shall be included in the current profit and loss or the relevant asset cost.
25. Provisions
If the obligation related to contingency meets the following conditions at the same time, the Company will recognize it as a
provision.
(1) The obligation is the current obligation assumed by the Company;
(2) The performance of the obligation is likely to cause an outflow of economic benefits of the Company;
(3) The amount of the obligation can be measured reliably.
The provisions are initially measured in accordance with the optimal estimate of the necessary expenditures for the fulfillment of
the current obligation, with factors such as risks, uncertainty and the time value of money related to contingencies taken into
consideration comprehensively. Where the time value of money has a significant impact, the best estimate is determined by
discounting the relevant future cash outflow. The Company re-checks the book value of the provisions on the balance sheet date
and adjusts the book value to reflect the current best estimate.
If all or part of the expenditure required to settle recognized provisions is expected to be compensated by a third party or other
parties, the amount of compensation shall be recognized separately as an asset only when it is substantially certain that it will be
received. The recognized amount of compensation shall not exceed the book value of the recognized liabilities.
26. Share-based Payments and Equity Instruments
(1) Category of share-based payment
The share-based payments of the Company are divided into equity-settled share payments and cash-settled share payments.
(2) Method of determining the fair value of equity instruments
The Company shall determine the fair value of equity instruments such as options granted in active markets according to the
quotations in active markets. For granted equity instruments such as options without active markets, the fair value is determined by
option pricing model. The following factors shall be considered for the selected option pricing model: A. Exercise price of the
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option; B. Expiration date of the option; C. Current price of the object shares; D. Expected fluctuation rate of stock price; E.
Estimated dividends of shares; F. Risk-free interest rate within the option term.
(3) Ground for recognizing the optimal estimation of feasible right equity instruments
On each balance sheet date during the waiting period, the Company shall make the optimal estimate based on subsequent
information such as the latest change in the number of employees with feasible rights, and revise the number of equity instruments
for the estimated feasible rights. On the feasible right date, the final estimated number of feasible right equity instruments shall be
the same as the actual number of feasible rights.
(4) Relevant accounting treatment for implementing, modifying and terminating share-based payment plan
Equity-settled share-based payments shall be measured at the fair value of the equity instruments granted to employees. Where the
right is exercised immediately after the grant, relevant costs or fees shall be included in accordance with the fair value of the
equity instruments on the grant date to accordingly increase the capital reserve. Where the right is exercised upon the completion
of the services during the waiting period or the achievement of the specified result conditions, the services obtained in the current
period shall be included in the relevant costs or fees and the capital reserve according to the fair value of the equity instruments on
the grant date based on the optimal estimate of the number of feasible right equity instruments on each balance sheet date during
the waiting period. The recognized related costs or fees and total owner's equity after the feasible right date shall not be adjusted
any more.
When the Company modifies a share-based payment plan, if the modification increases the fair value of the equity instruments
granted, the increase in the services acquired shall be recognized accordingly according to the increase in the fair value of the
equity instruments; if the modification increases the number of equity instruments granted, the fair value of the increased equity
instruments shall be recognized accordingly as the increase in the services acquired. The increase in the fair value of the equity
instruments refers to the difference between the fair values of the equity instruments before and after the modification on the
modification date. If the modification reduces the total fair value of the share-based payment or any other method not conducive to
the employees is adopted to modify the terms and conditions of the share-based payment plan, the accounting treatment of the
services acquired would continue, as if such change had never occurred, unless the Company cancels some or all of the granted
equity instruments.
During the waiting period, if the granted equity instrument is canceled (Excluding those cancelled due to failure to meet non-
market-based vesting conditions, such as service conditions or non-market-based performance conditions.), the Company shall
treat the canceled equity instrument as an accelerated exercise, immediately include the left amount to be recognized during the
waiting period in the current profit and loss, and recognize the capital reserve at the same time. Where the employee or other party
can choose to meet the non-feasible right condition but fails during the waiting period, it shall be treated as the cancellation of the
granted equity instrument.
(5) Restricted Shares
In the equity incentive plan, the Company grants restricted stocks to the incentive personnel, who firstly subscribe the stocks. If
the unlocking conditions specified in the equity incentive plan are not met, the Company will repurchase the stocks at the
previously agreed price. Where the restricted stocks issued to the employees has gone through capital increase procedures such as
registration in accordance with relevant provisions, the Company shall, on the grant date, recognize the share capital and the
capital reserve in conformity with the subscription payment received from the employees. Meanwhile, it shall recognize the
treasury stocks and other payables with respect to repurchase obligations.
27. Revenue
Accounting policies adopted for the recognition and measurement of revenue disclosed by type of business
(1) General principle
The Company recognizes revenue when it has fulfilled its contract performance obligation in a contract, namely, when the customer
obtains the control over the related commodity or service.
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If a contract contains two or more performance obligations, the Company allocates transaction price to single performance
obligations on the contract commencement date according to the relative ratio of separate price of goods or services committed by
single performance obligation, and income is measured according to the transaction price allocated to single performance obligation.
When meeting one of the following conditions, the Company belongs to performance of contract performing obligations in a period,
or otherwise, the Company belongs to performance of contract performing obligations at a point of time:
①While the Company is performing the contract, the customer acquires and consumes the economic benefit arising from
performance by the Company.
②The customer can control the goods in construction in the course of performance by the Company.
③The goods outputted in the course of performance by the Company have irreplaceable purpose, and the Company has the right to
collection of money for the completed performance part cumulative up to now in the whole term of contract.
For the performance obligation performed in a period, the Company confirms income according to the performance progress in such
period. When the performance progress cannot be reasonably determined, if the cost that the Company has incurred is expected to be
compensated, income is confirmed according to the cost amount that has occurred, until the performance progress can be reasonably
determined.
For the performance obligation performed at a point of time, income is confirmed at the point of time when the customer acquires the
control right to relevant goods or services. When it judges whether the customer has acquired the control right to the goods or
services, the Company will consider the following indications:
①The Company enjoys the current collection right to the goods or services, i.e. the customer undertakes current payment obligation
to the goods.
②The Company has transferred the legal ownership of the goods to the customer, that is, the customer has owned the legal
ownership of the goods.
③The Company has transferred the kind of the goods to the customer, namely, the customer has possessed the good in kind.
④The Company has transferred the major risks and remuneration on the ownership of the goods, i.e. the customer has acquired the
major risks and remuneration on the ownership of the goods.
⑤The customer has accepted the goods or services.
⑥Other indications showing that the customer has acquired the control right to the goods.
The Company has transferred goods or services and has the right to collect consideration (and the right depends on factors other than
time elapse) as contract assets, and contract asset is accrued impairment on the basis of expected credit loss (refer to Note V-11. The
right of the Company, unconditionally (only depending on time elapse) charging consideration from the customer, is listed as
receivable. The obligation of the Company that shall transfer goods or services to the customer for the consideration that has been or
shall be collected is liability to the contract.
The contract assets and contract liabilities under the same contract are listed in net amount. If net amount is debit balance, it is listed
in the items “contract asset” or “other non-current asset” according to its fluidity; if net amount is credit balance, it is listed in the
items “contract liability” or “other non-current liability” according to its fluidity.
(2) Specific methods
The specific income confirming methods of the Company are following:
For income of domestic products, after the Company delivers products to the purchaser according to the provisions of the contract
and the purchaser confirms receipt, the purchaser acquires the control right of products, and the Company confirms income.
For income of exportable products, after the Company completes customs declaration of products, departure and obtains bill of
lading according to the provisions of the contract, the purchaser acquires the control right of products, and the Company confirms
income.
Differences in methods for the recognition and measurement of revenue caused by different business models for the same type of
business
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28. Contract Costs
Contract cost includes the incremental cost incurred for acquiring contract and contract performance cost.
The incremental cost incurred for acquiring contract refers to the cost that will not occur if the Company has not acquired contract
(for example, sales commission). If the cost is expected to be recovered, the Company regards it as contract acquiring cost and
confirms it as an asset. The expenses incurred by the Company for acquiring contract, other than the incremental cost expected to
be recovered, are included in the current profits and losses at the time of occurrence.
If the cost incurred for performance of contract does not belong to inventory and other scope of other corporate accounting
standards and meets the following conditions, the Company will regard it as contract performance cost and confirm it as an asset:
①The cost is directly related to a copy of contract currently acquired or expected to be acquired, including direct labor, direct
materials, manufacture expenses (or similar expenses), cost determined to be undertaken by the customer and other cost incurred
due to the contract;
②The cost increases the resources of the Company that will be used for performance of contract obligations in the future;
③The cost is expected to be recovered.
The assets confirmed by the contract acquiring cost and the assets confirmed by the contract performance cost (“assets related to
contract cost”) are amortized according to the same basis as confirmation of goods or service income related to the asset and are
included in the current profits and losses. If the amortization term does not exceed one year, it will be included in the current
profits and losses at the time of occurrence.
When the book value of an asset related to contract cost is higher than the difference between the following two items, the
Company accrues provision for impairment to the excessive part and confirms it as impairment loss:
①The remaining consideration that the Company expects to acquire from transfer of goods or services related to the asset;
②The cost that will occur for transfer of such related goods or services as estimated.
29. Government Grants
Government grants are recognized when they meet the conditions attached to government grants and when they can be received.
Government grants for monetary assets shall be measured according to the amount received or receivable. Government grants for
non-monetary assets shall be measured by fair value.
Asset related government grants refer to the government grants obtained by the Company for acquisition and construction or other
forms of long-term assets. In addition, they are government grants related to income.
Regarding the government grants that the government document does not specify the object of subsidy and can form long-term
assets, the part of government subsidy corresponding to the asset value shall be regarded as the asset-related government subsidy
and the rest shall be regarded as income-related government subsidy. If it is difficult to distinguish, the government subsidy shall
be regarded as the income-related government subsidy.
The government grants related to assets shall be recognized as the deferred income, which shall be included in the profit and loss
in installment in a reasonable and systematic way within the service life of the relevant assets. Income-related government grants
which are used to compensate the relevant costs or losses incurred shall be included in the current profit and loss. Those used to
compensate the relevant costs or losses in the later period shall be included in the deferred income, and shall be included in the
current profit and loss during the recognition period of the relevant costs or losses. The government grants measured according to
the nominal amount shall be directly included in the current profit and loss. The same method is adopted for the same or similar
government subsidy businesses of the Company.
Government grants related to daily activities shall be included in other incomes according to the essence of business transactions.
Government grants irrelevant to daily activities are included in non-business income.
When the recognized government grants need to be returned, and are used to offset the carrying value of related assets when
initially recognized, the carrying value of the assets shall be adjusted; the book balance of relevant deferred income shall be offset
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Lu Thai Textile Co., Ltd. Interim Report 2024
if there is a balance of relevant deferred income, and the excess part shall be included in the current profit and loss. Otherwise, it
shall be directly included in the current profit and loss.
Regarding the interest subsidy of the policy preferential loan obtained, if the Ministry of Finance allocates the interest subsidy to
the loan bank, the actual received loan amount shall be taken as the entry value of the loan, and the loan cost shall be calculated
according to the loan principal and the policy preferential interest rate. If the Ministry of Finance allocates the interest subsidy
directly to the Company, the interest subsidy will offset the borrowing costs.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
Income tax includes current income tax and deferred income tax. All shall be included in the current profit and loss as income tax
expense except the adjustment business reputation arising from business merger, or the deferred income tax related to the
transactions or events directly included in the owner's equity is included in the owner's equity.
Pursuant to the temporary difference between the carrying amount of assets and liabilities on the date of balance sheet and the tax
basis, the Company recognizes the deferred income tax by balance sheet liability method.
For all taxable temporary differences, related deferred income tax liabilities are recognized, unless the taxable temporary
differences are generated in the following transactions:
(1) The initial recognition of business reputation or the initial recognition of assets or liabilities arising from transactions with the
following characteristics: The transaction is not a business merger, and does not affect the accounting profit or taxable income
when it occurs (Excluding transactions that initially recognised assets and liabilities resulting in equal taxable temporary
differences and deductible temporary differences.);
(2) Regarding the taxable temporary difference related to the investment of subsidiaries, joint ventures and associated enterprises,
the time of reversal of the temporary difference can be controlled and the temporary difference is unlikely to be reversed in the
foreseeable future.
For deductible temporary differences, deductible losses and tax credits that can be carried forward in subsequent years, the
Company is likely to obtain the future taxable income as the limit to offset the deductible temporary differences, deductible losses
and tax credits, in which way to recognize the deferred income tax assets arising from the deductible temporary differences,
deductible losses and tax credits, unless the deductible temporary differences are generated in the following transactions:
(1) The transaction is not a business merger, and does not affect the accounting profit nor taxable income when it occurs
(Excluding transactions that initially recognised assets and liabilities resulting in equal taxable temporary differences and
deductible temporary differences.);
(2) The corresponding deferred income tax assets shall be recognized if the deductible temporary differences related to the
investment of subsidiaries, joint ventures and associated enterprises meet the following conditions simultaneously: The temporary
differences are likely to be reversed in the foreseeable future, and the taxable income used to deduct the deductible temporary
differences is likely to be obtained in the future.
On the date of the balance sheet, the income tax assets and deferred income tax liabilities shall be measured by the Company on
the basis of the applicable tax rate during the period when the assets are expected to be recovered or the liabilities are expected to
be paid off, and the income tax impact on the expected recovery of assets on the date of the balance sheet or on the method to pay
off the liabilities shall be reflected.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtain sufficient
taxable income to offset against the benefit of the deferred income tax asset, the book value of the deferred income tax assets shall
be written down. Any such write-down should be subsequently reversed where it becomes probable that sufficient taxable income
will be available.
As at the balance sheet date, deferred income tax assets and deferred income tax liabilities are presented as a net amount when the
following conditions are simultaneously met:
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Lu Thai Textile Co., Ltd. Interim Report 2024
(1) The tax entity within the Company has a legally enforceable right to set off current income tax assets against current income
tax liabilities;
(2) The deferred income tax assets and deferred income tax liabilities are related to income taxes levied by the same taxation
authority on the same taxable entity within the Company.
31. Lease
(1) Identification of lease
On the start date of the contract, the Company assessed as the lessee or the lessor whether the customers in the contract are entitled
to obtain almost all the economic benefits arising from the use of the identified assets during the use period, and have the right to
dominate the use of the identified assets during the use period. If a party to the contract transferred the right allowing the control
over the use of one or more assets that have been identified within a certain period, in exchange for a consideration, such contract
is determined by the Company to be a lease or includes a lease.
(2) As the lessee
On the commencement date of the lease term, the Company recognizes the right-of-use assets and lease liabilities for all leases,
except for short-term leases and low-value asset leases with simplified treatment.
For accounting policies for the right-of-use assets, see Note V-32.
Lease liabilities are initially measured in line with the lease payments not yet paid on the commencement date of the lease term using
the present value calculated by the interest rate implicit in lease. If the interest rate implicit in lease cannot be determined, the
incremental borrowing rate shall be used as the discount rate. Lease payments include: Fixed payment and substantial fixed payment,
and the relevant amount after deducting the lease incentive if any; variable lease payments depending on index or ratio; exercise price
of the purchased option, provided that the lessee reasonably determines that the option will be exercised; the amount to be paid for
the exercise of the lease termination options, provided that the lease term reflects that the lessee will exercise the options to terminate
the lease; and estimated payments due to the guaranteed residual value provided by the lessee. Subsequently, it calculates the interest
expenses of the lease liabilities during each period of the lease term at a fixed periodic interest rate, and includes them in current
profit and loss. Variable lease payments that are not covered in the measurement of the lease liabilities are included in current profit
or loss when actually incurred.
Short-term lease
A short-term lease refers to a lease for a period not exceeding 12 months on the commencement date of the lease, except for leases
with a purchase option.
The Company includes the short-term lease payment in the cost of relevant assets or the current profit and loss in each period of the
lease term by the straight-line method.
Low-value asset lease
A low-value asset lease refers to a lease where the value is lower than RMB40,000 and a single leased asset is a new asset.
The Company includes the lease payment of the low-value asset lease in the cost of relevant assets or the current profit and loss in
each period of the lease term by the straight-line method.
For low-value asset lease, it chooses to adopt the aforesaid simplified treatment method in line with the specific status of each lease.
Lease change
If a lease changes and meets the following conditions simultaneously, the lease change shall be regarded as a separate lease for
accounting treatment: a) The lease change expands its lease cope by increasing one or multiple use rights of lease assets; and b) The
increased consideration is equivalent to the amount of the separate price for the expanded part of the lease, which is adjusted
according to the contract.
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Where the lease change is not regarded as a separate lease for accounting treatment, on the effective date of the lease change, by the
Company, the consideration of the contract is amortized again upon change, the lease term is redetermined, and the lease liabilities
are remeasured according to the present value that is calculated by the lease payments and the revised discount rate upon change.
The Company shall correspondingly reduce the book value of the right-of-use assets and include the profit or loss of the lease
terminated in part or whole in the current profit or loss, if the lease change narrows the scope of lease or shortens the lease term.
The Company shall correspondingly adjust the book value of the right-of-use assets, if other lease changes result in the re-calculation
of the lease liability.
(3) As the lessor
When the Company is a lessor, it shall recognize leases that substantially transfer all risks and remuneration related to the ownership
of assets as finance leases, and leases other than finance leases as operating leases.
Financial lease
In a finance lease, the Company recognizes the net lease investment as the book value of finance lease receivables on the
commencement date of the lease term. The net lease investment is the sum of the unguaranteed residual value and the present value
of lease receivables not yet received on the commencement date of the lease term at the interest rate implicit in lease. The Company
calculates and confirms the interest income at a fixed periodic interest rate in each period in the lease term. Variable lease payments
obtained that are not included in the net lease investment for measurement, where the Company is the lessor, are included in the
profit or loss of the current period when actually incurred.
Accounting treatment shall be conducted for the derecognition and impairment of finance lease receivables in accordance with the
provisions of the Accounting Standard for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments and
the Accounting Standard for Business Enterprises No.23 - Transfer of Financial Assets.
Operating leases
The Company shall recognize the current profit and loss of the rent of the operating lease in each period of the lease term by the
straight-line method. The initial direct costs related to the operating lease shall be capitalized, amortized within the lease term on the
same basis as the recognition of rental earning, and included in profit or loss for the current period. The received variable lease
payments related to the operating lease that are not included in the lease payments receivable are included in profit or loss for the
current period when they are actually incurred.
Lease change
Where an operating lease changes, the accounting treatment is conducted for it which is regarded as a new lease from the effective
date of the change, and receivables in advance or lease receivables related to lease before change are deemed as the receivables in the
new lease.
Where a finance lease changes and meets the following conditions simultaneously, the change is regarded as a separate lease by the
Company for accounting treatment: a) The change expands its lease cope by increasing one or multiple use rights of lease assets; and
b) The increased consideration is equivalent to the amount of the separate price for the expanded part of the lease, which is adjusted
according to the contract.
Where a finance lease changes and is not regarded as a separate lease for accounting treatment, the Company treats the changed lease
under the following circumstances: a) If the change comes into force on the commencement date of the lease term, the lease will be
clarified as an operating lease, while it will be regarded as a new lease for accounting treatment by the Company on the effective date
of the lease change, and the net lease investment before the effective date of lease change will be regarded as the book value of lease
assets; and b) If the change comes into force on the commencement date of the lease term, the lease will be clarified as a finance
lease, the Company will carry out accounting treatment in accordance with the provisions on modification or renegotiation of a
contract of the Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
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Lu Thai Textile Co., Ltd. Interim Report 2024
32. Right-of-Use Assets
(1) Recognition conditions for right-of-use assets
The term “right-of-use assets” refers to the right of the lessee to use the leased assets during the lease term.
At the start date of the lease term, the Company initially measures the right-of-use assets at cost. The cost includes: the initial
measurement amount of lease obligations; the lease payment amount paid on or prior to the inception of the lease (less the related
amount of lease incentives already enjoyed if any); the initial direct cost incurred by the lessee; and the anticipated cost of
dismantling and removing the leasehold property, restoring the site where the leasehold property is located, or bringing the
leasehold property back to the state agreed upon in the lease terms. As the lessee, the Company shall recognize and measure the
cost of demolition and restoration in accordance with the Accounting Standards for Business Enterprises No.13 - Contingencies.
Subsequent adjustments are made for any re-measurement of the lease liabilities.
(2) Depreciation method of right-of-use assets
The Company uses the straight-line method for depreciation. Where it can be reasonably certain that the Company, the lessee, can
obtain ownership of the leased assets at the expiry of the lease term, the leased assets are depreciated over the residual service life.
Where it cannot be reasonably certain that the Company can obtain ownership of the leased assets at the end of the lease term, the
leased assets are depreciated at the shorter of the lease term and the residual service life of the leased assets.
(3) Impairment test method and impairment provision method of right-of-use assets See Note V-22.
33. Cost of Safety Production and Maintenance
In accordance with the regulations of the Notice on Issuing the Management Measures for the Provision and Use of Enterprise
Production Safety Costs (C.Z. [2022] No. 136) issued by the Ministry of Finance and the Ministry of Emergency, and based on the
above actual annual operating revenue of power generation and supply enterprises, the Company adopts the method where the
deduction rate declines when the operating revenue increases to deduct safety production costs according to the following
standards:
Annual actual sales revenue standard Proportion of safety production cost (%)
Not exceeding RMB10 million 3
RMB10 million to RMB100 million 1.5
RMB100 million to RMB1 billion 1
RMB1 billion to RMB5 billion 0.8
Safety production costs and costs for sustaining simple reproduction are included in the cost of relevant production or current loss
and profit when deducted, and are simultaneously included in the “specific reserve”.
When using the deducted safety production costs and the costs for sustaining simple reproduction in conformity with regulations,
the outgoing expenditures shall directly be used to offset the specific reserve; the costs becoming fixed assets shall be aggregated
under “construction in progress” and then be recognized as fixed assets when the safety project is completed and reaches the
intended available status; The aforesaid fixed assets will not be depreciated as accrued in the future period.
34. Repurchase of Shares
Before the shares repurchased by the Company are cancelled or transferred, they are managed as treasury shares, and all
expenditures for the repurchase of shares are transferred to the cost of treasury shares. Consideration and transaction costs paid in
share repurchase reduce shareholders' equity. When buying back, transferring or cancelling shares in the Company, no profits or
losses are recognized.
The transfer of inventory shares shall be credited to the capital reserve on the basis of the difference between the amount actually
received and the carrying amount of the treasury stock. Write off surplus reserves and undistributed profits if capital reserves are
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Lu Thai Textile Co., Ltd. Interim Report 2024
insufficient to offset. Write-off of treasury stocks can reduce shares in par with par value and number of write-out stocks. The
capital reserve is offset based on the difference between book balance and face value of cancelled treasury stocks. Write off
surplus reserves and undistributed profits if capital reserves are insufficient to offset.
35. Material Accounting Judgments and Estimates
The Company evaluates the important accounting estimates and key assumptions adopted on an ongoing basis, based on historical
experience and other factors, including reasonable expectations of future events. Important accounting estimates and critical
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the
next fiscal year are listed as follows:
Classification of financial assets
The significant judgments involved when the Company determines the classification of financial assets include analysis of
business models and contractual cash flow characteristics. The Company determines the business model for managing financial
assets at the level of the financial asset portfolio, taking into account factors such as the approach of evaluating and reporting the
performance of financial assets to key management personnel, the risks affecting the performance of financial assets and the
manner in which they are managed, and way in which the relevant business management personnel are compensated.
The following main judgments exist in assessing whether the contractual cash flows of financial assets are consistent with the
basic lending arrangements:
Whether the time distribution or amount of the principal amount during the duration may change due to early repayment or for
other reasons; whether the interest includes only the time value of money, credit risk, other basic lending risks and consideration
against costs and profits. For example, whether the amount of early repayment reflects only the outstanding principal and interest
based on the outstanding principal, as well as reasonable compensation paid for early termination of the contract.
Measurement of expected credit losses of accounts receivable
The Company calculates the expected credit loss of accounts receivable using the exposure to default risk of accounts receivable
and the expected credit loss ratio, and determines the expected credit loss ratio based on the probability of default and the default
loss ratio. When determining the expected credit loss ratio, the Company uses data such as internal historical credit loss experience
and adjusts historical data to take into account current conditions and forward-looking information. When considering forward-
looking information, the Company uses indicators such as the risk of economic downturn and changes in the external market
environment, technological environment and customer profile. The Company regularly monitors and reviews the assumptions
related to the calculation of expected credit losses.
Goodwill impairment
We shall assess whether there is impairment of goodwill at least annually. This requires estimating the use value of the asset group
to which goodwill has been assigned. When estimating the use value, the Company shall estimate the future cash flows from the
asset group and select the appropriate discount rate to calculate the present value of future cash flows at the same time.
Deferred income tax assets
To the extent that it is probable that sufficient taxable profit will be available to offset the losses, the Company recognizes deferred
income tax assets for all unused tax losses. This requires the Company's management to use many judgments to estimate the
timing and amount of future taxable profits, taking into account tax planning strategies, so as to determine the amount of deferred
income tax assets to be recognized.
Determination of fair value of unlisted equity investment
The fair value of unlisted equity investment is the expected future cash flows discounted at the current discount rate for items with
similar terms and risk characteristics. Such valuation requires the Company to estimate expected future cash flows and discount
rates and is therefore subject to uncertainty. Under limited circumstances, if the information used to determine fair value is
insufficient, or if the range of possible estimates of fair value is wide and the cost represents the best estimate of fair value within
that range, the cost may represent its appropriate estimate of fair value within that range of distribution.
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Lu Thai Textile Co., Ltd. Interim Report 2024
36. Changes in Main Accounting Policies and Estimates
(1) Significant Changes in Accounting Policies
□Applicable Not applicable
(2) Significant Changes in Accounting Estimates
□Applicable Not applicable
(3) Adjustments to Financial Statement Items at the Beginning of the Year of the First Implementation of the New
Accounting Standards Implemented since 2024
□Applicable Not applicable
VI Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
Taxable value-added amount (the taxable amount is
calculated by multiplying the taxable sales by the
VAT 13%, 9%, 6%, 5%, 3%, 0
applicable tax rate and deducting the input tax allowed
to be deducted in the current period)
Urban maintenance
Turnover tax actually paid 7%, 5%
and construction tax
Enterprise income
Income tax payable 0, 11%, 15%, 16.5%, 20%, 25%
tax
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Taxpayer Income tax rate
The Company 15%
Lufeng Weaving & Dyeing 15%
Lulian New Materials 15%
Lu Thai Hong Kong 16.50%
Luqun Textile 25%
Xinsheng Power 25%
Shanghai Lu Thai 20%
Shanghai Zhinuo 20%
Lujia Import & Export 20%
Zhishu Consulting 20%
Lu Thai Vocational Training School 0%
Banyang Villa 20%
Huilin International 15%
VACL 11%
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Lu Thai Textile Co., Ltd. Interim Report 2024
2. Tax Preference
In accordance with the Notice for Announcing the First Batch of Hi-tech Enterprise Identification List of Shandong Province in
2023 with reference No. Lu Ke Zi [2024]4, the Company was identified as a hi-tech enterprise, and the certificate issuing date was
29 November 2023; the majority-owned subsidiary LuFeng Company Limited was identified as a hi-tech enterprise, and the
certificate issuing date was 29 November 2023. In accordance with the Notice for Announcing Hi-tech Enterprise List of Shandong
Province in 2022, the majority-owned subsidiary Lulian New Materials was identified as a hi-tech enterprise, and the certificate
issuing date was 12 December 2022. Therefore, in accordance with Article 28 of the Enterprise Income Tax Law of the People’s
Republic of China and the Announcement of the State Administration of Taxation on Issues Concerning the Implementation of
Preferential Income Tax Policies for High-tech Enterprises (Announcement No. 24 [2017] of the State Administration of
Taxation), the applicable enterprise income tax rate shall be 15%.
The wholly-owned subsidiaries, including Shanghai Luthai, Shanghai Zhinuo, Lujia Import & Export, Zhishu Consulting, and
Banyang Villa, have been recognized as small, low-profit enterprises. According to the Announcement of the Ministry of Finance
and the State Taxation Administration on Preferential Income Tax Policies for Small, Low-profit Enterprises and Privately or
Individually-owned Businesses (Announcement No. 6 [2023] of the Ministry of Finance and the State Taxation Administration)
and Announcement of the Ministry of Finance and the State Taxation Administration on Further Implementing the Preferential
Income Tax Policies for Micro and Small Enterprises (Announcement No. 13 [2022] of the Ministry of Finance and the State
Taxation Administration), the portion of the annual taxable income of small, low-profit enterprises not exceeding RMB3 million
shall be included in the taxable income at a reduced rate of 25%, and the enterprise income tax shall be paid at the tax rate of 20%.
The wholly-owned subsidiary, Lu Thai Vocational Training School, has been recognized as a non-profit making organization
exempt from tax between 2021 and 2025. According to Article 26, Item 4 of the Enterprise Income Tax Law of the People’s
Republic of China, the policy whereby eligible non-profit making organizations are exempt from enterprise income tax shall apply
to the foregoing subsidiary.
Lu Thai (Hong Kong) Textile Co., Ltd. (hereinafter refers as Lu Thai (Hong Kong) Textile), the wholly-owned subsidiary of the
Company, was incorporated in Hong Kong SAR, whose profit tax shall be paid at tax rate of 16.5%.
The wholly own subsidiary VACL, according to the Burma’s Special Economic Zone Law issued by Pyidaungsu Hluttaw, VACL
enjoys tax preference on corporate income tax of 7 (7 years tax holiday) + 5 (5 years tax revenues drop by half) + 5 (re-invest the
profits within 1 year and continues to enjoy the half tax revenues 5 years afterwards). After grace period, enterprise income tax
rate was of 22%. Year 2024 is the second year of tax halving period with the enterprise income tax rate at 11%.
The wholly-owned subsidiary, Huilin International, which was registered in the Hainan Free Trade Port and operates in the
encouraged industry, shall pay enterprise income tax at a reduced tax rate of 15% between 1 January 2020 and 31 December 2024,
according to the Announcement of the Ministry of Finance and the State Taxation Administration on the Preferential Income Tax
Policies for Enterprises Registered in the Hainan Free Trade Port (Announcement No. 31 [2020] of the Ministry of Finance and
the State Taxation Administration).
VII. Notes to Main Items of Consolidated Financial Statements
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 6,112,136.39 2,633,018.72
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Lu Thai Textile Co., Ltd. Interim Report 2024
Bank deposits 1,661,897,030.36 1,280,487,534.58
Other monetary funds 2,711,326.78 275,131,494.73
Total 1,670,720,493.53 1,558,252,048.03
Of which: total amount deposited
292,192,477.99 271,126,295.17
overseas
Other notes:
(1) On 30 June 2024, the monetary assets with restricted ownership were of RMB2,459,213.57, which were the deposit for foreign
guarantee business of DONG 5,380,232,505.00 (equivalent to RMB1,509,213.57), and litigation freezes of RMB950,000.
(2) The interest receivable in bank deposits was RMB8,670,454.55.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Financial assets at fair value through profit or loss 741,610,807.34 723,800,275.39
Of which:
Debt instrument investment 303,432,546.27 203,706,725.51
Equity instrument investment 436,877,510.83 509,832,518.35
Derivative financial assets 1,300,750.24 10,261,031.53
Of which:
Total 741,610,807.34 723,800,275.39
3. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 69,855,754.75 99,642,708.67
Trade acceptance 6,303,241.45
Total 76,158,996.20 99,642,708.67
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Bad debt
Carrying amount Bad debt provision Carrying amount
provision
Category Withd Carrying Withdr Carrying
Proport rawal value Proporti Amo awal value
Amount Amount Amount
ion propor on unt propor
tion tion
Of
which:
Notes 76,490,74 100.00 76,158,9 100.00 99,642,7
331,749.55 0.43% 99,642,708.67
receivabl 5.75 % 96.20 % 08.67
112
Lu Thai Textile Co., Ltd. Interim Report 2024
e of bad
debt
provisio
n
withdra
wn by
groups
Of
which:
Trade
6,634,991. 6,303,24
acceptan 8.67% 331,749.55 5.00%
00 1.45
ce
Bank
acceptan
ce bills 69,855,75 91.33 69,855,7 100.00 99,642,7
99,642,708.67
with low 4.75 % 54.75 % 08.67
credit
ratings
76,490,74 100.00 76,158,9 100.00 99,642,7
Total 331,749.55 99,642,708.67
5.75 % 96.20 % 08.67
If adopting the general mode of expected credit loss to withdraw bad debt provision of notes receivable:
□Applicable Not applicable
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning
Category Reversed or Ending balance
balance Withdrawal Verification Others
recovered
Trade
0.00 331,749.55 331,749.55
acceptance
Total 0.00 331,749.55 0.00 0.00 0.00 331,749.55
Of which significant amount of recovered or transferred-back bad debt provision for the current period:
□Applicable Not applicable
(4) Notes Receivable Which Had Endorsed by the Company or had Discounted and had not Due on the
Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 98,285,689.07
Total 98,285,689.07
4. Accounts Receivable
(1) Disclosure by Aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
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Lu Thai Textile Co., Ltd. Interim Report 2024
Within one year (including 1 year) 775,687,291.66 878,555,822.01
One to two years 3,603,815.12 3,129,451.20
Two to three years 542,137.00 143,033.80
More than three years 4,450,803.48 7,777,701.22
Three to four years 43,641.97 3,717,366.06
Four to five years 4,257,186.18 4,037,499.15
Over 5 years 149,975.33 22,836.01
Total 784,284,047.26 889,606,008.23
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Categor Withdra Withdra
y Carrying Carrying
Proporti wal Proporti wal
amount amount value amount amount value
on proporti on proporti
on on
Account
s
receivab
le
withdra
wal of 2,823,30 2,823,30 5,481,36 5,481,36
0.36% 100.00% 0.62% 100.00%
Bad debt 9.36 9.36 0.70 0.70
provisio
n
separatel
y
accrued
Of
which:
Account
s
receivab
le
withdra 781,460, 56,269,8 725,190, 884,124, 57,656,9 826,467,
99.64% 7.20% 99.38% 6.52%
wal of 737.90 97.00 840.90 647.53 62.75 684.78
bad debt
provisio
n of by
group
Of
which:
Group 1:
Undue 171,222, 171,222, 158,223, 158,223,
21.83% 0.00% 17.79%
accounts 254.88 254.88 236.80 236.80
(L/C)
Group 2:
Undue 160,719, 1,687,55 159,032, 137,080, 1,439,34 135,641,
20.49% 1.05% 15.41% 1.05%
accounts 645.02 6.30 088.72 593.18 6.21 246.97
(credit
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Lu Thai Textile Co., Ltd. Interim Report 2024
insuranc
e
insured)
Group 3:
Undue
accounts
278,195, 13,909,7 264,285, 447,692, 22,384,6 425,307,
(no 35.47% 5.00% 50.32% 5.00%
552.48 77.60 774.88 502.26 25.09 877.17
credit
insuranc
e)
Group 4:
Overdue
accounts
48,465,7 7,609,12 40,856,6 47,975,3 7,532,12 40,443,1
(credit 6.18% 15.70% 5.39% 15.70%
47.15 2.38 24.77 00.48 2.16 78.32
insuranc
e
insured)
Group 5:
Overdue
accounts
122,857, 33,063,4 89,794,0 93,153,0 26,300,8 66,852,1
(no 15.66% 26.91% 10.47% 28.23%
538.37 40.72 97.65 14.81 69.29 45.52
credit
insuranc
e)
784,284, 59,093,2 725,190, 889,606, 63,138,3 826,467,
Total 100.00% 7.53% 100.00% 7.10%
047.26 06.36 840.90 008.23 23.45 684.78
The category name of bad debt provision separately accrued: June 2024
Unit: RMB
Beginning balance Ending balance
Name Withdraw
Carrying Bad debt Carrying Bad debt
al Reason for withdraw
amount provision amount provision
proportion
Customer 1 2,751,489.34 2,751,489.34
Customer in
Customer 2 2,729,871.36 2,729,871.36 2,823,309.36 2,823,309.36 100.00%
financial difficulty
Total 5,481,360.70 5,481,360.70 2,823,309.36 2,823,309.36
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable:
□Applicable Not applicable
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversed or Ending balance
balance Withdrawal Verification Others
recovered
Bad debt provision
5,481,360.70 93,438.00 2,751,489.34 2,823,309.36
separately accrued
Withdrawal of bad
debt provision by 57,656,962.75 -985,111.39 401,954.36 56,269,897.00
group
Total 63,138,323.45 -891,673.39 0.00 3,153,443.70 0.00 59,093,206.36
115
Lu Thai Textile Co., Ltd. Interim Report 2024
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 3,153,443.70
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according
to Arrears Party
Unit: RMB
Ending Proportion to total ending Ending balance of bad debt
Name Ending balance of Ending balance of
balance of balance of accounts provision of accounts
of the the Accounts accounts receivable
contract receivable and contract receivable and impairment
entity Receivable and contract assets assets provision for contract assets
assets
Custo
80,799,894.31 80,799,894.31 10.30% 82,503.37
mer A
Custo
44,344,478.10 44,344,478.10 5.65% 10,509,641.31
mer B
Custo
36,707,812.31 36,707,812.31 4.68% 1,835,390.62
mer C
Custo
28,723,648.68 28,723,648.68 3.66% 1,582,874.01
mer D
Custo
28,017,191.64 28,017,191.64 3.57% 1,519,757.53
mer E
Total 218,593,025.04 218,593,025.04 27.86% 15,530,166.84
5. Accounts Receivable Financing
(1) Accounts Receivable Financing Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Notes Receivable 6,969,726.90 18,336,324.55
Less: Other comprehensive income-fair
-47,513.49 -88,118.79
value change
Total 6,922,213.41 18,248,205.76
(2) Accounts Receivable Financing Which Had Endorsed by the Company or had Discounted and had
not Due on the Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bills 98,285,689.07
Total 98,285,689.07
6. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
116
Lu Thai Textile Co., Ltd. Interim Report 2024
Other receivables 24,299,740.14 22,168,807.43
Total 24,299,740.14 22,168,807.43
(1) Other Receivables
1) Other Receivables Classified by Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Export rebates 4,283,605.34 3,798,857.69
VAT to be returned 6,988,086.96 7,283,733.09
Payment on behalf 8,918,452.52 8,669,608.81
Guarantee deposit and cash deposit 3,686,139.18 1,613,961.78
Borrowings and petty cash 1,685,356.49 1,962,604.48
Others 4,948,700.92 5,078,173.43
Total 30,510,341.41 28,406,939.28
2) Disclosure by Aging
Unit: RMB
Aging Ending balance Beginning carrying amount
Within one year (including 1 year) 19,853,929.16 17,090,150.86
One to two years 1,492,108.57 7,685,279.13
Two to three years 5,667,629.23 177,000.00
More than three years 3,496,674.45 3,454,509.29
Three to four years 128,000.00 35,020.00
Four to five years 78,300.00
Over 5 years 3,368,674.45 3,341,189.29
Total 30,510,341.41 28,406,939.28
3) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversed or Charged-off/ Ending balance
balance Withdrawal Others
recovered Verification
Expected credit loss of the
next 12 months at the first 880,263.44 127,478.05 1,007,741.49
stage
Expected loss in the duration
(credit impairment not 5,194,856.36 -217,859.01 4,976,997.35
occurred) at the second stage
Expected loss in the duration
(credit impairment occurred) 163,012.05 62,850.38 225,862.43
at the third stage
Total 6,238,131.85 -27,530.58 0.00 0.00 0.00 6,210,601.27
117
Lu Thai Textile Co., Ltd. Interim Report 2024
4) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Proportion to total
Name of Ending balance of
Nature Ending balance Aging ending balance of
the entity bad debt provision
other receivables %
Customer Within 1 year, 1 to 2 years
Rebate of VAT 6,988,086.96 22.90% 3,171,659.26
1 and 2 to 3 years
Customer Advance
5,031,042.62 Within 1 year 16.49% 251,552.13
2 payments
Customer
Export rebates 4,283,605.34 Within 1 year 14.04% 214,180.27
3
Customer Advance
1,282,841.36 Within 1 year 4.20% 64,142.07
4 payments
Customer Advance
1,149,200.40 Within 1 year 3.77% 57,460.02
5 payments
Total 18,734,776.68 61.40% 3,758,993.75
7. Prepayment
(1) Prepayment Listed by Aging Analysis
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 88,205,641.91 99.88% 51,843,880.46 99.96%
One to two years 101,808.00 0.12% 17,437.82 0.04%
Two to three years 1,651.40 0.00%
More than three years 0.00% 2,129.28
Total 88,309,101.31 51,863,447.56
(2) Top 5 Prepayment in Ending Balance Collected according to the Prepayment Target
The advances to suppliers from the top five of prepaid parties classified based on the ending balance totals RMB51,649,142.86 in
the current period, accounting for 58.49% of the total ending balance of the advances to suppliers.
8. Inventory
Whether the Company needs to comply with the disclosure requirements for the real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Depreciation Depreciation
Item reserves of reserves of
Carrying amount Carrying value Carrying amount Carrying value
inventories or inventories or
impairment impairment
118
Lu Thai Textile Co., Ltd. Interim Report 2024
provision for provision for
contract contract
performance costs performance costs
Raw materials 920,639,465.98 48,933,964.67 871,705,501.31 961,742,257.63 48,846,493.37 912,895,764.26
Goods in
493,298,150.00 14,522,519.63 478,775,630.37 504,407,562.92 11,183,192.80 493,224,370.12
process
Inventory
946,421,769.26 186,436,309.51 759,985,459.75 886,717,966.10 181,209,030.54 705,508,935.56
goods
Commissioned
15,097,450.37 15,097,450.37 12,510,504.76 12,510,504.76
products
Materials in
16,942,695.35 16,942,695.35
transit
Total 2,392,399,530.96 249,892,793.81 2,142,506,737.15 2,365,378,291.41 241,238,716.71 2,124,139,574.70
(2) Falling Price Reserves of Inventory and Impairment Reserves for Contract Performance Costs
Unit: RMB
Increased amount of the current Decreased amount for
period the current period
Item Beginning balance Transferred- Ending balance
Other
Withdrawal Others back or
s
charged-off
Raw materials 48,846,493.37 87,471.30 48,933,964.67
Goods in
11,183,192.80 3,308,741.99 30,584.84 14,522,519.63
process
Inventory
181,209,030.54 31,410,703.20 152,690.05 26,336,114.28 186,436,309.51
goods
Total 241,238,716.71 34,719,445.19 270,746.19 26,336,114.28 249,892,793.81
9. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
Other tax 9,624,603.07 801,750.09
Prepaid income tax 7,854,160.90 2,774,815.63
Prepaid other taxes 3,453,982.70
Convertible broken lot fund 199,666.07 199,680.79
Refundable deposits 127,182,557.28 137,881,884.82
Total 144,860,987.32 145,112,114.03
10. Long-term Equity Investment
Unit: RMB
Begin Increase/decrease for the current period Endi
ning Endin
ng
balanc A Gains and Adjust Chan Cash Withd g
Beginnin Red balan
e of d losses ment ges bonus rawal Balan
g balance deprec uced ce of
Investee di recognized of of or of Oth ce
(carrying iation inve depre
ti under the other other profits impair ers (Carry
value) reserv stme ciatio
e o equity compr equit announc ment ing
nt n
na method ehensi y ed to provis Value
reser
119
Lu Thai Textile Co., Ltd. Interim Report 2024
l ve issue ion ) ve
in incom
ve e
st
m
en
t
I. Joint ventures
II. Associated enterprises
Ningbo Mei
shan Bonded
Port Area
Haohong
Equity
57,49
Investment 48,257,69 9,232,654.
0,354.
Partnership 9.71 55
26
(L.P)
(hereinafter
referred to as
“Haohong
Investment”)
Ningbo
Haoying
Equity
Investment
- 94,66
Partnership 95,279,78
613,560.0 6,220.
(L.P) 0.06
2 04
(hereinafter
referred to as
“Haoying
Investment”)
152,1
143,537,4 8,619,094.
Subtotal 56,57
79.77 53
4.30
152,1
143,537,4 8,619,094.
Total 56,57
79.77 53
4.30
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□Applicable Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□Applicable Not applicable
11. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Equity instrument investment 76,750,000.00 76,750,000.00
Financial assets assigned measured by fair value and the changes be
12,000,000.00 12,000,000.00
included in the current gains and losses
Total 88,750,000.00 88,750,000.00
120
Lu Thai Textile Co., Ltd. Interim Report 2024
12. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
Applicable □Not applicable
Unit: RMB
Houses and Construction
Item Land use right Total
buildings in progress
I. Original carrying value
1. Beginning balance 33,708,658.12 33,708,658.12
2. Increased amount for the current period
(1) Outsourcing
(2) Transfer from inventory/fixed
assets/construction in progress
(3) Business combination increase
3. Decreased amount for the current period
(1) Disposal
(2) Other transfer
4. Ending balance 33,708,658.12 33,708,658.12
II. Accumulative depreciation and accumulative
amortization
1. Beginning balance 14,130,482.19 14,130,482.19
2. Increased amount for the current period 451,321.03 451,321.03
(1) Withdrawal or amortization 451,321.03 451,321.03
3. Decreased amount for the current period
(1) Disposal
(2) Other transfer
4. Ending balance 14,581,803.22 14,581,803.22
III. Depreciation reserves
1. Beginning balance
2. Increased amount for the current period
(1) Withdrawal
3. Decreased amount for the current period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
1. Ending carrying value 19,126,854.90 19,126,854.90
2. Beginning carrying value 19,578,175.93 19,578,175.93
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□Applicable Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□Applicable Not applicable
121
Lu Thai Textile Co., Ltd. Interim Report 2024
(2) Investment Property Adopting the Fair Value Measurement Mode
□Applicable Not applicable
13. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 5,921,271,772.02 5,597,692,505.07
Total 5,921,271,772.02 5,597,692,505.07
(1) List of Fixed Assets
Unit: RMB
Electronic
Houses and Machinery Transportation
Item equipment and Total
buildings equipment equipment
others
I. Original carrying value:
1. Beginning balance 3,771,409,356.61 7,498,350,318.66 55,476,805.41 130,828,101.77 11,456,064,582.45
2. Increased amount for the
334,943,999.89 232,905,088.73 2,744,364.11 9,759,151.37 580,352,604.10
current period
(1) Purchase 1,074,574.37 221,287,730.88 2,672,427.51 9,599,615.82 234,634,348.58
(2) Transfer from construction
327,295,942.32 2,429,190.48 329,725,132.80
in progress
(3) Business combination
increase
(4) Other increase 6,573,483.20 9,188,167.37 71,936.60 159,535.55 15,993,122.72
3. Decreased amount for the
1,424,083.05 22,916,780.17 1,882,139.07 639,682.32 26,862,684.61
current period
(1) Disposal or scrap 526,546.40 21,481,746.22 1,882,139.07 639,682.32 24,530,114.01
(2) Other decrease 897,536.65 1,435,033.95 2,332,570.60
4. Ending balance 4,104,929,273.45 7,708,338,627.22 56,339,030.45 139,947,570.82 12,009,554,501.94
II. Accumulative depreciation
1. Beginning balance 1,343,515,450.34 4,311,518,011.89 43,379,836.82 116,797,266.54 5,815,210,565.59
2. Increased amount for the
66,063,431.88 168,254,719.08 1,881,916.88 3,132,621.07 239,332,688.91
current period
(1) Withdrawal 63,928,600.93 165,157,534.42 1,756,793.61 3,022,285.59 233,865,214.55
(2) Other Increases 2,134,830.95 3,097,184.66 125,123.27 110,335.48 5,467,474.36
3. Decreased amount for the
204,161.51 6,948,932.34 1,606,293.21 452,092.87 9,211,479.93
current period
(1) Disposal or scrap 204,161.51 6,794,414.73 1,606,293.21 452,092.87 9,056,962.32
(2) Other Increases 154,517.61 154,517.61
4. Ending balance 1,409,374,720.71 4,472,823,798.63 43,655,460.49 119,477,794.74 6,045,331,774.57
III. Depreciation reserves
1. Beginning balance 429,416.16 42,691,703.55 5,671.30 34,720.78 43,161,511.79
2. Increased amount for the
current period
122
Lu Thai Textile Co., Ltd. Interim Report 2024
(1) Withdrawal
3. Decreased amount for the
210,556.44 0.00 210,556.44
current period
(1) Disposal or scrap 210,556.44 210,556.44
4. Ending balance 429,416.16 42,481,147.11 5,671.30 34,720.78 42,950,955.35
IV. Carrying value
1. Ending carrying value 2,695,125,136.58 3,193,033,681.48 12,677,898.66 20,435,055.30 5,921,271,772.02
2. Beginning carrying value 2,427,464,490.11 3,144,140,603.22 12,091,297.29 13,996,114.45 5,597,692,505.07
(2) Fixed Assets Leased out by Operation Lease
Unit: RMB
Item Ending carrying amount
Houses 4,707,078.93
(3) Fixed Assets Failed to Accomplish Certification of Property
Unit: RMB
Item Carrying value Reason
Lufeng weaving dye gray yarn Under the relevant certificate procedures of acceptance, measurement,
11,646,853.92
warehouse examination by the real estate trading center and other departments
Lulian New Materials Yarn
7,678,077.17 The same as above
Warehouse
Lu Thai Textile Warehouse 01,
6,048,928.22 The same as above
02
(4) Impairment Test of Fixed Assets
□Applicable Not applicable
14. Construction in Progress
Unit: RMB
Item Ending balance Beginning balance
Construction in progress 107,413,563.18 383,113,337.09
Engineering materials 342,989,820.23 485,383,541.32
Total 450,403,383.41 868,496,878.41
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Depr
Depre
Item eciati
ciation
Carrying amount Carrying value Carrying amount on Carrying value
reserv
reser
es
ves
Production line project 86,614,488.90 86,614,488.90 375,973,427.49 375,973,427.49
123
Lu Thai Textile Co., Ltd. Interim Report 2024
of high-grade fabrics
(Phase I)
Reform project of
Xinsheng Thermal 4,350,657.38 4,350,657.38 4,783,916.38 4,783,916.38
Power
Double twisting project
13,209,509.32 13,209,509.32
phase II
Other sporadic projects 3,238,907.58 3,238,907.58 2,355,993.22 2,355,993.22
Total 107,413,563.18 107,413,563.18 383,113,337.09 383,113,337.09
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Of
Propor
which:
tion of Capitali
Other Accum amoun
accum zation
Increas decrea ulated t of
Transf ulated rate of
Beginn ed sed amoun capital
erred Ending invest Job interest Capital
Project ing amoun amoun t of ized
Budget in balanc ment schedu s for resourc
Name balanc t of the t for interes interes
fixed e in le the es
e current the t ts for
assets constr Reporti
period current capital the
uctions ng
period ization Report
to Period
ing
budget
Period
Producti Public
on line offering
project 464,80 375,97 35,366 326,44 - 86,614 13,626 fund
102.86 99.00 2,028,
of high- 0,000. 3,427. ,233.6 5,784. 1,720, ,488.9 ,674.1 3.68% and
% % 489.95
grade 00 49 2 54 612.33 0 1 self-
fabrics raised
(Phase I) fund
Reform
project
of
8,000, 4,783, 1,995, 2,429, 4,350, 62.93 90.00
Xinshen 0.00 Other
000.00 916.38 931.48 190.48 657.38 % %
g
Thermal
Power
Double
13,209 13,209
twisting 42.34 42.34
,509.3 0.00 0.00 ,509.3 Other
project % %
2 2
phase II
Other
2,355, 1,735, 850,15 2,617. 3,238,
sporadic Other
projects 993.22 690.00 7.78 86 907.58
472,80 383,11 52,307 329,72 - 107,41 13,626
2,028,
Total 0,000. 3,337. ,364.4 5,132. 1,717, 3,563. ,674.1
489.95
00 09 2 80 994.47 18 1
(3) Impairment Test of Construction in Progress
□Applicable Not applicable
124
Lu Thai Textile Co., Ltd. Interim Report 2024
(4) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Item Depreciat
Depreciatio
Carrying amount ion Carrying value Carrying amount Carrying value
n reserves
reserves
Special
871,768.43 871,768.43
materials
Equipment
to be 342,989,820.23 342,989,820.23 484,511,772.89 484,511,772.89
installed
Total 342,989,820.23 342,989,820.23 485,383,541.32 485,383,541.32
15. Right-of-use Assets
(1) List of Right-of-use Assets
Unit: RMB
Item Houses and buildings Land use right Total
I. Original carrying value
1. Beginning balance 57,851,702.69 452,496,166.65 510,347,869.34
2. Increased amount for the
19,491,168.76 4,004,412.22 23,495,580.98
current period
(1) Rent 19,475,524.63 1,519,034.73 20,994,559.36
(2) Other increase 15,644.13 2,485,377.49 2,501,021.62
3. Decreased amount for the
535,874.95 0.00 535,874.95
current period
(1) Other decrease 535,874.95 535,874.95
4. Ending balance 76,806,996.50 456,500,578.87 533,307,575.37
II. Accumulative depreciation
1. Beginning balance 14,623,691.51 32,497,758.62 47,121,450.13
2. Increased amount for the
5,560,748.84 7,100,243.58 12,660,992.42
current period
(1) Withdrawal 5,547,430.30 6,975,734.38 12,523,164.68
(2) Other Increases 13,318.54 124,509.20 137,827.74
3. Decreased amount for the
535,874.95 0.00 535,874.95
current period
(1) Disposal
(2) Other decrease 535,874.95 535,874.95
4. Ending balance 19,648,565.40 39,598,002.20 59,246,567.60
III. Depreciation reserves
1. Beginning balance
2. Increased amount for the
current period
(1) Withdrawal
3. Decreased amount for the
125
Lu Thai Textile Co., Ltd. Interim Report 2024
current period
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying value 57,158,431.10 416,902,576.67 474,061,007.77
2. Beginning carrying value 43,228,011.18 419,998,408.03 463,226,419.21
16. Intangible assets
(1) List of intangible assets
Unit: RMB
Non-patent Software use
Item Land use right Patent right Total
technologies rights
I. Original carrying value
1. Beginning balance 470,338,494.00 409,550.00 2,137,122.72 472,885,166.72
2. Increased amount for the
973.97 973.97
current period
(1) Purchase
(2) Internal R&D
(3) Business combination
increase
(4) Other increase 973.97 973.97
3. Decreased amount for the
53,097.35 53,097.35
current period
(1) Disposal 53,097.35 53,097.35
4. Ending balance 470,338,494.00 409,550.00 2,084,999.34 472,833,043.34
II. Accumulated amortization
1. Beginning balance 128,418,319.87 112,626.36 1,006,341.07 129,537,287.30
2. Increased amount for the
5,048,199.62 20,477.52 281,352.38 5,350,029.52
current period
(1) Withdrawal 5,048,199.62 20,477.52 280,905.97 5,349,583.11
(2) Other Increases 446.41 446.41
3. Decreased amount for the
53,097.35 53,097.35
current period
(1) Disposal 53,097.35 53,097.35
4. Ending balance 133,466,519.49 133,103.88 1,234,596.10 134,834,219.47
III. Depreciation reserves
1. Beginning balance
2. Increased amount for the
current period
(1) Withdrawal
3. Decreased amount for the
current period
(1) Disposal
4. Ending balance
126
Lu Thai Textile Co., Ltd. Interim Report 2024
IV. Carrying value
1. Ending carrying value 336,871,974.51 276,446.12 850,403.24 337,998,823.87
2. Beginning carrying value 341,920,174.13 296,923.64 1,130,781.65 343,347,879.42
The proportion of intangible assets formed from the internal R&D of the Company at the Period-end to the ending balance of
intangible assets was 0.00%.
(2) Impairment Test of Intangible Assets
□Applicable Not applicable
17. Development costs
Ending
Increased amount of the current period Decreased amount for the current period
Beginning balance
Item
balance Internal development Recognized as Transferred to current
Other
costs intangible assets profit or loss
R&D of
115,374,597.19 115,374,597.19
products
Total 115,374,597.19 115,374,597.19
18. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
Decrease for the
Increase for the current period
Name of the invested current period
units or events generating Beginning balance Formed by Ending balance
goodwill business Disposal
combination
Xinsheng Power 20,563,803.29 20,563,803.29
Total 20,563,803.29 20,563,803.29
19. Long-term Prepaid Expense
Unit: RMB
Increased amount Amortization
Other decreased
Item Beginning balance of the current amount of the Ending balance
amount
period current period
Decoration fee 1,694,425.58 3,299,180.52 587,479.50 4,406,126.60
Technical service
44,220.80 17,688.30 26,532.50
charges
Other prepaid
77,192.22 66,164.82 11,027.40
expense
Total 1,815,838.60 3,299,180.52 671,332.62 4,443,686.50
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Lu Thai Textile Co., Ltd. Interim Report 2024
20. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for
255,649,910.10 36,973,317.30 230,431,449.02 36,029,044.63
impairment of assets
Internal unrealized
114,194,656.47 15,598,842.28 107,060,058.13 14,691,107.03
profit
Deductible losses 65,999,393.32 11,811,995.92 109,351,504.69 19,934,589.31
Payroll payable 67,324,258.61 10,109,806.74 67,324,258.61 10,109,806.74
Deferred income 148,127,211.72 22,982,884.87 151,500,472.11 23,556,894.11
Contract liabilities 81,956,025.16 20,489,006.29 89,450,421.20 22,157,141.99
The changes of
accounts receivable 47,513.49 7,127.03 81,235.81 12,185.37
financing in fair value
Lease liabilities 106,288,784.47 15,943,317.67 93,523,870.95 14,028,580.65
Restricted stock
27,488,845.13 4,123,326.77 27,488,845.13 4,123,326.77
incentive fees
Convertible corporate
46,083,362.73 6,912,504.41 46,083,362.71 6,912,504.41
bonds
Associate 4,472,052.48 670,807.87 13,704,707.03 2,055,706.05
Fund losses 81,935,535.64 12,290,330.35 28,541,486.65 4,281,223.00
Total 999,567,549.32 157,913,267.50 964,541,672.04 157,892,110.06
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Depreciation of fixed
637,989,146.71 100,190,241.09 632,363,989.77 99,342,402.95
assets
Changes in fair value
of trading financial 172,623,723.47 25,893,558.52 245,835,380.61 36,875,307.09
assets
Changes in the fair
value of other non- 19,467,400.00 2,920,110.00 19,467,400.00 2,920,110.00
current financial assets
Associated enterprises 18,908,403.55 2,836,260.53 19,521,963.57 2,928,294.54
Right-of-use assets 99,143,170.40 14,871,475.55 87,417,883.01 13,112,682.46
Total 948,131,844.13 146,711,645.69 1,004,606,616.96 155,178,797.04
(3) Deferred income tax assets or liabilities had been off-set listed in net amount
Unit: RMB
Ending off-set amount Ending balance of Beginning off-set Beginning balance of
Item of deferred income tax deferred income tax amount of deferred deferred income tax
assets and liabilities assets and liabilities income tax assets and assets and liabilities
128
Lu Thai Textile Co., Ltd. Interim Report 2024
liabilities
Deferred income tax
157,913,267.50 157,892,110.06
assets
Deferred income tax
146,711,645.69 155,178,797.04
liabilities
(4) List of unrecognized deferred income tax assets
Unit: RMB
Item Ending balance Beginning balance
Deductible temporary difference 103,981,497.90 65,448,810.95
Deductible losses 282,890,915.21 257,150,469.99
Total 386,872,413.11 322,599,280.94
(5) Deductible losses of unrecognized deferred income tax assets will due in the following years
Unit: RMB
Years Ending amount Beginning amount Note
Y2025 299.83
Y2026 71,235,558.18 71,235,558.18
Y2027 96,904,257.37 96,904,257.37
Y2028 89,010,354.61 89,010,354.61
Y2029 25,740,745.05
Total 282,890,915.21 257,150,469.99
21. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Depre Depre
Item ciatio ciatio
Carrying amount n Carrying value Carrying amount n Carrying value
reserv reserv
es es
Project prepayment 672,659.25 672,659.25
Prepayment for equipment 8,345,688.43 8,345,688.43 2,008,677.98 2,008,677.98
Prepayment for land 14,836,218.75 14,836,218.75
Term deposits over 1 year 485,000,000.00 485,000,000.00 150,000,000.00 150,000,000.00
Interest receivable from term
10,059,935.69 10,059,935.69 3,008,929.60 3,008,929.60
deposits over 1 year
Total 518,241,842.87 518,241,842.87 155,690,266.83 155,690,266.83
22. Assets with Restricted Ownership or Right to Use
Unit: RMB
Period-end Period-beginning
Status Statu
Item Carrying Carrying Type of of Carrying Carrying s of
Type of restriction
amount value restriction restrict amount value restri
ion ction
Monetary 2,459,213.5 2,459,213.5 Deposit, frozen 4,024,123.1 4,024,123.1 Deposit, frozen
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Lu Thai Textile Co., Ltd. Interim Report 2024
capital 7 7 4 4
Endorsed or Endorsed or
Notes 64,533,654. 64,533,654. discounted but 51,979,653. 51,979,653. discounted but not
receivable 20 20 not yet due for 25 25 yet due for
derecognization derecognization
Other current 127,182,55 127,182,55 Refundable 137,881,88 137,881,88
Refundable deposits
assets 7.28 7.28 deposits 4.82 4.82
194,175,42 194,175,42 193,885,66 193,885,66
Total
5.05 5.05 1.21 1.21
23. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Borrowings secured by guarantee 49,025,275.16 68,275,604.36
Credit loan 549,603,995.30 512,429,167.91
Total 598,629,270.46 580,704,772.27
Notes of the category for short-term loans:
The short-term borrowing includes interest payable of RMB512,249.66.
24. Trading financial liabilities
Unit: RMB
Item Ending balance Beginning balance
Trading financial liabilities 80,716,835.26 46,785,831.47
Of which:
Derivative financial liabilities 80,716,835.26 46,785,831.47
Of which:
Total 80,716,835.26 46,785,831.47
25. Accounts Payable
(1) List of accounts payable
Unit: RMB
Item Ending balance Beginning balance
Payment for goods 109,074,933.12 127,198,717.36
Engineering equipment 72,532,063.65 106,150,377.55
Others 40,117,971.03 42,153,820.14
Total 221,724,967.80 275,502,915.05
(2) Significant Accounts Payable Aging over One Year or Overdue
No significant accounts payable over one year old at the end of the Current Period.
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26. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Dividends payable 441,113.64 441,113.64
Other payables 18,274,288.70 47,108,259.88
Total 18,715,402.34 47,549,373.52
(1) Dividends payable
Unit: RMB
Item Ending balance Beginning balance
Dividends payable to individual
441,113.64 441,113.64
shareholders
Total 441,113.64 441,113.64
Other notes: including significant dividends payable unpaid for over one year, the unpaid reason shall be disclosed:
(2) Other Payables
1) Other payables listed by nature
Unit: RMB
Item Ending balance Beginning balance
Deposits and cash deposits etc. 5,758,066.92 5,026,687.70
Collecting payment on behalf of others 366,641.34 213,812.12
Restricted stock repurchase obligations 186,060.00 31,556,265.00
Others 11,963,520.44 10,311,495.06
Total 18,274,288.70 47,108,259.88
27. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Advance from sales 171,441,953.96 203,270,689.03
Less: contract liability recorded in other
-5,459,173.89 -15,197,353.14
current liabilities
Total 165,982,780.07 188,073,335.89
Significant contract liabilities aging over one year
Unit: RMB
Item Ending balance Unpaid/Un-carry-over reason
Heating facilities supporting fees not yet
Customer 1 18,565,812.13
carried forward
Heating facilities supporting fees not yet
Customer 2 18,808,502.64
carried forward
Total 37,374,314.77
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Lu Thai Textile Co., Ltd. Interim Report 2024
28. Payroll Payable
(1) List of payroll payable
Unit: RMB
Increase for the Decrease for the
Item Beginning balance Ending balance
current period current period
I. Short-term salary 284,329,504.63 703,391,825.99 753,763,303.47 233,958,027.15
II. Post-employment benefit-
15,469.09 86,717,708.13 86,471,859.17 261,318.05
defined contribution plans
III. Termination benefits 420,365.94 420,365.94 0.00
Total 284,344,973.72 790,529,900.06 840,655,528.58 234,219,345.20
(2) List of Short-term Salary
Unit: RMB
Increase for the Decrease for the
Item Beginning balance Ending balance
current period current period
1. Salary, bonus, allowance,
213,425,517.98 626,356,613.26 678,504,314.76 161,277,816.48
subsidy
2. Employee welfare 211,683.08 20,641,385.86 20,644,898.57 208,170.37
3. Social insurance 32,536.50 39,356,951.74 39,314,439.07 75,049.17
Of which: Medical insurance
31,411.48 35,713,302.82 35,670,714.40 73,999.90
premiums
Work-related injury insurance
375.01 3,639,148.86 3,639,224.61 299.26
premiums
Maternity insurance 750.01 4,500.06 4,500.06 750.01
4. Housing fund 7,024,438.65 7,024,438.65 0.00
5. Labor union budget and
70,659,767.07 10,012,436.48 8,275,212.42 72,396,991.13
employee education budget
Total 284,329,504.63 703,391,825.99 753,763,303.47 233,958,027.15
(3) List of defined contribution plans
Unit: RMB
Increase for the current Decrease for the
Item Beginning balance Ending balance
period current period
1. Basic pension
15,000.32 82,470,541.76 82,246,835.56 238,706.52
insurance
2. Unemployment
468.77 4,247,166.37 4,225,023.61 22,611.53
insurance premiums
Total 15,469.09 86,717,708.13 86,471,859.17 261,318.05
Other notes:
The Company, in line with the requirement, participates in endowment insurance, unemployment insurance plans, and so on.
Under these plans, the Company makes monthly contributions to these plans at 16% and 0.70% of the social security contribution
base, respectively.
No further payment obligations will be incurred by the Company beyond the above monthly contribution fees. The relevant
132
Lu Thai Textile Co., Ltd. Interim Report 2024
expense occurred was recorded into current profits and losses or related asset costs.
29. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 1,834,511.62 15,261,850.74
Enterprise income tax 15,600,828.02 14,347,230.63
Personal income tax 2,401,078.42 1,266,426.62
Urban maintenance and construction tax 957,813.27 2,753,492.14
Stamp duty 586,514.43 848,769.75
Real estate tax 5,500,763.31 5,059,177.21
Land use tax 2,388,606.80 668,899.85
Educational fee 443,622.54 1,253,814.31
Local education surcharge 299,448.37 843,626.22
Tax on natural resources 154,950.00 31,938.00
Environmental protection tax 213,589.91 298,007.08
Total 30,381,726.69 42,633,232.55
30. Current Portion of Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Long-term borrowings matured within 1
16,326,401.72 88,930,000.00
year
Lease obligation matured within 1 year 6,992,799.73 7,277,192.49
Total 23,319,201.45 96,207,192.49
31. Other current liabilities
Unit: RMB
Item Ending balance Beginning balance
Tax to be charged off 5,459,173.89 15,197,353.14
Endorsed undue bill under non-
52,011,856.65 48,449,554.97
derecognition
Total 57,471,030.54 63,646,908.11
32. Long-term Borrowings
(1) Category of long-term borrowings
Unit: RMB
Item Ending balance Beginning balance
Credit loan 722,681,961.13 348,922,974.40
Less: current portion of long-term
-16,326,401.72 -88,930,000.00
borrowings
133
Lu Thai Textile Co., Ltd. Interim Report 2024
Total 706,355,559.41 259,992,974.40
Note to the category of long-term borrowings:
The long-term borrowings included interest payable of RMB621,917.86
Other notes, including interest rate range:
Interest rate range
Item Ending balance Interest rate range (%) Beginning balance
(%)
Credit loans 722,681,961.13 2.30%-2.50% 348,922,974.40 2.50%-2.80%
33. Bonds Payable
(1) Bonds payable
Unit: RMB
Item Ending balance Beginning balance
Convertible corporate bonds 1,482,171,331.99 1,476,572,070.79
Total 1,482,171,331.99 1,476,572,070.79
(2) Changes of bonds payable (excluding other financial instruments divided as financial liabilities such
as preferred shares and perpetual bonds)
Unit: RMB
Amort
izatio
Intere Repai
Issued n of Curre
Begin st d in Endin
Coup Bond Issue in the premi nt Defau
Par Issue ning accrue the g
Name on durati amou Repor um shares lt or
value rate date balanc d at Repor balanc
on nt ting and conve not
e par ting e
Period depre rted
value Period
ciatio
n
LuTh
ai
Conve 1,400, 9 1,400, 1,476, 11,40 15,19 20,99 1,482,
6 1,700.
rtible 000,0 April 000,0 572,0 0.00 8,486. 0,197. 7,723. 171,3 No
years 00
Bond 00.00 2020 00.00 70.79 94 87 61 31.99
(1270
16)
1,400, 1,476, 11,40 15,19 20,99 1,482,
1,700.
Total 000,0 572,0 0.00 8,486. 0,197. 7,723. 171,3
00
00.00 70.79 94 87 61 31.99
(3) Notes to the convertible corporate bonds
According to the Approval of the Public Issue of Convertible Corporate Bonds of Lu Thai Textile Co., Ltd. (ZH.J.X.K [2020] No.
299) of the China Securities Regulatory Commission, the Company issued 14 million convertible bonds with a face value of
RMB100 each for a total issue amount of RMB1.4 billion with a maturity of 6 years, i.e. from 9 April 2020 to 8 April 2026.
The coupon rates of the convertible bonds issued by the Company are 0.3%, 0.6%, 1%, 1.5%, 1.8% and 2% in the following order
134
Lu Thai Textile Co., Ltd. Interim Report 2024
from the first stage to the sixth stage, with interest payable annually. The conversion period shall commence from (and include)
the first trading day on 15 October 2020, six months after the date of issue, and shall end on (and include) the trading day prior to
the maturity date of the convertible bonds (8 April 2026). Holders may apply for conversion during the conversion period.
The initial conversion price of convertible corporate bonds was RMB9.01 per share when it was issued but was adjusted to
RMB8.91 per share since July 9, 2020, after the Company implemented the 2019 profit sharing agreement on July 8, 2020. After
the Company implemented the restricted stock incentive plan in 2021, the price was adjusted to RMB8.76 per share accordingly
since June 7, 2021. Upon the implementation of the 2020 profit sharing agreement by the Company on June 18, 2021, it was
adjusted to RMB8.71 per share accordingly again since June 18, 2021. Upon the implementation of the 2021 profit sharing
agreement by the Company on June 23, 2022, it was adjusted to RMB8.61 per share accordingly again since June 23, 2022. The
Company completed the formalities for cancellation of the repurchased shares on 25 May 2023, and the conversion price of the
convertible bond was adjusted accordingly to RMB8.73 per share on 26 May 2023. Upon the implementation of the 2022 Profit
Distribution Plan by the Company on 16 June 2023, the conversion price of the convertible bond was adjusted to RMB8.63 per
share accordingly on 16 June 2023. The Company completed the formalities for cancellation of the repurchased shares on 1 March
2024, and the conversion price of the convertible bond was adjusted accordingly to RMB8.87 per share on 4 March 2024. Upon
the implementation of the 2023 Profit Distribution Plan by the Company on 19 June 2024, the conversion price of the convertible
bond was adjusted to RMB8.74 per share accordingly on 19 June 2024.
34. Lease obligation
Unit: RMB
Item Ending balance Beginning balance
Lease payments 134,961,194.73 123,608,615.06
Unrecognized financing costs -28,336,471.86 -29,751,198.16
Less: Current portion of lease liabilities -6,992,799.73 -7,277,192.49
Total 99,631,923.14 86,580,224.41
Other notes
The amount of interest expense on lease liabilities accrued in H1 2024 was RMB2,405,053.32, which was included in financial
costs - interest expense.
35. Long-term Payroll Payable
(1) List of long-term payroll payable
Unit: RMB
Item Ending balance Beginning balance
III. Other long-term welfare 57,276,675.61 57,276,675.61
Total 57,276,675.61 57,276,675.61
36. Deferred Income
Unit: RMB
Increase for the Decrease for the Reason for
Item Beginning balance Ending balance
current period current period formation
Government grants 151,768,947.92 350,000.00 3,731,952.21 148,386,995.71 Government grants
135
Lu Thai Textile Co., Ltd. Interim Report 2024
Total 151,768,947.92 350,000.00 3,731,952.21 148,386,995.71
37. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning Shares
New Bonu Ending balance
balance converted
shares s Others Subtotal
from capital
issued shares
reserve
Total
share 863,607,634.00 -46,242,738.00 -46,242,738.00 817,364,896.00
s
Other notes:
(1) In accordance with the Proposal on Repurchase of the Company’s Domestically Listed Foreign Shares (B Share). reviewed
and approved by the Company at the 10th Meeting of the 10th Board of Directors on 19 June 2023 and the 1st Extraordinary
General Meeting of 2023 on 6 July 2023, the Company repurchased 46,176,428 B shares and completed the formalities for
cancellation of the foregoing repurchased shares at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited on 1 March 2024. This change in share capital has been audited by Zhitong Accounting Firm (Special General Partnership)
and the capital verification report ZTYZ (2024) No. 371C000075 was issued on 26 February 2024.
(2) In conformity with the resolution of the 18th Meeting of the Tenth Board of Directors on 19 January 2024 and the resolution of
the General Meeting of the Company on 5 February 2024, the Proposal on Repurchase and Cancel Authorized but Unlocked
Restricted Share of the Incentive Personnel not Conforming to the Incentive Condition, all the 66,500 shares authorized to the
original incentive personnel who did not conform to the incentive condition of the Company were repurchased and cancelled.
(3) A total of 190 shares of convertible bonds of the Company can be converted in the Reporting Period.
38. Other Equity Instruments
(1) Changes of outstanding financial instruments such as preferred shares and perpetual bonds at the period-end
Unit: RMB
Period-beginning Increase Decrease Period-end
Outstanding financial
Num Numb Carrying Numb Carrying Numb
instruments Carrying value Carrying value
ber er value er value er
Convertible debt to
71,383,677.78 86.69 71,383,591.09
equity
Total 71,383,677.78 86.69 71,383,591.09
Changes of other equity instruments in the Current Period, reasons thereof and basis of related accounting treatment:
The decrease of other equity instruments in the Reporting Period was due to convertible debt to equity
39. Capital Reserves
Unit: RMB
Increase for the Decrease for the
Item Beginning balance Ending balance
current period current period
Capital premium (premium
249,154,010.40 30,051,192.18 153,713,470.40 125,491,732.18
on stock)
Other capital reserves 85,638,604.36 3,320,556.76 30,049,600.00 58,642,016.12
Total 334,792,614.76 33,371,748.94 183,763,070.40 184,401,293.30
136
Lu Thai Textile Co., Ltd. Interim Report 2024
Other notes, including a description of the increase or decrease for the current period and the reasons for the change:
(1) The capital reserves-capital premium decreased by RMB153,572,985.40 due to repurchase of B shares in the Reporting Period;
(2) In terms of the restricted stock incentive fees in the Reporting Period, the capital reserve - other capital reserve increased by
RMB2,994,814.61. The portion of restricted shares of RMB30,049,600.00 due to be unlocked was transferred from the capital
reserve - other capital reserve to the capital reserve - capital premium.
(3) The capital reserves-capital premium decreased by RMB140,485 due to repurchase of restricted shares.
40. Treasury stocks
Unit: RMB
Increase for the current Decrease for the
Item Beginning balance Ending balance
period current period
Restricted stock 31,556,265.00 31,370,205.00 186,060.00
B shares repurchase 161,882,455.78 37,866,957.62 199,749,413.40
Total 193,438,720.78 37,866,957.62 231,119,618.40 186,060.00
Other notes, including a description of the increase or decrease for the current period and the reasons for the change:
1. RMB31,370,205.00 was decreased for the current period due to the unlocking and repurchase of restricted shares.
2. RMB37,886,957.62 of treasury stocks due to B share repurchase was increased.
3. RMB199,749,413.40 of B shares was cancelled.
41. Other comprehensive income
Unit: RMB
Amount of the current period
Less: Less:
recorded in recorded in
other other
Amount comprehen comprehen
Attributabl Attributa
before sive sive
Beginning e to the ble Ending
Item deducting income in income in Less:
balance Company minority balance
income tax prior period prior period Income tax
as the sharehold
for the and and expense
parent after ers after
current transferred transferred
tax tax
period in profit or in retained
loss in the earnings in
Current the Current
Period Period
II. Other
comprehen
sive
income that
may 131,343,14 9,381,547.9 9,376,489.5 140,719,631.
5,058.34 0.00
subsequentl 1.63 1 7 20
y be
reclassified
to profit or
loss
137
Lu Thai Textile Co., Ltd. Interim Report 2024
Differences
arising
from
translation
131,410,45 9,340,942.6 9,340,942.6 140,751,394.
of foreign
1.64 1 1 25
currency-
denominate
d financial
statements
The
changes of
accounts
receivable -67,310.01 40,605.30 5,058.34 35,546.96 -31,763.05
financing
in fair
value
Total of
other
131,343,14 9,381,547.9 9,376,489.5 140,719,631.
comprehen 5,058.34
1.63 1 7 20
sive
income
42. Special Reserve
Unit: RMB
Increase for the current Decrease for the
Item Beginning balance Ending balance
period current period
Safety production costs 4,090,000.00 1,522,239.68 2,567,760.32
Total 4,090,000.00 1,522,239.68 2,567,760.32
43. Surplus reserves
Unit: RMB
Increase for the current Decrease for the
Item Beginning balance Ending balance
period current period
Statutory surplus
1,257,319,442.76 1,257,319,442.76
reserves
Discretional surplus
3,341,572.58 3,341,572.58
reserves
Total 1,260,661,015.34 1,260,661,015.34
44. Retained Earnings
Unit: RMB
Item Reporting period Same period of last year
Beginning balance of retained profits
6,762,457,543.07 6,490,910,719.35
before adjustments
Beginning balance of retained profits
6,762,457,543.07 6,490,910,719.35
after adjustments
Add: Net profit attributable to owners of
169,559,969.54 221,647,998.15
the Company as the parent
138
Lu Thai Textile Co., Ltd. Interim Report 2024
Dividends of common shares
106,249,766.48 86,360,751.90
payable
Ending retained profits 6,825,767,746.13 6,626,197,965.60
List of adjustment of beginning retained profits:
1) RMB0.00 beginning retained profits was affected by retrospective adjustment conducted according to the Accounting Standards
for Business Enterprises and relevant new regulations.
2) RMB0.00 beginning retained profits was affected by changes in accounting policies.
3) RMB0.00 beginning retained profits was affected by correction of significant accounting errors.
4) RMB0.00 beginning retained profits was affected by changes in combination scope arising from same control.
5) RMB0.00 beginning retained profits was affected totally by other adjustments.
45. Operating revenue and cost of sales
Unit: RMB
Reporting period Same period of last year
Item
Operating Revenue Cost of Sales Operating Revenue Cost of Sales
Main operations 2,763,053,072.61 2,078,775,369.49 2,755,370,258.68 2,166,155,297.68
Other operations 67,435,613.00 53,218,122.64 85,121,003.79 67,777,069.99
Total 2,830,488,685.61 2,131,993,492.13 2,840,491,262.47 2,233,932,367.67
Information about performance obligations: none.
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not fully performed yet
was RMB0.00 at the period-end, among which RMB0.00 was expected to be recognized in XXX, RMB0.00 was expected to be
recognized in XXX, and RMB0.00 was expected to be recognized in XXX.
46. Taxes and surtaxes
Unit: RMB
Item Reporting period Same period of last year
Urban maintenance and construction tax 6,289,033.04 7,809,806.48
Educational fee 2,739,134.65 3,269,199.52
Tax on natural resources 501,124.97 461,899.63
Real estate tax 11,076,205.06 10,749,586.45
Land use tax 4,779,301.36 7,639,050.17
Vehicle and vessel usage tax 44,897.44 47,802.52
Stamp duty 1,184,777.08 1,545,453.42
Local education surcharge 1,826,088.21 2,364,499.69
Environmental protection tax 684,824.01 473,062.48
Total 29,125,385.82 34,360,360.36
Other notes:
Please refer to Note VI. Taxes for details of various taxes and additional standards for calculation and payment.
47. Administrative expense
Unit: RMB
Item Reporting period Same period of last year
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Lu Thai Textile Co., Ltd. Interim Report 2024
Salary 77,230,152.38 80,911,708.29
Depreciation charge 20,703,778.67 19,438,392.08
Warehouse funding 18,344,401.07 18,862,735.72
Labor-union expenditure 5,236,534.53 5,566,260.80
Employee education budget 3,801,648.86 3,894,091.42
Amortization of intangible assets 6,729,562.66 5,795,577.62
Carriage charges 4,767,761.97 3,694,751.74
Others 21,991,320.55 37,144,843.72
Total 158,805,160.69 175,308,361.39
48. Selling expense
Unit: RMB
Item Reporting period Same period of last year
Salary 32,065,926.42 33,546,461.28
Marketing expenses 16,111,399.23 16,171,875.20
Depreciation charge 3,344,566.64 3,510,556.38
Travel expenses 3,231,195.05 3,906,192.17
Office cost 5,569,616.81 7,315,422.95
Others 2,964,017.13 1,960,739.32
Total 63,286,721.28 66,411,247.30
49. R&D expense
Unit: RMB
Item Reporting period Same period of last year
Labor cost 63,810,510.13 74,856,472.66
Material expense 32,672,913.93 36,990,187.47
Depreciation charge 9,704,000.88 8,755,526.54
Other 9,187,172.25 10,687,845.37
Total 115,374,597.19 131,290,032.04
50. Financial costs
Unit: RMB
Item Reporting period Same period of last year
Interest expense 50,759,962.29 49,206,191.44
Less: Capitalized interest expense 2,028,489.95 9,703,751.96
Interest income 24,797,577.49 30,385,764.22
Foreign exchange gains or losses -22,788,175.63 -70,727,318.85
Other 3,103,872.71 4,603,167.24
Total 4,249,591.93 -57,007,476.34
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Lu Thai Textile Co., Ltd. Interim Report 2024
51. Other income
Unit: RMB
Sources Reporting period Same period of last year
Government grants 11,197,161.62 6,960,772.36
Transfer of deferred revenue to
3,731,952.21 20,764,150.04
government grants
Total 14,929,113.83 27,724,922.40
52. Gain on changes in fair value
Unit: RMB
Sources Reporting period Same period of last year
Trading financial assets -78,608,823.48 -31,900,187.41
Of which: Income from changes in fair value generated
-4,942,381.29 -10,603,652.37
by derivative financial instruments
Trading financial liabilities -33,931,003.79 -10,571,518.40
Total -112,539,827.27 -42,471,705.81
53. Investment income
Unit: RMB
Item Reporting period Same period of last year
Long-term equity investment income
8,619,094.53 -1,333,148.86
accounted by equity method
Investment income from disposal of
-11,908,540.91 48,131,810.86
held-for-trading financial asset
Total -3,289,446.38 46,798,662.00
54. Credit impairment loss
Unit: RMB
Item Reporting period Same period of last year
Loss on uncollectible notes receivable -331,749.55 0.00
Loss on uncollectible accounts
891,673.39 14,959,740.60
receivable
Loss on uncollectible other receivables 27,530.58 1,849,983.45
Total 587,454.42 16,809,724.05
55. Asset impairment loss
Unit: RMB
Item Reporting period Same period of last year
I. Inventory falling price loss and impairment
-34,719,445.19 -75,665,553.95
provision for contract performance costs
Total -34,719,445.19 -75,665,553.95
141
Lu Thai Textile Co., Ltd. Interim Report 2024
56. Asset disposal income
Unit: RMB
Sources Reporting period Same period of last year
Fixed asset disposal income ("-" for loss) -232,868.16 -404,759.16
57. Non-operating income
Unit: RMB
Amount recorded in the current
Item Reporting period Same period of last year
non-recurring profit or loss
Claim income 2,268,221.27 2,140,794.59
Other 609,798.53 2,090,456.30
Total 2,878,019.80 4,231,250.89
58. Non-operating expense
Unit: RMB
Amount recorded in the current
Item Reporting period Same period of last year
non-recurring profit or loss
Donations 699,531.71 438,626.02
Other 1,667,153.49 2,025,734.51
Total 2,366,685.20 2,464,360.53
59. Income tax expense
(1) List of income tax expense
Unit: RMB
Item Reporting period Same period of last year
Current income tax expense 20,223,864.33 10,575,366.34
Deferred income tax expense -1,359,058.54 10,416,049.17
Total 18,864,805.79 20,991,415.51
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Reporting period
Profit before taxation 192,900,052.42
Current income tax expense accounted at statutory/applicable
28,935,007.86
tax rate
Influence of applying different tax rates by subsidiaries 5,809,810.29
Influence of income tax before adjustment -1,045,158.00
Effect of deductible temporary differences or deductible losses
-3,956,472.26
on deferred income tax assets not recognized in the period
Influence of additional deduction of R&D expenses -10,878,382.10
Income tax expense 18,864,805.79
142
Lu Thai Textile Co., Ltd. Interim Report 2024
60. Other Comprehensive Income
Refer to Note VII-41 for details.
61. Cash flow statement
(1) Cash related to operating activities
Cash generated from other operating activities
Unit: RMB
Item Reporting period Same period of last year
Government subsidy 3,216,502.43 21,278,038.60
Claim income 2,414,067.12 1,680,611.12
Recovery of employee borrowings, petty cash
8,194,771.46 5,065,850.80
and deposit
Collection for employees 346,822.55 1,913,782.89
Others 1,069,421.84 38,176,145.58
Total 15,241,585.40 68,114,428.99
Cash used in other operating activities
Unit: RMB
Item Reporting period Same period of last year
Business travel charges 18,759,630.87 24,090,673.70
Insurance 3,018,009.97 2,214,458.96
Agency service fee 7,462,933.03 3,463,173.10
Decoration & repair expenses 6,256,818.44 1,205,617.14
Donation 689,277.94 954,843.00
Payment of employee borrowings, petty
6,682,473.24 5,533,763.00
cash and deposit
Others 30,033,350.44 29,917,190.98
Total 72,902,493.93 67,379,719.88
(2) Cash related to investing activities
Cash generated from other investing activities
Unit: RMB
Item Reporting period Same period of last year
Interest income 25,561,955.08 21,207,422.84
Income from forward foreign exchange 623,600.00 16,005,350.00
Recovery of cash deposit 1,457,909.57 805,891.25
Recovery of fixed time deposits 25,054,958.83 23,179,142.80
Proceeds from financing securities 2,394,104.88
Total 55,092,528.36 61,197,806.89
Cash generated from important investing activities
Unit: RMB
Item Reporting period Same period of last year
Government bond reverse repo 140,961,000.00 1,131,816,000.00
143
Lu Thai Textile Co., Ltd. Interim Report 2024
Structural deposits 226,000,000.00 314,000,000.00
Wealth management products 80,000,000.00
Total 366,961,000.00 1,525,816,000.00
Cash used in other investing activities
Unit: RMB
Item Reporting period Same period of last year
Fixed time deposits 184,000,000.00 2,506,369.87
Forward settlement exchange loss 3,380,600.00
Payment of deposit 1,387,667.04
Total 187,380,600.00 3,894,036.91
Cash used in significant investing activities
Unit: RMB
Item Reporting period Same period of last year
Government bond reverse repo 90,000,000.00 1,151,818,000.00
Structural deposits 226,000,000.00 629,000,000.00
Wealth management products 150,000,000.00
Total 466,000,000.00 1,780,818,000.00
(3) Cash Related to Financing Activities
Cash used in other financing activities
Unit: RMB
Item Reporting period Same period of last year
Repayment of lease liabilities and
9,319,173.11 9,505,516.17
prepaid rent
Repurchase of B-shares 37,825,078.13
Total 47,144,251.24 9,505,516.17
Changes in liabilities arising from financing activities
Applicable □ Not applicable
Unit: RMB
Increase for the current period Decrease for the current period
Item Beginning balance Non-cash Non-cash Ending balance
Cash fluctuations Cash fluctuations
fluctuations fluctuations
Short-
term 580,704,772.27 551,971,451.53 2,822,842.62 535,641,270.74 1,228,525.22 598,629,270.46
loan
Long-
term 348,922,974.40 760,660,043.27 4,648,004.83 391,549,061.37 722,681,961.13
loans
Bonds
payabl 1,476,572,070.79 26,598,701.96 20,997,730.50 700.00 1,482,172,342.25
e
Lease
liabilit 93,857,416.90 21,709,794.02 8,942,488.05 106,624,722.87
ies
Total 2,500,057,234.36 1,312,631,494.80 55,779,343.43 957,130,550.66 1,229,225.22 2,910,108,296.71
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62. Supplemental information for cash flow statement
(1) Supplemental information for cash flow statement
Unit: RMB
Amount during the Same period of last
Supplemental information
current period year
1. Reconciliation of net profit to net cash flows generated from operating activities
Net Profit 174,035,246.63 209,763,134.43
Add: Provision for impairment of assets 34,131,990.77 58,855,829.90
Depreciation of fixed assets, oil-gas assets, and productive biological assets 239,784,009.94 247,686,260.65
Depreciation of right-of-use assets 12,660,992.42 12,250,817.48
Amortization of intangible assets 5,350,029.52 5,551,488.76
Amortization of long-term prepaid expenses 671,332.62 605,167.80
Losses from disposal of fixed assets, intangible assets and other long-lived assets
-232,868.16 -404,759.16
(gains: negative)
Losses from scrap of fixed assets (gains: negative)
Losses from changes in fair value (gains represented by "-") 112,539,827.27 42,471,705.81
Finance costs (gains: negative) 1,145,719.22 -61,610,643.58
Investment loss (gains represented by "-") 3,289,446.38 -46,798,662.00
Decrease in deferred income tax assets (gains: negative) -21,157.44 10,213,915.11
Increase in deferred income tax liabilities ("-" means decrease) -8,467,151.35 -1,011,200.04
Decrease in inventory (gains: negative) -27,021,239.55 -136,941,690.32
Decrease in accounts receivable generated from operating activities (gains represented
101,833,736.62 70,267,472.18
by "-")
Increase in accounts payable used in operating activities (decrease represented by "-") -198,278,262.20 -262,288,620.04
Others
Net cash flow from operating activities 451,421,652.69 148,610,216.98
2. Significant investing and financing activities without involvement of cash receipts
and payments
Conversion of debt to capital
Convertible corporate bonds matured within one year
Fixed asset under finance lease
3. Net increase/decrease of cash and cash equivalent:
Closing balance of cash 1,651,175,499.97 1,289,867,784.05
Less: Opening balance of cash 1,353,615,305.93 1,822,897,270.16
Plus: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 297,560,194.04 -533,029,486.11
(2) Cash and cash equivalents
Unit: RMB
Item Ending balance Beginning balance
145
Lu Thai Textile Co., Ltd. Interim Report 2024
I. Cash 1,651,175,499.97 1,353,615,305.93
Including: Cash on hand 6,112,136.39 2,633,018.72
Bank deposits on demand 1,644,811,250.37 1,079,820,776.67
Other monetary assets on demand 252,113.21 271,161,510.54
III. Ending balance of cash and cash equivalents 1,651,175,499.97 1,353,615,305.93
63. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Closing foreign currency Ending balance converted to
Item Exchange rate
balance RMB
Monetary capital
Of which: USD 107,875,142.77 7.1268 768,804,567.49
EUR 267,020.24 7.6617 2,045,828.97
HKD 425,531.80 0.9127 388,382.87
JPY 6,248,113.00 0.0447 279,290.65
GBP 57.18 9.0430 517.08
Dong 92,455,628,509.00 0.0003 27,736,688.55
MMK 1,767,692,887.54 0.0034 6,010,155.82
Riel 690,222,041.00 0.0017 1,173,377.47
Accounts receivable
Of which: USD 77,427,161.79 7.1268 551,807,896.64
EUR 133,289.94 7.6617 1,021,227.53
HKD
Dong 12,883,056,313.00 0.0003 3,864,916.89
MMK 365,746,398.78 0.0034 1,243,537.76
Long-term borrowings
Of which: USD
EUR
HKD
Other receivables:
Of which: USD 1,738,515.89 7.1268 12,390,055.04
EUR 28,700.00 7.6617 219,890.79
HKD 145,549.00 0.9127 132,842.57
JPY 2,548,040.00 0.0447 113,897.39
Dong 4,428,556,372.00 0.0003 1,328,566.91
MMK 113,900,600.00 0.0034 387,262.04
Accounts payable:
Of which: USD 6,639,755.29 7.1268 47,320,208.00
EUR 70,673.00 7.6617 541,475.32
JPY 23,950,590.00 0.0447 1,070,591.37
CHF 4,400.00 7.9471 34,967.24
Dong 34,114,626,928.80 0.0003 10,234,388.08
MMK 25,366,340.90 0.0034 86,245.56
Other payables:
Of which: Dong 305,566,528.00 0.0003 91,669.96
MMK 1,030,000.00 0.0034 3,502.00
Short-term borrowings:
146
Lu Thai Textile Co., Ltd. Interim Report 2024
Of which: USD 79,625,169.75 7.1268 567,472,659.77
Dong 66,431,701,942.00 0.0003 19,929,510.58
(2) Notes to overseas entities including: for significant oversea entities, main operating place, recording
currency and selection basis shall be disclosed; if there are changes in recording currency, relevant
reasons shall be disclosed.
Applicable □Not applicable
The operating places of the Company's subsidiaries were Hong Kong, Burma, America, Vietnam, Singapore and Cambodia, and
the recording currency was HKD for Hong Kong and USD for other overseas companies.
64. Leases
(1) The Company Was Lessee:
Applicable □ Not applicable
Variable lease payments that are not covered in the measurement of the lease liabilities
□Applicable Not applicable
Simplified short-term lease or lease expense for low-value assets
Applicable □ Not applicable
Item Amount for the current period
Expense relating to short-term leases 99,113.33
Low-value lease expenses
Variable lease payments that are not covered in the measurement of the
lease liabilities
Total 99,113.33
(2) The Company Was Lessor:
Operating leases with the Company as lessor
Applicable □ Not applicable
Unit: RMB
Of which: Income related to variable
Item Rental income lease payments not included in lease
receipts
Rental income 1,677,429.22 0.00
Total 1,677,429.22 0.00
Finance leases with the Company as lessor
□Applicable Not applicable
Undiscounted lease receipts for each of the next five years
Applicable □ Not applicable
Unit: RMB
Undiscounted lease receipts per year
Item Investments at the beginning of the
Investments at the end of the period
period
147
Lu Thai Textile Co., Ltd. Interim Report 2024
The first year 1,419,202.00 1,215,336.80
The second year 510,993.00 310,390.00
The third year 15,254.40
(3) Recognition of Gain or Loss on Sales under Finance Leases with the Company as a Manufacturer or
Distributor
□Applicable Not applicable
VIII. Research and Development Expenditure
Unit: RMB
Item Amount for the current period Amount for the previous period
Labor cost 63,810,510.13 74,856,472.66
Material expense 32,672,913.93 36,990,187.47
Depreciation charge 9,704,000.88 8,755,526.54
Others 9,187,172.25 10,687,845.37
Total 115,374,597.19 131,290,032.04
Of which: Expensed research and
115,374,597.19 131,290,032.04
development expenditure
IX. Change of Consolidation Scope
1. Disposal of Subsidiary
Whether there were any transactions or events during the period in which control of the subsidiary was lost
□Yes No
Whether there was a step-by-step disposal of investment in a subsidiary through multiple transactions and loss of control during
the current period
□Yes No
2. Other reasons for changes of consolidation scope
Notes of other changes in the combination scope (e.g., new subsidiaries, liquidation of subsidiaries, etc.) and relevant situations:
There were no changes in the consolidation scope of the Company during the Reporting Period.
X. Equity in Other Entities
1. Equity in Subsidiary
(1) Compositions of the Group
Unit: RMB
Holding percentage
Main
Registered Registrati Nature of (%) Way of
Name operatin
capital on place business Indirectl gaining
g place Directly
y
Lu Thai (Hong Kong) Textile 128,771,800.00 Hong Hong Wholesale and 100.00% Set-up
148
Lu Thai Textile Co., Ltd. Interim Report 2024
Co., Ltd. (hereinafter referred Kong Kong retail industry
to as "Lu Thai (HK)")
Shanghai Lu Thai Textile
Garment Co., Ltd. (hereinafter Shangh Wholesale and
20,000,000.00 Shanghai 100.00% Set-up
referred to as "Shanghai Lu ai retail industry
Thai")
LuFeng Company Limited
Manufacturing
(hereinafter referred to as 706,160,000.00 Zibo Zibo 75.00% Set-up
industry
"LuFeng Company")
Zibo Luqun Textile Co., Ltd.
Manufacturing
(hereinafter referred to as 168,220,000.00 Zibo Zibo 100.00% Set-up
industry
"Luqun Textile")
Business
Zibo Xinsheng Thermal Power combinati
Co., Ltd. (hereinafter referred Manufacturing on not
162,435,600.00 Zibo Zibo 100.00%
to as "Xinsheng Thermal industry under the
Power") same
control
Technology
Shanghai Zhinuo Textile New development,
Materials Co., Ltd. Shangh technical
100,000,000.00 Shanghai 100.00% Set-up
(hereinafter referred to as ai consultancy and
"Shanghai Zhinuo") transfer of
technologies
Shandong Lulian New
Materials Co., Ltd. Manufacturing
400,000,000.00 Zibo Zibo 75.00% Set-up
(hereinafter referred to as industry
"Lulian New Materials")
Shandong Lujia IMP. & EXP.
Import and
Co., Ltd. (hereinafter referred 10,000,000.00 Zibo Zibo 100.00% Set-up
export trade
to as "Lujia IMP. & EXP.")
Beijing Zhishu Management
Consulting Co., Ltd. Management
3,000,000.00 Beijing Beijing 100.00% Set-up
(hereinafter referred to as consulting
"Zhishu Consulting")
Lu Thai Occupational
100,000.00 Zibo Zibo Skill training 100.00% Set-up
Training School
Zibo Banyang Villa Hotel Co.,
Ltd. (hereinafter referred to as 5,000,000.00 Zibo Zibo Catering services 100.00% Set-up
"Banyang Villa")
Hainan Huilin International
Wencha Wenchan Modern service
Holdings Co., Ltd. ("Huilin 880,000,000.00 100.00% Set-up
ng g industry
International")
Wholesale
Singapo Singapor textiles and
TP Company 398,203,876.00 100.00% Set-up
re e leather, holding
company
Vanguard Apparel Co., Ltd.
Manufacturing
(hereinafter referred to as 62,337,887.93 Burma Burma 100.00% Set-up
industry
"Vanguard Apparel")
Lu Thai (USA) Textile Co.,
Americ Wholesale and
Ltd. (hereinafter referred to as 6,139,710.00 America 100.00% Set-up
a retail industry
"Lu Thai (USA)")
Yuanhui Dividend No. 2
Private Securities Investment 100.00% Subscribe
Fund ("Yuanhui Fund")
Basis of controlling significant structural entities incorporated in the scope of combination:
The structural entity incorporated in the scope of consolidation of the Group is Yuanhui Dividend No. 2 Private Securities
Investment Fund. The Group assesses its share of investment holdings, the power it enjoys and variable returns comprehensively
and includes the structural entity that the Company has control power into the consolidation scope.
149
Lu Thai Textile Co., Ltd. Interim Report 2024
(2) Significant non-wholly-owned subsidiary
Unit: RMB
Shareholding
The profit or loss Declaring dividends
proportion of Balance of non-controlling
Name attributable to the non- distributed to non-controlling
non-controlling interests at the period-end
controlling interests interests
interests
Lufeng
Company 25.00% 10,448,552.82 371,359,873.15
Limited
Lulian New
25.00% -5,973,275.73 19,776,495.84
Materials
(3) The main financial information of significant not wholly-owned subsidiary
Unit: RMB
Ending balance Beginning balance
Curren Non- Curren Non-
Name Non- Total Non- Total
Curren Total t current Curren Total t current
current liabiliti current liabiliti
t assets assets liabiliti liabilit t assets assets liabiliti liabilit
assets es assets es
es y es y
Lufeng
Compa 1,002, 634,54 1,636, 91,752 52,426 144,17 925,17 666,35 1,591, 89,644 53,272 142,91
ny 124,04 9,037. 673,08 ,027.3 ,432.2 8,459. 0,025. 1,350. 521,37 ,274.8 ,778.4 7,053.
Limite 3.58 14 0.72 1 2 53 16 97 6.13 3 7 30
d
Lulian 97,975 555,50 653,47 571,33 574,40 83,522 568,10 651,62 545,64 548,72
New 3,073, 3,082,
,733.6 4,179. 9,913. 0,312. 4,150. ,389.7 3,983. 6,373. 1,487. 4,016.
Materi 837.69 529.50
als 3 63 26 81 50 8 74 52 47 97
Unit: RMB
Reporting period Same period of last year
Total Cash flows Total Cash flows
Name Operating comprehen from Operating comprehen from
Net profit Net profit
revenue sive operating revenue sive operating
income activities income activities
Lufeng
Compa
43,872,724. 43,890,298. 131,109,72 630,672,25 6,009,887.3 5,998,315.2 111,673,71
ny 642,748,692.32
Limite 61 36 0.07 8.24 7 4 9.55
d
Lulian - - - - - -
New 59,510,967.
54,051,010.62 23,833,476. 23,826,593. 5,114,273.6 57,542,354. 57,542,354. 50,620,961.
Materi 89
als 77 79 0 11 11 20
2. Equity in joint ventures or associated enterprises
(1) Significant joint ventures or associated enterprises
Holding percentage (%) Accounting
treatment of the
Main operating Registration Nature of investment to
Name
place place business Directly Indirectly joint venture or
associated
enterprise
I. Joint ventures
II. Associated
enterprises
150
Lu Thai Textile Co., Ltd. Interim Report 2024
Haohong Equity
Ningbo Ningbo 33.33% Equity method
Investment investment
Haoying Equity
Ningbo Ningbo 47.62% Equity method
Investment investment
(2) Main financial information of significant associated enterprises
Unit: RMB
Beginning balance/the same period of last
Ending balance/reporting period
year
Haohong Investment Haoying Investment Haohong Investment Haoying Investment
Current assets 4,483,167.29 1,804,930.34 7,472,853.32 3,415,493.18
Non-current assets 171,240,419.76 206,920,000.00 140,550,000.00 206,920,000.00
Total assets 175,723,587.05 208,724,930.34 148,022,853.32 210,335,493.18
Current liabilities 3,253,866.05 3,253,866.05
Non-current liability
Total liabilities 3,253,866.05 3,253,866.05
Net assets 172,469,721.00 208,724,930.34 144,768,987.27 210,335,493.18
Equity of non-controlling
interests
Equity attributable to
shareholders of the Company as 172,469,721.00 208,724,930.34 144,768,987.27 210,335,493.18
the parent
Net assets shares calculated at the
57,490,354.26 99,394,811.83 48,257,699.71 100,161,761.85
shareholding proportion
Adjusted items
- Goodwill
- Unrealized profit of internal
transactions
- Others -4,728,591.79 -4,881,981.79
Carrying value of investment to
57,490,354.26 94,666,220.04 48,257,699.71 95,279,780.06
associated enterprises
Fair value of equity investments
in associated enterprises with
publicly quoted prices
Operating Revenue
Net profit 27,700,733.73 -1,610,562.84 -1,053,910.87 -2,577,384.40
Net profit from discontinued
operations
Other comprehensive income
Total comprehensive income 27,700,733.73 -1,610,562.84 -1,053,910.87 -2,577,384.40
Dividends received from the
associates in the current period
XI. Government Grants
1. Government Grants Recognized at the End of the Reporting Period at the Amount Receivable
□Applicable Not applicable
Reasons for failing to receive government grants in the estimated amount at the estimated point in time
□Applicable Not applicable
2. Liability Items Involving Government Grants
□Applicable Not applicable
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Lu Thai Textile Co., Ltd. Interim Report 2024
3. Government Grants Included in Deferred Income
Applicable □Not applicable
Unit: RMB
Accounting items Amount for the current period Amount for the previous period
Other income 14,929,113.83 27,724,922.40
Finance costs 84,024.92 83,416.67
XII. Risks Associated with Financial Instruments
1. Various Types of Risks Arising from Financial Instruments
The Company's major financial instruments include monetary capital, notes receivable, accounts receivable, accounts receivable
financing, other receivables, other current assets, trading financial assets, investment in debt obligations, other non-current
financial assets, long-term receivables, notes payable, accounts payable, other payables, short-term borrowings, current portion of
non-current liabilities, long-term borrowings, bonds payable, and lease liabilities. Details of various financial instruments are
disclosed in relevant Notes. Risks related to these financial instruments, and risk management policies the Company has adopted
to reduce these risks are described as follows. The Company management manages and monitors the risk exposure to ensure the
above risks are controlled in a limited scope.
1. Risk management objectives and policies
The Company has conducted the risk management to achieve an appropriate balance between the risk and the income and to
minimize the adverse influence of financial risks on the Company’s financial performance. According to such risk management
objective, the Company has formulated corresponding risk management policy to recognize and analyze possible risks
encountered by the Company, set the appropriate acceptable risk level and designed corresponding internal control procedures to
monitor the Company’s risk level. Meanwhile, the Company will regularly review these risk management policies and relevant
internal control system so as to cater for the market or respond to any change in the Company’s business operations. Accordingly,
the Company’s internal audit department will also regularly or randomly check whether the internal control system is implemented
in conformity with relevant risk management policies.
The major risks caused by financial instruments of the Company are credit risk, liquidity risk and market risk (including foreign
exchange risk and interest rate risk).
The Board of Directors shall be responsible for planning and establishing the risk management framework for the Company,
determining the Company’s risk management policies and relevant guidelines and monitoring the implementation of various risk
management measures. However, the Company has established corresponding risk management policies to recognize and analyze
possible risks encountered by the Company. Besides, various risks are specified in these risk management policies, including the
credit risk, the liquidity risk and the market risk management etc. On a regular basis, the Company will evaluate the specific
marketing environment and various changes in the Company’s business operations so as to determine whether any risk
management policy and system need be updated.
(1) Credit risk
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Credit Risk means that the Company will suffer any financial losses due to the counter party’s failure in fulfilling the contract
obligations.
The Company shall manage the credit risk based on the specific Group Classification, and the credit risk mainly arises from bank
deposit, notes receivable, accounts receivable, other receivables and long-term receivables etc.
The Group’s bank deposits are mainly saved in state-owned banks and other large and medium-sized listed banks. The Group’s
bank deposits are expected not to suffer any major credit risks.
For notes receivable, accounts receivable, other accounts receivable and long-term receivables, the Company has established
relevant policies to control the credit risk exposure. According to the client’s financial status, credit record and other factors
(including the current market condition), the Company will evaluate the client’s credit qualification and set corresponding credit
period. The Company regularly monitors the credit records of customers. For customers with bad credit records, the Company
adopted corresponding methods, such as written pressing for payment, shortening credit period, and canceling credit period, so as
to ensure the Company's overall credit risk is controllable.
The hugest credit risk exposure borne by the Company is the book value of each financial asset reflected in the balance sheet.
In terms of accounts receivable, the top 5 customers in accounts receivable were accounted for 27.87% of the total amount of
accounts receivable of the Company (24.80% in 2023). As for other receivables, the top 5 of the ending balance according to the
arrears party was accounted for 61.40% of the total amount of other receivables of the Company (69.38% in 2023).
Investment in debt obligations
The Group supervised the changes of credit risk through tracking the published external credit ratings. In order to make sure
whether the credit rating was the latest, and whether the credit risk has increased obviously of evaluation report date but not been
reflected in the published external ratings, the Company has supplemented through examining the changes of bond yield and the
available news and supervision information.
On the balance sheet date, the carrying value of investment in debt obligations of the Company are listed as follows according to
report items. (Unit: RMB’0,000)
2024.6.30 2023.12.31
Trading Financial Assets 30,343.25 20,370.67
Total 30,343.25 20,370.67
(2) Liquidity risk
Liquidity Risk refers to the risk of capital shortage encountered by the Company during the cash payment or the settlement of
other financial assets.
During the management of liquidity risk, the Company shall reserve and monitor corresponding cash and cash equivalent deemed
sufficient by the management so as to meet the Company’s operational requirements and mitigate the impact caused by the cash
flow fluctuation. The Group’s management will monitor the use of bank loans and guarantee the fulfillment of loan agreement.
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Meanwhile, major financial institutions shall promise to provide the Group with sufficient reserve funds in order to satisfy the
short-term and long-term fund demand. The Group shall raise its working capital based on the capital generated from business
operations and bank loans.
(3) Market risk
The financial instrument’s market risk refers to the fluctuation risk of fair value of financial instrument or future cash flow caused
by the changes of market price, including the interest rate risk and the exchange rate risk.
Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flows of financial instruments arising from changes
in market interest rates. The interest rate can derive from the recognized interest-bearing financial instruments and unrecognized
financial instruments (including certain loan commitment).
The Company’s interest rate risk mainly arises from the bank loan and bonds payable. Financial liabilities based on the floating
interest rate will cause the cash flow interest rate risk to the Company, and financial liabilities based on the fixed interest rate the
fair value interest rate risk.
However, the Company has paid close attention the impact of interest rate fluctuations on the Company’s interest rate risk. At
present, the Company has not taken any interest rate hedging measures. The rise of interest rate will increase the cost of newly-
added interest-bearing debts and the interest cost of the Company’s unsettled interest-bearing debts based on the floating interest
rate, and cause major adverse influence on the Company’s financial performance. The management will timely make
corresponding adjustment according to the latest market situation, and corresponding interest rate swap will be arranged to reduce
the interest rate risk.
The interest-bearing financial instruments held by the Company are as follows (Unit: RMB’0,000):
31 December
Item 30 June 2024
2023
Fixed-interest financial instruments
Including: short-term borrowings 54,830.44 46,535.28
Current portion of long-term borrowings 882.64 230.00
Long-term borrowings 10,623.36 6,174.19
Bonds Payable 148,217.23 147,657.21
Total 214,553.67 200,596.68
Floating-interest financial instruments
Financial assets 30,343.25 20,370.67
Including: trading financial assets 30,343.25 20,370.67
Financial liabilities 65,681.26 40,023.31
Including: short-term borrowings 4,981.26 11,535.20
Current portion of long-term borrowings 750.00 8,663.00
Long-term borrowings 59,950.00 19,825.11
Total 96,024.51 60,393.98
On 30June 2024, if the lending rate calculated at floating interest rate up or down 100 basis points with other variables unchanged,
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Lu Thai Textile Co., Ltd. Interim Report 2024
the net profit and shareholders’ equity will be decreased or increased about RMB5,657,600.
On 30June 2024, if the floating interest rate of held-for-trading financial assets up or down 100 basis points with other variables
unchanged, the net profit and shareholders’ equity will be decreased or increased about RMB2,579,200.
Foreign exchange risk
Foreign exchange risk is referred to the fluctuation risk of fair value of financial instruments or future cash flows resulted from the
change of foreign exchange rate. The foreign exchange rate was originated from the financial instruments denominated in foreign
currencies other than the recording currency.
On 30June 2024, the amount of foreign currency financial assets and foreign currency financial liabilities converted to renminbi is
as follows (Unit: RMB’0,000):
Foreign currency liabilities Foreign currency assets
Item
Period-end Period-begin Period-end Period-begin
USD 61,479.29 61,952.45 133,300.25 121,933.38
EUR 54.15 154.36 328.69 386.82
JPY 107.06 248.23 39.32 123.83
HKD 52.12 2,124.70
GBP 0.05 0.05
CHF 3.50 0.01
Dong 3,025.56 5,439.51 3,293.02 6,351.53
MMK 8.97 22.97 764.10 292.27
Riel 117.34 13.27
Total 64,678.53 67,817.52 137,894.89 131,225.86
The Group has paid close attention the impact of exchange rate fluctuations on the Group’s exchange rate risk. As at the end of
each reporting period, for the Group's monetary capital, bills receivable, accounts receivable, accounts payable, short-term
borrowings and long-term borrowings denominated in foreign currencies, assuming a 10% appreciation or depreciation of RMB
against foreign currencies, while other factors remain unchanged, the impact of possible reasonable changes in the Company's
foreign currency exchange rate against RMB on the Company's profit and loss for the current period is as follows (Unit:
RMB’0,000):
Reporting Period The same period of last year
Exchange rate
fluctuations Impact on after-tax Impact on Impact on after-tax Impact on
profit shareholders' equity profit shareholders' equity
10% appreciation
against RMB -5,706.30 -5,706.30 -4,202.10 -4,202.10
10% depreciation
against RMB 5,706.30 5,706.30 4,202.10 4,202.10
2. Capital management
The objectives of capital management policies of the Company are to ensure the continuous operation of the Company so as to
provide return to shareholders and benefit other stakeholders, as well as to reduce capital cost by maintaining the optimal capital
structure.
In order to maintain or adjust capital structure, the Company might adjust financing method and the dividends paid to shareholders,
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Lu Thai Textile Co., Ltd. Interim Report 2024
return capital to shareholders, issue new shares and other equity instrument or sell assets to reduce debts.
The Group supervised the capital structure based on the asset-liability ratio (namely total liabilities divide total assets). On 30 June
2024, the asset-liability ratio was 29.58% of the Company (28.39% on 31 December 2023).
XIII. Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Closing fair value
Item Fair value Fair value Fair value
measurement items measurement items measurement items Total
at level 1 at level 2 at level 3
I. Consistent fair value
-- -- -- --
measurement
(I) Held-for-trading financial assets 169,269,048.00 572,341,759.34 741,610,807.34
1. Financial assets at fair value
169,269,048.00 572,341,759.34 741,610,807.34
through profit or loss
(1) Investment in debt instruments 303,432,546.27 303,432,546.27
(2) Equity investments 169,269,048.00 267,608,462.83 436,877,510.83
(3) Derivative financial assets 1,300,750.24 1,300,750.24
(VI) Accounts receivable financing 6,922,213.41 6,922,213.41
(VII) Other non-current financial
88,750,000.00 88,750,000.00
assets
The total amount of assets
169,269,048.00 572,341,759.34 95,672,213.41 837,283,020.75
consistently measured at fair value
(VI) Held-for-trading financial
80,716,835.26 80,716,835.26
liabilities
Derivative financial liabilities 80,716,835.26 80,716,835.26
The total amount of liabilities
80,716,835.26 80,716,835.26
consistently measured at fair value
Derivative financial liabilities -- -- -- --
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at
Level 1
The Company determines the fair value of shares of listed companies based on the price on the open market.
3. Valuation technique adopted and nature and amount determination of important parameters for
consistent and inconsistent fair value measurement items at level 2
The Company determines the fair value of wealth management products based on the prospective earning rate as agreed in the
contract.
The Company determines the fair value of fund products based on the net value published by fund managers.
The Company determines the fair value of forward options based on bank forward foreign exchange quotations at the end of the
period.
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Lu Thai Textile Co., Ltd. Interim Report 2024
4. Valuation technique adopted and nature and amount determination of important parameters for
consistent and inconsistent fair value measurement items at level 3
For the unlisted equity investment, the Company adopts the comparable listed company comparison method, and the non-
observable input value of the comparable listed company comparison method includes the liquidity discount.
The investment into Shandong Hongqiao Thermoelectric Co., Ltd. made by Luqun Textile (the Company’s subsidiary) is expected
to be held in the long run for obtaining the discount on power purchase. As no revenue distribution right is vested in the
investment, the invested unit’s operating profit and loss are not shared or borne, and the equity transfer is not proposed, the
Company regards it as the financial asset which shall be measured based on the fair value and whose variations are included in the
current profit and loss, and the investment cost is deemed as the fair value of the financial asset.
For accounts receivables financing at fair value and the changes included in other comprehensive income, its fair value shall be
determined by the discount cash flow method.
5. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
The financial assets and financial liabilities measured at amortized cost mainly include monetary assets, notes receivable, accounts
receivable, other receivables, short-term borrowings, notes payable, accounts payables, other payables, current portion of long-
term borrowings, long-term borrowings, and bonds payable.
XIV. Related Party and Related-party Transactions
1. Information related to the company as the parent of the Company
Proportion of voting rights
Registr Proportion of share held by
Registered owned by the company as
Name ation Nature of business the company as the parent
capital the parent against the
place against the company (%)
company (%)
Lucheng Textile, chemistry and RMB63,260
Zibo 17.17% 17.17%
Textile investment ,000
Notes: information on the Company as the parent
The final controllers of the Company are Mr. Liu Zibin and Mr. Liu Deming.
2. Subsidiaries of the Company
Refer to Note X-1.
3. Information on the joint ventures and associated enterprises of the Company
Refer to Note X-2.
4. Information on other related parties
Name Relationship with the company
Zibo Limin Purified Water Co., Ltd. (hereinafter referred to as
Wholly-owned subsidiary of the Company as the parent
"Limin Purified Water")
Zibo Luqun Land Co., Ltd (hereinafter referred to as "Luqun
Wholly-owned subsidiary of the Company as the parent
Land")
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Lu Thai Textile Co., Ltd. Interim Report 2024
Zibo Lurui Fine Chemical Co., Ltd. (hereinafter referred to as
Wholly-owned subsidiary of the Company as the parent
"Lurui Chemical")
Zibo Lujia Property Management Co., Ltd. (hereinafter referred
Wholly-owned subsidiary of the Company as the parent
to as "Lujia Property")
Hong Kong Tung Hoi International Company Limited
Wholly-owned subsidiary of the Company as the parent
(hereinafter referred to as "Tung Hoi International")
Zibo Chengshun Hosiery Co., Ltd. (hereinafter referred to as
Wholly-owned subsidiary of the Company as the parent
"Chengshun Hosiery")
Zibo Chengshun Economic and Trade Co., Ltd. (hereinafter
Wholly-owned subsidiary of the Company as the parent
referred to as "Chengshun Economic and Trade")
Chengshun Petrochemical (Zhoushan) Co., Ltd. (hereinafter
Wholly-owned subsidiary of the Company as the parent
referred to as "Chengshun Petrochemical")
Zibo Lucheng Petrochemical Sales Co., Ltd. (hereinafter
Wholly-owned subsidiary of the Company as the parent
referred to as "Lucheng Petrochemical")
Shanghai Hengjiu Textile New Materials Co., Ltd. (hereinafter
Wholly-owned subsidiary of the Company as the parent
referred to as "Hengjiu Textile")
Shandong Xirui New Material Co., Ltd. (hereinafter referred to Wholly-owned subsidiary of the parent company's wholly-
as "Xirui New Material") owned subsidiary
Zibo Lumei Economic and Trade Co., Ltd. (hereinafter referred
Wholly-owned subsidiary of the Company as the parent
to as "Lumei Economic and Trade")
5. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service
Information on acquisition of goods and reception of labor service
Unit: RMB
Whether
The approval trade exceed Same period of
Related party Content Reporting period
credit trade credit last year
or not
Recycled water, sewage
Limin Purified Water 12,481,784.67 18,960,000.00 Not 13,016,170.41
treatment
Lurui Fine Chemical Auxiliaries 32,529,628.10 40,150,000.00 Not 30,532,002.97
Tung Hoi International Auxiliaries 18,168,676.77 22,500,000.00 Not 18,138,767.89
Paper core, hosiery,
Chengshun Hosiery purchase of materials
4,153,331.37 5,633,333.33 Not 3,511,793.11
and Luqun Property such as hose, electrical,
etc.
Chengshun Economic
Supermarket retail 339,217.59 1,880,000.00 Not 781,733.59
and Trade
Lucheng
Petrochemical Oil 2,080,671.55 3,827,333.33 Not 1,997,076.22
Petrochemical
Chengshun
Oil, natural gas 23,800,279.70 36,625,000.00 Not 25,248,021.93
Petrochemical
Information of sales of goods and provision of labor service
Unit: RMB
Same period of last
Related party Content Reporting period
year
Chengshun
Yarn, yarn-dyed fabric, etc. 246,017.94 211,763.04
Hosiery
Chengshun
Materials, electricity, running water, heating, steam 122,866.93 128,111.06
Hosiery
Chengshun Materials, electricity, running water, yarn, garments, food,
246,399.80 61,083.89
Trading heating, steam
Lucheng
Materials, electricity 6,695.10 6,733.58
Petrochemical
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Lu Thai Textile Co., Ltd. Interim Report 2024
Limin
Materials, electricity, garments, meal service in classes,
Purified 3,983,115.40 2,764,696.42
foods
Water
Lurui Fine
Garments, fabrics, foods 157,715.38 153,643.21
Chemical
Lujia Property Materials, garments 18,563.66 17,773.07
Xirui New
Catering and accommodation service 13,441.51 9,917.94
Materials
Xirui New
Materials, garments, etc. 16,635.31 54,623.19
Materials
Luqun
Materials, garments 365,076.11
Property
Lumei
Economic and Garments 63.72
Trade
(2) Information on related-party lease
The Company was lessor:
Unit: RMB
The lease income confirmed The lease income confirmed
Name of lessee Category of leased assets
in the current period in the same period of last year
Chengshun Economic and
Rent of houses and buildings 40,950.67 36,108.00
Trade
Chengshun Hosiery Rent of houses and buildings 8,400.00 8,400.00
The Company was lessee:
Unit: RMB
Rental expense of Variable lease
simplified short- payments that are
Interest expense on
term leases and not covered in the Added right-of-use
Rent payable lease liabilities
Categor low-value asset measurement of assets
Name borne
y of leases (if the lease liabilities
of applicable) (if applicable)
leased
lessor
assets Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun
t of the t of the t of the t of the t of the t of the t of the t of the t of the t of the
current previou current previou current previou current previou current previou
period s period period s period period s period period s period period s period
Luchen
Rent of 1,807,4 1,807,4 502,383 561,567
g
land 28.60 28.60 .97 .29
Textile
Luchen Rent of
116,571 116,571 50,622. 53,613.
g gas
.42 .42 80 54
Textile station
Luchen Rent of
5,511,1 5,511,1 1,012,5 962,595
g buildin
14.30 14.30 10.71 .71
Textile gs
Rent of
Luqun land
985,714 985,714 549,099 568,899
Propert and
.26 .26 .27 .59
y buildin
gs
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Lu Thai Textile Co., Ltd. Interim Report 2024
6. Accounts receivable and payable of related party
(1) Accounts payable
Unit: RMB
Item Related party Ending carrying amount Beginning carrying amount
Accounts payable Lurui Fine Chemical 398,433.04
Accounts payable Tung Hoi International 110,347.81 5,597,739.70
XV. Stock Payment
1. The overall situation of share-based payments
Applicable □Not applicable
Unit: RMB
Awarded in the Option exercise in Lapsed in the current
Unlocked in the current period
Category of grant current period the current period period
recipients Numb Amoun Numbe Amoun
Number Amount Number Amount
er t r t
Management, core
technical and 9,803,000 9,803,000.00 66,500 66,500.00
business backbone
Total 9,803,000 9,803,000.00 66,500 66,500.00
Stock options or other equity instruments outstanding at the end of the period
□Applicable Not applicable
2. Equity-settled share-based payments
Applicable □Not applicable
Unit: RMB
Methods for determining the fair value of equity instruments on Difference between the market price of the stock and the grant
the grant date price on the grant date
Basis for determining the number of feasible right equity
Optimal estimation of expected feasible right in the future
instruments
Reasons for the significant discrepancy between the current
N/A
period estimates and the previous estimates
Accumulated amount of equity-settled share-based payment
88,054,345.13
included in capital reserves
The total amount of the expense recognized for the current
2,994,814.61
period paid on equity-settled shares
3. Cash-settled share-based payments
□Applicable Not applicable
4. Share-Based Payment Expenses for the Period
Applicable □ Not applicable
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Lu Thai Textile Co., Ltd. Interim Report 2024
Unit: RMB
Category of grant recipients Equity-settled share-based payments Cash-settled share-based payments
Management, core technical and business
2,994,814.61 0.00
backbone
Total 2,994,814.61 0.00
XVI. Commitments and Contingency
1. Significant Commitments
Significant commitments on balance sheet date
Commitments signed but hasn’t been recognized in Ending balance Beginning balance
financial statements (RMB’0,000) (RMB’0,000)
Commitment on constructing and purchasing long-
12,157.12 5,147.75
lived assets
2. Contingency
(1) Significant Contingency on Balance Sheet Date
As at 30 June 2024, the Company provided guarantee to loans of the following subsidiaries:
Name Item Amount (USD) Amount (RMB) Duration Notes
Wholly-owned Subsidiaries Short-term loan 1,309,320.00 9,331,261.79 2023.9.8-2024.9.4
Wholly-owned Subsidiaries Short-term loan 1,711,480.00 12,197,375.66 2023.9.15-2024.9.9
Wholly-owned Subsidiaries Short-term loan 170,429.00 1,214,613.40 2023.9.29-2024.9.23
Wholly-owned Subsidiaries Short-term loan 320,733.00 2,285,799.94 2023.10.5-2024.9.30
Wholly-owned Subsidiaries Short-term loan 102,204.85 728,393.52 2023.10.5-2024.9.30
Wholly-owned Subsidiaries Short-term loan 122,486.00 872,933.22 2023.10.10-2024.10.4
Wholly-owned Subsidiaries Short-term loan 79,513.00 566,673.25 2024.4.24-2024.10.21
Wholly-owned Subsidiaries Short-term loan 2,188,363.67 15,596,030.20 2023.10.30-2024.10.24
Wholly-owned Subsidiaries Short-term loan 345,131.00 2,459,679.61 2023.11.2-2024.10.28
Wholly-owned Subsidiaries Short-term loan 529,342.00 3,772,514.57 2024.5.6-2024.11.2
Total 6,879,002.52 49,025,275.16
(2) Explanation shall be given even if there is no significant contingency for the Company to disclose
There was no significant contingency in the Company to disclose.
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XVII. Events after Balance Sheet Date
1. Distribution of Profit
Amount to be distributed for every ten shares
1.00
(RMB)
Dividend shares to be distributed for every ten
0
shares (share)
Number of shares to be converted into share
0
capital for every ten shares (share)
Amount to be distributed for every ten shares after
1.00
consideration and approval (RMB)
Dividend shares to be distributed for every ten
0
shares after consideration and approval (share)
Number of shares to be converted into share
capital for every ten shares after consideration and 0
approval (share)
On 28 August 2024, the 24th meeting of the 10th Board of Directors of the
Company approved the profit distribution plan for H1 2024 as follows: The
Company plans to distribute a cash dividend of RMB1.00(inclusive of tax)
Profit distribution plan for every 10 shares, based on a capital base of 817,305,896 shares. The total
amount of dividends calculated on this basis is RMB81,730,589.60. The
above distribution plan will be implemented after it is submitted to the 3rd
Extraordinary General Meeting of 2024 for consideration and approval.
2. Notes to other events after balance sheet date
As at 28 August 2024, the Company has no other events after balance sheet date that should be disclosed.
XVIII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Disclosure by aging
Unit: RMB
Aging Ending carrying amount Beginning carrying amount
Within one year (including 1 year) 306,110,656.50 380,684,242.95
One to two years 1,427,439.39 2,423,615.15
Two to three years 216,360.00 13,571.80
More than three years 264,034.12 3,026,023.60
Three to four years 31,034.12 20,913.49
Four to five years 233,000.00 3,005,110.11
Total 308,018,490.01 386,147,453.50
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Lu Thai Textile Co., Ltd. Interim Report 2024
(2) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Categor Withdra Withdra
y Carrying Carrying
Proporti wal value Proporti wal value
amount amount amount amount
on proporti on proporti
on on
Account
s
receivab
le
withdra
wal of 2,823,30 2,823,30 5,481,36 5,481,36
0.92% 100.00% 1.42% 100.00%
Bad debt 9.36 9.36 0.70 0.70
provisio
n
separatel
y
accrued
Of
which:
Account
s
receivab
le
withdra 305,195, 21,385,6 283,809, 380,666, 24,182,6 356,483,
99.08% 7.01% 98.58% 6.35%
wal of 180.65 85.43 495.22 092.80 67.21 425.59
bad debt
provisio
n of by
group
Of
which:
Undue
32,478,6 32,478,6 35,791,8 35,791,8
accounts 10.54% 9.27%
66.50 66.50 68.54 68.54
(L/C)
Undue
accounts
(credit 31,995,3 335,951. 31,659,4 23,003,7 241,539. 22,762,1
10.39% 1.05% 5.96% 1.05%
insuranc 81.13 50 29.63 16.87 03 77.84
e
insured)
Undue
accounts
(no 184,564, 9,228,23 175,336, 275,912, 13,795,6 262,116,
59.92% 5.00% 71.45% 5.00%
credit 647.94 2.39 415.55 255.37 12.77 642.60
insuranc
e)
Overdue
accounts 23,690,0 3,719,33 19,970,7 15,309,1 2,403,53 12,905,6
7.69% 15.70% 3.96% 15.70%
(credit 58.36 9.16 19.20 59.83 8.09 21.74
insuranc
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Lu Thai Textile Co., Ltd. Interim Report 2024
e
insured)
Overdue
accounts
(no 32,466,4 8,102,16 24,364,2 30,649,0 7,741,97 22,907,1
10.54% 24.96% 7.94% 25.26%
credit 26.72 2.38 64.34 92.19 7.32 14.87
insuranc
e)
308,018, 24,208,9 283,809, 386,147, 29,664,0 356,483,
Total 100.00% 7.86% 100.00% 7.68%
490.01 94.79 495.22 453.50 27.91 425.59
Category name of bad debt provision separately accrued: June 2024
Unit: RMB
Beginning balance Ending balance
Name Withdrawa
Carrying Bad debt Carrying Bad debt Reason for
l
amount provision amount provision withdraw
proportion
Customer 1 2,751,489.34 2,751,489.34
Customer in
Customer 2 2,729,871.36 2,729,871.36 2,823,309.36 2,823,309.36 100.00%
financial difficulty
Total 5,481,360.70 5,481,360.70 2,823,309.36 2,823,309.36
If adopting the general mode of expected credit loss to withdraw bad debt provision of accounts receivable.
□ApplicableNot applicable
(3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Category Beginning balance Reversed or Ending balance
Withdrawal Verification Others
recovered
Bad debt
29,664,027.91 -2,688,749.25 2,766,283.87 24,208,994.79
provision
Total 29,664,027.91 -2,688,749.25 2,766,283.87 24,208,994.79
(4) Accounts Receivable Written-off in Current Period
Unit: RMB
Item Written-off amount
Written-off accounts receivable 2,766,283.87
(5) Top 5 of the Ending Balance of the Accounts Receivable and the Contract Assets Collected according
to Arrears Party
Unit: RMB
Ending Ending balance of Proportion to total ending Ending balance of bad debt
Ending balance
Name of the balance of accounts balance of accounts provision of accounts
of accounts
entity contract receivable and receivable and contract receivable and impairment
receivable
assets contract assets assets provision for contract
164
Lu Thai Textile Co., Ltd. Interim Report 2024
assets
Customer A 32,856,172.54 32,856,172.54 10.67% 1,642,808.63
Customer B 23,284,829.48 23,284,829.48 7.56% 1,164,241.47
Customer C 13,642,340.99 13,642,340.99 4.43% 682,117.05
Customer D 10,312,600.40 10,312,600.40 3.35% 577,708.68
Customer E 9,961,061.08 9,961,061.08 3.23% 68,004.83
Total 90,057,004.49 90,057,004.49 29.24% 4,134,880.66
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Other receivables 1,886,991,725.68 2,064,459,414.54
Total 1,886,991,725.68 2,064,459,414.54
(1) Other Receivables
1) Other receivables classified by category
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Intercourse funds 1,882,234,185.39 2,060,091,836.09
Payment on behalf 6,571,563.35 6,736,525.76
Guarantee deposit and cash deposit 1,954,086.48 1,549,661.78
Borrowings and petty cash 1,222,193.47 1,533,557.54
Other 2,658,225.33 2,720,459.54
Total 1,894,640,254.02 2,072,632,040.71
2) Disclosure by aging
Unit: RMB
Aging Ending balance Beginning carrying amount
Within one year (including 1 year) 1,604,661,419.68 1,629,128,024.64
One to two years 31,217,690.99 184,755,200.00
Two to three years 147,000.00 79,555,623.95
More than three years 258,614,143.35 179,193,192.12
Three to four years 256,071,026.05 176,599,422.10
Four to five years 78,000.00
Over 5 years 2,543,117.30 2,515,770.02
Total 1,894,640,254.02 2,072,632,040.71
3) Disclosure by Withdrawal Methods for Bad Debts
Unit: RMB
165
Lu Thai Textile Co., Ltd. Interim Report 2024
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Categor Withdra Withdra
y Carrying Carrying
Proporti wal value Proporti wal value
Amount Amount Amount Amount
on proporti on proporti
on on
Bad debt
provisio
n 163,012. 163,012. 163,012. 163,012.
0.01% 100.00% 0.00 0.01% 100.00% 0.00
separatel 05 05 05 05
y
accrued
Of
which:
Custome 163,012. 163,012. 163,012. 163,012.
0.01% 100.00% 0.00 0.01% 100.00% 0.00
r1 05 05 05 05
Withdra
wal of
bad debt 1,894,47 7,485,51 1,886,99 2,072,46 8,009,61 2,064,45
99.99% 0.40% 99.99% 0.39%
provisio 7,241.97 6.29 1,725.68 9,028.66 4.12 9,414.54
n by
group
Of
which:
Receiva
bles
from
related
parties 1,882,23 5,646,70 1,876,58 2,060,09 6,180,27 2,053,91
99.35% 0.30% 99.40% 0.30%
within 4,185.39 2.56 7,482.83 1,836.09 5.51 1,560.58
the
scope of
consolid
ation
Security
deposit
and 1,953,08 97,654.3 1,855,43 1,549,66 77,483.0 1,472,17
0.10% 5.00% 0.07% 5.00%
margin 6.48 2 2.16 1.78 9 8.69
receivab
le
Other
10,289,9 1,741,15 8,548,81 10,827,5 1,751,85 9,075,67
receivab 0.54% 16.92% 0.52% 16.18%
70.10 9.41 0.69 30.79 5.52 5.27
les
1,894,64 7,648,52 1,886,99 2,072,63 8,172,62 2,064,45
Total 100.00% 0.40% 100.00% 0.39%
0,254.02 8.34 1,725.68 2,040.71 6.17 9,414.54
Category name of bad debt provision separately accrued: June 2024
Unit: RMB
Beginning balance Ending balance
Name Withdrawa
Carrying Bad debt Carrying Bad debt
l Reason for withdraw
amount provision amount provision
proportion
Customer in
Customer 1 163,012.05 163,012.05 163,012.05 163,012.05 100.00%
financial difficulty
Total 163,012.05 163,012.05 163,012.05 163,012.05
166
Lu Thai Textile Co., Ltd. Interim Report 2024
Withdrawal of bad debt provision by adopting the general mode of expected credit loss:
Unit: RMB
First stage Second stage Third stage
Expected loss in the
Bad debt provision Expected credit Expected loss in the Total
duration (credit
loss of the next 12 duration (credit impairment
impairment not
months occurred)
occurred)
Balance of 1 January 2024 6,661,047.19 1,348,566.93 163,012.05 8,172,626.17
Balance of 1 January 2024 in
the Current Period
Withdrawal of the Current
-542,125.74 18,027.91 0.00 -524,097.83
Period
Balance of 30 June 2024 6,118,921.45 1,366,594.84 163,012.05 7,648,528.34
Changes of carrying amount with significant amount changed of loss provision in the current period
□Applicable Not applicable
4) Bad Debt Provision Withdrawn, Reversed or Recovered in the Current Period
Withdrawal of bad debt provision:
Unit: RMB
Changes in the current period
Beginning
Category Reversed or Charged- Ending balance
balance Withdrawal Others
recovered off/Written-off
Bad debt
8,172,626.17 -524,097.83 7,648,528.34
provision
Total 8,172,626.17 -524,097.83 7,648,528.34
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to ending
Name of Ending balance of
Nature Ending balance Aging balance of total other
entity bad debt provision
receivables
Intercourse
Unit 1 805,711,346.27 Within 1 year and 1 to 2 years 42.53% 2,417,134.04
funds
Intercourse Within 1 year, 2 to 3 years and
Unit 2 454,105,243.28 23.97% 1,362,315.73
funds over 3 years
Intercourse
Unit 3 429,877,715.90 Within 1 year 22.69% 1,289,633.15
funds
Intercourse
Unit 4 180,497,518.38 Within 1 year 9.53% 541,492.56
funds
Intercourse
Unit 5 12,000,000.00 Within 1 year 0.63% 36,000.00
funds
Total 1,882,191,823.83 99.35% 5,646,575.48
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Depreciation
Carrying value Carrying value
amount reserves amount reserves
167
Lu Thai Textile Co., Ltd. Interim Report 2024
Investment to 3,446,169,376. 3,435,960,326. 3,446,169,376. 3,435,960,326.
10,209,050.00 10,209,050.00
subsidiaries 50 50 50 50
Investment to
joint ventures
152,156,574.30 152,156,574.30 143,537,479.77 143,537,479.77
and associated
enterprises
3,598,325,950. 3,588,116,900. 3,589,706,856. 3,579,497,806.
Total 10,209,050.00 10,209,050.00
80 80 27 27
(1) Investment to subsidiaries
Unit: RMB
Increase/decrease
Beginning Addi
Withdra Ending balance
Beginning balance balance of tiona Redu Ending balance
Investee wal of O of depreciation
(carrying value) depreciation l ced (carrying value)
impairme th reserve
reserve inve inves
nt er
stme tment
provision
nt
Xinsheng
176,340,737.93 176,340,737.93
Power
Lufeng
Company 529,620,000.00 529,620,000.00
Limited
Luqun Textile 171,784,550.00 171,784,550.00
Luthai (Hong
128,771,800.00 128,771,800.00
Kong)
Shanghai
20,000,000.00 20,000,000.00
Luthai
Lu Thai
0.00 10,209,050.00 0.00 10,209,050.00
(America)
VACL 62,337,238.57 62,337,238.57
Lulian New
300,000,000.00 300,000,000.00
Materials
Lujia Import &
10,000,000.00 10,000,000.00
Export
Lu Thai
Occupational
100,000.00 100,000.00
Training
School
Shanghai
6,000.00 6,000.00
Zhinuo
Zhishu
2,000,000.00 2,000,000.00
Consulting
Huilin
1,630,000,000.00 1,630,000,000.00
International
Banyang
5,000,000.00 5,000,000.00
Mountain Villa
Yuanhui Fund 400,000,000.00 400,000,000.00
Total 3,435,960,326.50 10,209,050.00 3,435,960,326.50 10,209,050.00
(2) Investment to joint ventures and associated enterprises
Unit: RMB
Beginning Beg Increase/decrease Endin
Ending balance
Investee balance (carrying inni Ad Re Gains and Adju Cha Cash Wit Ot g
(carrying value)
value) ng diti du losses stme nges bonus hdr her balan
168
Lu Thai Textile Co., Ltd. Interim Report 2024
bala ona ce recognized nt of of or awa ce of
nce l d under the other othe profit l of depre
of inv in equity method com r s imp ciatio
depr est ve preh equit annou air n
ecia me st ensiv y nced men reserv
tion nt m e to t e
rese en inco issue pro
rve t me visi
on
I. Joint ventures
II. Associated enterprises
Haohong
Investmen 48,257,699.71 9,232,654.55 57,490,354.26
t
Haoying
Investmen 95,279,780.06 -613,560.02 94,666,220.04
t
Subtotal 143,537,479.77 8,619,094.53 152,156,574.30
Total 143,537,479.77 8,619,094.53 152,156,574.30
The recoverable amount is determined based on the net amount of the fair value minus disposal costs
□Applicable Not applicable
The recoverable amount is determined by the present value of the forecasted future cash flow.
□Applicable Not applicable
4. Operating Revenue and Cost of Sales
Unit: RMB
Amount of the current period Amount of the previous period
Item
Revenue Cost Revenue Cost
Principal business 1,343,767,089.55 1,031,390,146.40 1,487,391,745.52 1,187,994,259.75
Others 124,619,201.80 80,166,752.65 122,518,076.91 89,037,564.87
Total 1,468,386,291.35 1,111,556,899.05 1,609,909,822.43 1,277,031,824.62
Information in relation to the transaction price apportioned to the residual contract performance obligation:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not fully performed yet
was RMB0.00 at the period-end, among which RMB0.00 was expected to be recognized in XXX, RMB0.00 was expected to be
recognized in XXX, and RMB0.00 was expected to be recognized in XXX.
5. Investment Income
Unit: RMB
Item Amount of the current period Amount of the previous period
Long-term equity investment income
3,668,556.38 167,571,836.72
accounted by cost method
Long-term equity investment income
8,619,094.53 -1,333,148.86
accounted by equity method
Investment income from disposal of
22,374,515.10
long-term equity investment
Investment income from disposal of
2,546,832.11 31,150,766.58
trading financial assets
Total 14,834,483.02 219,763,969.54
169
Lu Thai Textile Co., Ltd. Interim Report 2024
XIX. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
Applicable □Not applicable
Unit: RMB
Item Amount Note
Gains and losses on disposal of non-current assets -399,351.02
Government grants recognized in profit or loss for the current period (except for
government grants closely related to the Company's normal operating business, in
15,013,138.75
compliance with national policies and in accordance with defined criteria, and having a
continuous impact on the Company's profit or loss)
Gains and losses arising from changes in fair value of financial assets and financial
liabilities held by non-financial enterprises and gains and losses arising from the
-125,669,854.28
disposal of financial assets and financial liabilities, other than effective hedging
business related to the Company's normal operating business
Other non-operating income and expense other than the above 677,817.46
Less: Income tax effects -16,056,262.30
Non-controlling interests effects (after tax) -150,671.78
Total -94,171,315.01 --
Details of other profit and loss items in line with the definition of non-recurring gains and losses:
□Applicable Not applicable
There are no other profit and loss items in line with the definition of non-recurring gains and losses in the Company.
Note to define the non-recurring profit and loss items listed in the Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public—Non-recurring Gains and Losses as recurring profit and loss items.
□Applicable Not applicable
2. Return on Equity and Earnings Per Share
Weighted average ROE EPS
Profit as of Reporting Period
(%) EPS-basic EPS-diluted
Net profit attributable to ordinary
1.83% 0.21 0.19
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
2.84% 0.33 0.29
deduction of non-recurring profit
or loss
Chairman of the Board: Liu Zibin
Lu Thai Textile Co., Ltd.
30 August 2024
170
