2013 Semi-annual Report of Luthai Textile Co., Ltd.
LUTHAI TEXTILE CO., LTD.
2013 SEMI- ANNUAL REPORT
August 2013
1
2013 Semi-annual Report of Luthai Textile Co., Ltd.
Section I. Important Notes, Contents & Explanation
The Board of Directors, the Supervisory Committee, directors, supervisors and senior management
staff of Luthai Textile Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report
does not contain any false record or misleading statement or omit any material fact and shall hereby
accept, individually and collectively, responsibility for the factuality, accuracy and completeness of
the contents carried in this report.
All directors have attended the board session for reviewing this report.
No cash dividends, bonus shares will be granted and no capital reserve will be turned into share
capital in the company.
Liu Shizhen, company principal, Zhang Hongmei, chief of the accounting work, and Zhang Keming,
chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report
enclosed in this report is factual, accurate and complete.
This report is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
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2013 Semi-annual Report of Luthai Textile Co., Ltd.
CONTENTS
Section I. Important Notes, Contents & Explanation ............................................................................................. 错误！未定义书签。
Section II. Company Profile ....................................................................................................................................................................5
Section III. Accounting & Financial Highlights ......................................................................................................................................7
Section IV. Report of the Board of Directors ...........................................................................................................................................9
Section V. Significant Events ................................................................................................................................................................ 17
Section VI. Change in Shares & Shareholders ...................................................................................................................................... 22
Section VII. Directors, Supervisors, Senior Management Staff & Employees ...................................................................................... 25
Section VIII. Financial Report ............................................................................................................................................................... 27
Section IX. Documents Available for Reference ................................................................................................................................. 112
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2013 Semi-annual Report of Luthai Textile Co., Ltd.
Explanation
Refers
Term Contents
to
Refers
Issuer, Company, the Company Luthai Textile Co., Ltd.
to
Refers
The Board of Directors The Board of Directors of Luthai Textile Co., Ltd.
to
Refers
The Supervisory Committee The Supervisory Committee of Luthai Textile Co., Ltd.
to
Refers
CSRC China Securities Regulation Commission
to
Refers
Yuan, Ten thousand RMB Yuan, RMB Ten thousand
to
Refers
The “Company Law” The “Company Law of the People’s Republic of China”
to
Refers
The “Securities Law” The “Securities Law of the People’s Republic of China”
to
Refers
Reporting period 1 Jan. 2013-30 Jun. 2013
to
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2013 Semi-annual Report of Luthai Textile Co., Ltd.
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation LTA, LTB Stock code 000726, 200726
Stock abbreviation after
N/A
change (if any)
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 鲁泰纺织股份有限公司
Abbr. of the Chinese name of
鲁泰纺织
the Company
English name of the Company
LUTHAI TEXTILE CO.，LTD
(if any)
Abbr. of the English name of
LTTC
the Company (if any)
Legal representative of the
Liu Shizhen
Company
II. For Contact
Company Secretary Securities Affairs Representative
Name Qin Guiling Zheng Weiyin
No. 81, Songling East Road, Zichuan No. 81, Songling East Road, Zichuan
Contact address
District, Zibo, Shandong, P.R.China District, Zibo, Shandong, P.R.China
Tel. 0533-5285166 0533-5285166
Fax 0533-5418805；5282188-234 0533-5418805
E-mail qinguiling@lttc.com.cn wyzheng@lttc.com.cn
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the reporting period?
□ Applicable √ Inapplicable
The registered address, office address and their postal codes, website address and email address of the Company did not change
during the reporting period. The said information can be found in the 2012 Annual Report.
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2013 Semi-annual Report of Luthai Textile Co., Ltd.
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable √ Inapplicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report
and the location where this report is placed did not change during the reporting period. The said information can be found in the 2012
Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the reporting period?
√Applicable □ Inapplicable
Registration code of
Registration date Registration place Business license No. Organizational code
taxation
Registration at Zibo Municipal
the beginning of Administration Bureau
24 Nov. 2011 370300400002843 370302613281175 61328117-5
the reporting for Industry and
period Commerce
Zibo Municipal
At the end of the Administration Bureau
08 Jun. 2013 370300400002843 370302613281175 61328117-5
reporting period for Industry and
Commerce
4. Other relevant information
Did any change occur to other relevant information during the reporting period?
□ Applicable √ Inapplicable
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2013 Semi-annual Report of Luthai Textile Co., Ltd.
Section III. Accounting & Financial Highlights
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or
correction of any accounting error?
□ Yes √ No
Same period of last
Reporting period YoY +/- (%)
year
Operating revenues (RMB Yuan) 3,060,495,255.17 2,808,025,564.76 8.99%
Net profit attributable to shareholders of the Company
416,175,890.38 301,503,288.19 38.03%
(RMB Yuan)
Net profit attributable to shareholders of the Company after
393,419,324.10 302,733,028.86 29.96%
extraordinary gains and losses (RMB Yuan)
Net cash flows from operating activities (RMB Yuan) 490,746,920.17 417,039,467.46 17.67%
Basic EPS (RMB Yuan/share) 0.43 0.3 43.33%
Diluted EPS (RMB Yuan/share) 0.43 0.3 43.33%
Weighted average ROE (%) 7.6% 5.79% 1.81%
As at the end of the As at the end of last
YoY +/- (%)
reporting period year
Total assets (RMB Yuan) 7,952,627,112.25 8,153,279,084.33 -2.46%
Net assets attributable to shareholders of the Company
5,401,065,428.89 5,268,701,258.26 2.51%
(RMB Yuan)
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
Unit: RMB yuan
Net profit attributable to Net assets attributable to
shareholders of the Company shareholders of the Company
Reporting Same period of
Closing amount Opening amount
period last year
According to Chinese accounting standards 416,175,890.38 301,503,288.19 5,401,065,428.89 5,268,701,258.26
Items and amounts adjusted according to international accounting standards
According to international accounting standards 842,500.00 859,000.00 -3,960,500.00 -4,803,000.00
According to Chinese accounting standards 417,018,390.38 302,362,288.19 5,397,104,928.89 5,263,898,258.26
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2013 Semi-annual Report of Luthai Textile Co., Ltd.
2. Explain reasons for the differences between accounting data under domestic and overseas accounting
standards
1. Effects of domestic equipment exempted from income tax
The company exempted from income tax for buying domestic equipment. According to Chinese accounting standards, the income tax
expenses are directly reduced which are recognized as deferred income related to assets by the international accounting standards.
According to the regulations of the international accounting standards, this difference is amortized over the fixed using periods of
year of the fixed assets and adjusting net income and net assets.
III. Items and amounts of extraordinary gains and losses
Unit: RMB yuan
Item Amount Explanation
Gain/loss on the disposal of non-current assets (including the offset part of the asset
2,240,764.90
impairment provisions)
Government grants recognized in the current period, except for those acquired in the
ordinary course of business or granted at certain quotas or amounts according to the 12,871,925.92
country’s unified standards
Gains and losses on change in fair value from tradable financial assets and tradable
financial liabilities, as well as investment income from disposal of tradable financial
15,931,196.42
assets and tradable financial liabilities and financial assets available for sales except
for effective hedging related with normal businesses of the Company
Non-operating income and expense other than the above 2,073,308.09
Less: income tax effects 6,234,507.70
Minority interests effects (after tax) 4,126,121.35
Total 22,756,566.28 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Section IV. Report of the Board of Directors
I. Overview
In the reporting period, the global economy has not yet got rid of the deep influence of the world financial crisis.
Though the demand for the textile and garment industry has grown, the overall recovery process is slow. The
textile and garment industry is facing low international demand, slow growth of domestic demand, big difference
of rising cost of production factors between inside and outside cotton price, and a series of problems, which lead
to pressure of the product raising price. On the basis of overcome the aforesaid disadvantages, the Company gave
full play to its own whole industrial chain advantage, adhered to independent research and development and
innovation, and further promoted excellence in performance management, the technology innovation, cost control,
marketing brand construction, informationization and enterprise culture construction continued to maintain the
healthy and stable development, realized the steady growth in operating performance during the reporting period.
For the reporting period, the Company achieved operating revenues of RMB 3,060.4953 million, operating profit
of RMB 496.0669 million, net profit attributable to common share holders of RMB 416.1759 million and net
profit attributable to shareholders of the Company of RMB 393.4193 million after deducting extraordinary gains
and losses, up 8.99%, 45.86%, 38.03% and 29.96% respectively from the same period of last year.
During the reporting period, there were no change in the main business of the Company, main profit source and
composition.
During the reporting period, facing the severe situation of international and domestic market, the Company insists
on practicing internal strength, continued to conduct the research and innovation, promoted research and
development ability, strengthened the differentiation of product development, emphasized leisure product
development, g at the same time, strengthen cooperation between the design , marketing and research and
development employees to meet customers’ demand, improve service quality, and constantly strengthen the
technical research, solved producing problems, and the above work had achieved good results. During the
reporting period, the design of new product 85 series which involving 461 designs and color, the new product
research, development of new technology, promoting new products the order quantity had moved forward. The
Company has been formed by natural fiber fabrics as the main line, multicomponent functional fiber fabrics as the
lead and washable and wearable super durable press technology as the core, and the development of functional
and health goals as the product system which further satisfy the individual and diverse market demand.
During the reporting period, the national center for enterprise technology innovation ability has passed the site
acceptance of Shandong Province Development and Reform Commission and at the same time the Company has
passed the random audit work of high and new technology enterprise by the National Ministry of Science and
Technology, the Ministry of Finance and State Administration of Taxation.
During the reporting period, “lutai LT GRFF brand cotton greige cloth and shirts” was identified as the Shandong
famous brand products in Shandong province famous brand strategy promotion committee. The Company
continued to promote the brand and marketing network construction. In network marketing, lutai online cooperate
with many famous electric business, such as participating in promotion such as Shan Rong Mall, Taobao full
discount, daily special discounts etc. and promote the research and extension of network sales model.
In the promotion of brand of LT GRFF in the entity shop, two stores in Yantai Yinzuo have been completed during
the reporting period, expansion, site selection and the opening of store located at the airport of Jinan Wanda, and
completed the expansion and decoration of Taian Yinzuo counters and enhanced the image of the brand. The
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Company still insists dual brand marketing strategy to promote brand in the future, and keeps the multi-brand
development pattern, clear brand positioning, hierarchical promotion, and outstanding quality, reflects the brand
concept of ‘fit’ ‘satisfy’, and constantly attracts consumer's attention and recognition.
II. Main business analysis
Overview
In the reporting period, the operating revenue increased by 8.99% comparing to the same period last year, at the
same time, the operating cost, and sale expense increased by 6.3% and 6.03% and income tax 68.17%; the interest
tax expense decreased which made the financial expense decreased 33.76%. In the reporting period, the cash of
the Company purchasing the construction assets, intangible assets and other long- term assets decreased, which
made the net amount of cash flow of investment activities increased 50.98% compare to the same period last year;
the cash of loan received decreased which made the net amount of cash flow of raised fund activities decreased by
69.17%.
Change of major financial data:
Unit: RMB yuan
Same period of
Reporting period YoY +/-% Main reasons for change
last year
Operating revenues 3,060,495,255.17 2,808,025,564.76 8.99%
Operating costs 2,184,574,937.90 2,055,106,728.52 6.3%
Selling expenses 81,811,840.15 77,160,291.09 6.03%
Administrative expenses 260,822,329.39 281,403,771.58 -7.31%
The interest decreased in the
Financial expenses 24,336,940.28 36,737,830.95 -33.76%
reporting period
Income tax expenses 83,692,908.10 49,766,218.79 68.17% increased amount of tax income
R&D input 115,069,711.84 134,443,313.63 -14.41%
Net cash flows from operating
490,746,920.17 417,039,467.46 17.67%
activities
The decrease cash of construction of
Net cash flows from investing
-194,568,887.89 -396,954,803.19 50.98% fixed assets, intangible assets and
activities
other long-term assets
Net cash flows from financing
-663,791,817.68 -392,390,736.41 -69.17% Cash of loan decreased
activities
Net increase in cash and cash
-369,296,420.31 -371,469,039.82 0.58%
equivalents
Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable √ Inapplicable
No major changes occurred to the profit structure or sources of the Company during the reporting period.
Reporting period progress of the future development planning in the disclosed documents of the Company such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.:
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
□ Applicable √ Inapplicable
The Company did not mention any future planning for the reporting period in its disclosed documents such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.
Review the progress of the previously disclosed business plan in the reporting period:
III. Breakdown of main business
Unit: RMB yuan
Increase/decrease Increase/decrease Increase/decrease
of operating of operating costs of gross profit
Operating Gross profit rate
Operating costs revenues over the over the same rate over the same
revenues (%)
same period of period of last year period of last year
last year (%) (%) (%)
Classified by industry:
Textile and
2,616,382,415.59 1,820,282,658.11 30.43% 4.53% 0.92% 2.49%
Apparel
Cotton 222,917,964.19 196,699,415.84 11.76% 309.16% 342.44% -6.64%
Electricity and
102,696,182.88 85,247,430.26 16.99% 8.68% -3.81% 10.78%
steam
Other 34,714,401.58 28,892,231.74 16.77% -52.14% -56.97% 9.35%
Classified by product:
Fabric Products 2,034,521,635.12 1,427,276,223.26 29.85% 9.05% 3.74% 3.59%
Shirts 581,860,780.47 393,006,434.85 32.46% -8.69% -8.14% -0.4%
cotton 222,917,964.19 196,699,415.84 11.76% 309.16% 342.44% -6.64%
Electricity and
102,696,182.88 85,247,430.26 16.99% 8.68% -3.81% 10.78%
steam
Other 34,714,401.58 28,892,231.74 16.77% -52.14% -56.97% 9.35%
Classified by region:
Hong Kong 224,302,228.93 157,348,013.59 29.85% -21.47% -25.3% 3.59%
Japan And South
229,106,611.11 157,602,520.53 31.21% -9.22% -10.9% 1.3%
Korea
Southeast Asia 756,460,493.16 530,619,265.08 29.85% 26.72% 20.54% 3.59%
Europe and
472,572,057.53 322,753,717.65 31.7% -13.72% -14.99% 1.03%
America
Other 348,347,623.44 243,824,599.27 30.01% 15.1% 9.96% 3.27%
Domestic 945,921,950.07 718,973,619.84 23.99% 27.98% 25.09% 1.75%
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
IV. Core competitiveness analysis
The Company's comprehensive management ability, research and development ability, and the whole industry chain are the
company's core competitiveness, which did not change during the reporting period.
V. Investment analysis
1. Wealth management entrustment, derivative investments and entrustment loans
（1）Derivative investments
Unit：RMB ten thousand yuan
Proporti
on of the
closing
investme
Relate Type
Impair nt Actual
d-part of
Initial Opening ment Closing amount gain/loss
y derivat
Operator Relation investment Beginning date Ending date investment provisi investment in the in
transac ive
amount amount on (if amount Compan reportin
tion or invest
any) y’s g period
not ment
closing
net
assets
(%)
The
forwar
d
foreig
commerci non-asso n
No 284,547.83 1 Jan. 2013 2 Apr. 2014 95,484.23 0 158,811.56 27.38% 1,791.09
al bank ciate exchan
ge
settle
ment
Purcha
se of
foreig
n
commerci non-asso
No Curren 1,683.4 9 Apr. 2013 4 Jun. 2013 0 0 0 -26.12
al bank ciate
cy at
forwar
d
exchan
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
ge rate
interes
commerci non-asso
No t-rate 11,986.43 17 Jun. 2013 13 Dec. 2013 0 11,986.43 2.07%
al bank ciate
swap
Total 298,217.66 -- -- 95,484.23 0 170,797.99 29.45% 1,764.97
Capital source for derivative
Self-owned funds
investment
Cases involving lawsuit (if
No
applicable)
Disclosure date of the board
announcement approving the wealth 17 Feb. 2012
management entrustment (if any)
Disclosure date of the general
meeting announcement approving
6 Mar. 2012
the wealth management entrustment
(if any)
The Company conducted derivatives products transaction in order for hedging. And the forward settlement
hedging was operated by installments, with the relevant amount not more than the planned derivatives
products transactions. And all derivatives products transaction was zero-deposit. Meanwhile, the Company
had a complete risk control system for sufficient analysis and prevention of possible risks such as risk of
laws and regulations, credit risk, operation risk and market risk.
1. Risk of laws and regulations:
The Company conducted derivatives products transaction in strict accordance with relevant laws and rules as
well as regulatory policies from government securities regulatory authorities, if there were no standard
operation procedures and strict approval procedures, it was easy to cause compliant and regulatory risks
existing in the validity and feasibility of contract, commitments and other legal documents signed.
Precautionary measures: The Company carefully studied and mastered laws, regulations and policies relevant
Analysis on risks and control
to derivative products transaction, formulated internal control rules for the forward settlement hedging
measures of derivative products
business, standardized the operation procedures. And strengthened the compliant examination on derivative
held in the reporting period
products investment business, and strictly abided by relevant laws, regulations and the Company’s internal
(including but not limited to market
management rules.
risk, liquidity risk, credit risk,
2. Credit risk and liquidity risk:
operation risk, law risk, etc.)
When the contract matures, the Company couldn’t deliver as scheduled due to insufficient liquidity, and the
counterparty or the Company couldn’t fulfill the contract due to other aspects except the liquidity, which
would cause credit risk and further economic losses for the Company.
Precaution measure: the Company chose the powerful financial institutions with good reputation as the
counterparty, and signed standard derivative products transaction contract, as well as strictly controlled the
credit risk of counterparty. The Company conducted derivative investment transactions according to the
relevant approval procedure, which was in line with relevant laws, regulations, the Company’s Articles of
Association, the Management Rules for Derivative Investment of Luthai Textile Co., Ltd. and the Plan for
Derivative Transactions in 2012 approved at the First Special Session of the Shareholders’ General Meeting
for 2012 on 5 Mar. 2012, and performed relevant information disclosure responsibilities. The Company
decided the up limit for the amount of derivative products transaction according to the production and
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
operation scale and the progress of foreign exchange income for the Company, and delivered by phases. It
was also possible to use extension of term and other ways to ensure the fulfillment of contract as schedules
upon the mature of contract, and wouldn’t cause any loss of credit risk for the Company due to insufficient
liquidity or other reasons.
3. Operation risk:
The derivative financial transactions had high specialty and complexity, so imperfect internal operation
procedures, staffs and external events would make the Company to undertake risks during the transaction.
Precaution measure: The Company promulgated strict authorization and approval system and perfect
regulatory mechanism, fixed the departments, operation procedures and approval procedures system to
conduct derivative products transaction, established special risk control positions, implemented strict
authorization and post checks and balances system, meanwhile, it improved the overall quality of relevant
personnel through strengthening the business training and professional ethics education for them. Besides, it
established the System of Reporting the Abnormal Situation Timely, formed an efficient risk management
procedures, so as to ensure to lower the operation risks to the maximum.
4. Market risk:
The forward settlement of exchange is an important derivative products transaction, which was significantly
affected by the exchange rate fluctuation due to its large amount. The Central Bank decided to expand the
fluctuation range of RMB exchange rate from bidirectional 0.5% to bidirectional 1% since 16 Apr. 2012,
which would increase the difficulty in the operation of forward settlement of exchange. Besides, if the RMB
is devalued by a large margin on the basis of the current situation before the contract is due, so then, the
larger losses shall incur in the contract on forward settlement of exchange signed by the Company.
Risk analysis and precaution measure: Renminbi appreciated significantly compared with that before the
exchange rate reform, but Renminbi internationalization would be a long-term goal, which decided that
Renminbi would not depreciated significantly. Although the increased fluctuation range added the operation
difficulty, it provided a certain opportunity, which required relevant personnel of the Company actively
master the market trend, carefully operate and hold positive opportunity, so as to try the best to reduce the
market risks under the condition of increased market difficulty.
1. Up to 30 Jun. 2013, the Company held 33 undue financial derivative product contracts, totaling
Changes of market prices or fair
US$ 272.8996 million, with 31 forward settlement contracts and 2 interest rate swap contracts (the latest
values in the reporting period of the
expiration before Apr. 2014). The above financial derivative products accounted for 29.45% of the closing
invested derivatives. And the
net assets.
analysis on the fair value of the
2. From Jan. 2013 to Jun. 2013, the due financial derivative products of the Company totally equaled to
derivatives should include the
US$ 201.2245 million, all delivered on time, and the gain generated was RMB 17.6497 million. The due
specific use methods and the
forward settlement was US$ 198.5 million, all delivered on time, generating gain of RMB 17.9109 million.
relevant assumptions and
And the due forward foreign exchange trading amount equaled to US$ 2.7245 million, which was all
parameters.
delivered as scheduled and generated gain of RMB 261,200.
Whether significant changes
occurred to the Company’s
accounting policy and specific
Unchanged
accounting principles of derivatives
in the reporting period compared to
the previous reporting period
Specific opinion from independent The Company independent director Zhou Zhiji, Wang lei, Sun Ruizhe, Su Xin, Xu Jianjun conducting
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
directors on the Company’s derivatives business have issued the following professional advice: we were of the opinion that it would
derivatives investment and risk strengthen the Company’s competitiveness to use derivative transactions with focus on forward settlement
control and purchase as an effective tool to avoid foreign exchange risks, to strengthen the relevant internal control
and to carry out the loss and risk prevention measures so as to improve the operation and management. It
was considered feasible for the Company to conduct derivative transactions with focus on forward settlement
and purchase, and no harm was done to interests of the Company’s shareholders.
2. Use of raised funds
（1）Overview of the use of raised funds
Unit: RMB Ten thousand
Total raised capital 95,081.45
Total raised capital input in the reporting period 360.85
Accumulative raised capital input 94,362.09
Total raised capital of which the use was changed in the
0
reporting period
Accumulative raised capital of which the use was
14,000
changed
Proportion of accumulative raised capital of which the
14.72%
use was changed (%)
Overview of the use of raised funds
In Dec. 2008, the Company made an additional issue of 150 million A-shares and raising a net amount of RMB 950,814,500. And
the raised funds went to the 150,000-Ingot Top-grade Fine Combed Yarn Project, the 50-thousand Ingot Two-for-one Twisting
Production Line Project, the Production Line Project for 10-million-meter Top-grade Jacquard Fabrics for Women’s Wear, the
Marketing Network Development Project and the Project for Supplementing the Working Capital. Among the aforesaid projects,
the 150,000-Ingot Top-grade Fine Combed Yarn Project, the 50-thousand Ingot Two-for-one Twisting Production Line Project, the
Production Line Project for 10-million-meter Top-grade Jacquard Fabrics for Women’s Wear and the Project for Supplementing the
Working Capital had been completed before the reporting period.
Meanwhile, at the 3rd Special Shareholders’ General Meeting for 2011, it was decided to adjust the raised funds investment of RMB
200 million for the Marketing Network Development Project to RMB 60 million, and the remaining RMB 140 million would be
invested in a new project—the Production Line Project for 40-million Meter Top-grade Yarn-dyed Fabric. By the end of the
reporting period, the cumulative input for the new project stood at RMB 413,979,700, of which raised funds of RMB 140 million
was used, including RMB 28,103,000 for construction and RMB 111,897,000 for equipment purchase. The first phase of the Project
was put into production in Jun. 2012.
In the reporting period, the raised funds investment to The Marketing Network Development Project increase RMB 3.6085 million,
total raised funds investment is RMB 52.8064 million. So far, in addition to set up specialty stores, the company expand online
sales channel by Lutai online and other electric business platform.
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
（2）Projects promised to be invested with raised funds
Unit: RMB Ten thousand
Project
changed Invest Accumu Investment Reach Material
Projects invested Raised Profit
or not ment Input in lative progress up Date when the the change in
with raised capital capital generate
(includin after the input up to the project reaches the expect the
as promised and input as d in the
g adjust reportin to the period-end expected usable ed project
investments with promise reportin
partially ment g year period-e (%)(3)＝ condition profit feasibility
over-raised capital d g period
changed (1) nd (2) (2)/(1) or not or not
)
Projects invested with raised capital as promised
The Project for
Marketing Network Yes 6,000 6,000 360.85 5,280.64 88.01% 30 Dec. 2012 0 Yes No
Development
Subtotal of
promised -- 6,000 6,000 360.85 5,280.64 -- -- 0 -- --
investment projects
Investments of over-raised capital
Total -- 6,000 6,000 360.85 5,280.64 -- -- 0 -- --
Reason for failing to
reach scheduled
progress or
The Project for Marketing Network Development is proceeding as scheduled.
projected income
(explain one project
by one project)
Explanation on
significant changes Up to 30 Jun. 2013, no material change had occurred in the feasibility of the Company’s raised capital
in feasibility of investment projects.
projects
Amount, usage and
usage progress of N/A
over-raised capital
Change of the
implementation
location of any N/A
raised funds
investment project
Adjustment of the
implementation N/A
method of any
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
raised funds
investment project
Applicable
Advance input and On 11 Jan. 2009, Proposal on Replacing the Self-collected Funds of RMB 264,861,646.97 with the Input
exchange of any Raised Capital in Advance at the 27th Meeting of the 5th Board of Directors. Sponsor Guotai Junan Securities
raised funds Co., Ltd. expressed the same opinion. The Company engaged RSM China Certified Public Accountants to
investment project audit investment of self-collected capital to project should be invested with raised capital in advance, and
issued certification report ZRYHZS Zi [2008] No. 3754.
Applicable
On 3 Sept. 2010, it was reviewed and approved at the 3rd Session of the 6th Board of Directors to temporarily
supplementing working capital with raised funds of RMB 94 million for a term from Sep. 2010 to Mar. 2011.
The raised funds used for supplementing working capital accounted for 9.89% of the net raised funds, so the
relevant proposal did not need to be submitted to the general meeting for review. Independent directors and
Guotai Junan Securities (the sponsor) issued their independent opinion and sponsor opinion respectively. The
announcement about temporarily supplementing working capital with raised funds was published on
Idle raised capital
Securities Times, Shanghai Securities News and Ta Kung Pao dated 4 Sept. 2010. On 2 Mar. 2011, the
for temporarily
Company returned, in full amount, the raised funds used previously for supplementing working capital. On 28
supplementing
Mar. 2011, it was reviewed and approved at the 9th Session of the 6th Board of Directors to temporarily
working capital
supplementing working capital again with raised funds of RMB 94 million for a term from Mar. 2011 to Sep.
2011. The raised funds used for supplementing working capital accounted for 9.89% of the net raised funds,
so the relevant proposal did not need to be submitted to the general meeting for review. Independent directors
and Guotai Junan Securities (the sponsor) issued their independent opinion and sponsor opinion respectively.
The announcement about temporarily supplementing working capital with raised funds was published on
Securities Times, Shanghai Securities News and Ta Kung Pao on 30 Mar. 2011. On 21 Sep. 2011, the
Company returned, in full amount, the raised funds used previously for supplementing working capital.
Outstanding raised
funds in project
N/A
implementation and
reasons
Usage and
The unused raised capital up to 31 Dec. 2012 will be input for the Project for Marketing Network
whereabouts of
Development.
unused raise capital
Problems found in
the usage and The Company performed its information disclosure duty in a timely, accurate and complete manner when it
disclosure affairs of used raised funds, temporarily supplemented working capital with raised funds and changed the investment
raised capital and directions of raised funds. No violation of information disclosure rules was found.
other situations
（3）Change of projects invested with raised funds
Unit: RMB Ten thousand
Project after Project before Total Actual Actual Investme Date when the Profit Reach Material
17
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
change change raised input for cumulativ nt project reaches the generate the change in
funds reportin e input by progress expected usable d in the expecte the
planned to g period period-end up to the condition reportin d profit after-change
be input (2) period-en g period or not project
for the d (%)(3) feasibility
project ＝(2)/(1) or not
after
change (1)
Project for a
Project for
40-million Meter
Marketing
Top-grade 14,000 0 14,000 100% 1 Jun. 2013 0 Yes No
Network
Yarn-dyed Fabric
Development
Production Line
Total -- 14,000 0 14,000 -- -- 0 -- --
Due to market changes and other reasons, the implementation of the raised
funds-invested project—Project for Marketing Network Development—was slow. It
was a project that should be invested persistently on a long-term basis, so some
raised funds for the project was idle for a long time, which affected the utilization
efficiency of raised funds. In order to increase the utilization efficiency of the capital
Reasons for change, decision-making and maximize shareholders’ interests, according to relevant stipulations in the
procedure and relevant information disclosure management methods for use of raised funds, the Company held the 2011 3rd Special
(explain one project by one project) Shareholders’ General Meeting on 18 Oct. 2011, at which the proposal on adjusting
the raised funds-invested project was reviewed and approved. According to the said
proposal, the raised fund for the Project for Marketing Network Development was
adjusted from RMB 200 million to RMB 60 million and the remaining RMB 140
million would be input for a new project—the Project for a 40-million Meter
Top-grade Yarn-dyed Fabric Production Line.
Reason for failing to reach scheduled progress
Project for a 40-million Meter Top-grade Yarn-dyed Fabric Production Line is
or projected income (explain one project by
conducted on schedule
one project)
Explanation on significant changes in
No
feasibility of projects after change
（4）Projects invested with raised funds
Overview of the project Disclosure date Index for the disclosed information
Please refer to The annual verification report about the deposit
The annual verification report about the deposit and the actual
and the actual usage of the company’s raised funds disclosed on
usage of the company’s raised funds.
29 Mar. 2013
29 Mar. 2013 which was the same time of the annual report.
18
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
3. Significant projects of investments with non-raised funds
Unit: RMB Ten thousand
Total Input for the Cumulative actual
Project
Project name planned reporting input as at the Project progress
earnings
investment period period-end
A new 230,000-spindle production line project
and a new 35,000-ingot two-for-one twisting 92,866 795.41 1,073.55 1.16% 0
production line project
Total 92,866 795.41 1,073.55 -- --
Index and date for the disclosed information( if any) 23 Mar. 2012
Announcement about A new 230,000-spindle production line project
Index and date for the disclosed information( if any) and a new 35,000-ingot two-for-one twisting production line project
No. 2012-008 was disclosed on http://www.cninfo.com.cn.
4. Significant projects of investments with non-raised funds
Unit: RMB Ten thousand
Total Input for the Cumulative actual
Project name planned reporting input as at the Project progress Project earnings
investment period period-end
LuFeng 50 million meters high piece 65,993 2,943.05 51,523.5 78% 0
dyed fabric project
Total 65,993 2,943.05 51,523.5 -- --
Index and date for the disclosed information( if any) 12 May 2011
Announcement about the subsidiary LuFeng new increasing 50 million meters
Index and date for the disclosed information( if any) high piece dyed fabric production project No. 2012-022 was disclosed on
http://www.cninfo.com.cn.
VI. Predict the operating results of Jan.-Sept. 2013
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the
next reporting period according to prediction, as well as explanations on the reasons:
□Applicable √ Inapplicable
VII. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment of the cash dividend plan and the
plan for turning capital reserve into share capital:
√ Applicable □ Inapplicable
19
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
The 2012 annual profit allocation proposal examined by the company's 2012 annual general meeting of shareholders, for every 10
shares allocated cash RMB 2.80 (including tax) , the profit distribution plan has been completed in June of 2013.
VIII. Particulars about researches, visits and interviews received in this reporting period
Main discussion and
Place of Way of
Time of reception Visitor type Visitor materials provided by
reception reception
the Company
Office of the Field China Galaxy Securities CO., Ltd: Hua Xiaowei Company’s current
23 Jan. 2013 Institution
Company research Yang Lan situation
Office of the Field Company’s current
23 Jan. 2013 Institution The First Capital Securities co., LTD: Lv Liping
Company research situation
Office of the Field Shanghai Milestone Asset Management Company’s current
23 Jan. 2013 Institution
Company research Co.,Ltd: Wong Di situation
Office of the Field Company’s current
23 Jan. 2013 Institution Sealand Securities co., LTD: Su Linhao
Company research situation
Office of the Field Hua Chuang Securities co., LTD: Tang Company’s current
23 Jan. 2013 Institution
Company research Shuangshuang situation
Office of the Field Company’s current
23 Jan. 2013 Institution Dacheng Fund Management Co., Ltd: Liu Yang
Company research situation
Office of the Field Tian Hong Fund Management Co., LTD：Fu Company’s current
23 Jan. 2013 Institution
Company research Fangbao situation
Office of the Field Company’s current
23 Jan. 2013 Institution Harvest Securities Co., Ltd: Zhang Hao
Company research situation
Office of the Field Beijing StarRock Investment Management Co., Company’s current
23 Jan. 2013 Institution
Company research Ltd: Chen Yao situation
Office of the Field Company’s current
20 Sep. 2013 Institution Hai Tong International : Li Xiguang
Company research situation
Office of the Field Company’s current
20 Sep. 2013 Institution Lyhas Capital: Jon Ogden
Company research situation
Office of the Field Company’s current
220 Sep. 2013 Institution Lyhas Capital: David N. Devine
Company research situation
Office of the Field Company’s current
23 May 2013 Institution CITIC Secrities Co., Ltd: Wang Rong
Company research situation
Office of the Field Company’s current
23 May 2013 Institution CITIC Secrities Co., Ltd: Jun Xinghai
Company research situation
Office of the Field Company’s current
23 May 2013 Institution CITIC Secrities Co., Ltd: Yan Feng
Company research situation
23 May 2013 Office of the Field Institution Changjiang Securities Company Limited Lei Yu Company’s current
20
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Company research situation
Office of the Field Cicc's International Finance Co., Ltd: Company’s current
23 May 2013 Institution
Company research Cao Yan situation
Office of the Field Hua Rong Securities Co., Ltd: Company’s current
23 May 2013 Institution
Company research Han Yue situation
Office of the Field Company’s current
23 May 2013 Institution TF Securities Co., Ltd: Yao Yao
Company research situation
Office of the Field HSBC Jintrust Fund Management Co., Ltd : Company’s current
23 May 2013 Institution
Company research Qiu Dongrong situation
Office of the Field ICBC Credit Suisse Fund Management Co., Company’s current
23 May 2013 Institution
Company research Ltd: Gao Yuanyuan situation
Office of the Field Huatai BaiRui Fund Management Co., Ltd: Company’s current
23 May 2013 Institution
Company research Zhao Jie situation
Office of the Field Green Wood Asset Management Co., Ltd: Chen Company’s current
23 May 2013 Institution
Company research Kaixian situation
Office of the Field Yin Hua Fund Management Co., Ltd: Company’s current
23 May 2013 Institution
Company research Wang Xiang situation
21
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
V. Significant Events
I. Corporate governance
The Company continued to perfect the corporate governance structure, establish and perfect the modern enterprise system and ensure
the efficient and standardized operation of the Company’s Shareholders’ General Meeting, Board of Directors, Board of Supervisors
and Senior Executives strictly according to Company Law, Securities Law and Governing Rules for Listed Company as well as
relevant stipulations and requirements from CSRC. It formed a relationship of clear division of rights and responsibilities, assuming
each own functions and check and balance each other between the management organ, decision-making organ, supervisory organ and
management layer, so as to provide a good internal operational environment for the Company’s standardized and efficient operation.
At present, there is no difference between the actual situation of the Company’s corporate governance structure and the requirements
on the corporate governance of CSRC and Shenzhen Stock Exchange.
II. Implementation and influence of equity incentive
1. Summary of equity incentive plan
On 8 Apr. 2011, the 10th session of the 6th board of directors reviewed and approved “2011 Plan on Restricted Stock Incentive of
Luthai Textile Co., Ltd.” (Draft). According to requirements of CSRC, the Company submitted the complete application materials on
equity incentive plan to CSRC for the record. In accordance with feedback from CSRC, the Company revised the incentive plan and
formed “2011 Plan on Restricted Stock Incentive of Luthai Textile Co., Ltd.”(Revised Draft) which was approved in the 13th session
of the 6th board of meeting on 15 July 2011 without objection of CSRC. On 3 Aug. 2011, the Company held the 2nd temporary
shareholders’ general meeting for 2011 and approved “2011 Plan on Restricted Stock Incentive of Luthai Textile Co., Ltd.”(Revised
Draft).
With the authorization of shareholders’ general meeting, on 17 Aug. 2011, the Company held the 15th session of the 6th board of
directors and approved “Proposal on Granting Incentive Objects Restricted Stocks According to 2011 Plan on Restricted Stock
Incentive” and decided that 18 Aug. 2011 was fixed as grant date of the above incentive plan. On the same day, “Proposal on
Personnel Adjustment in 2011 Plan on Restricted Stock Incentive of Luthai Textile Co., Ltd.” was approved. Because four employers
were not qualified for requirements of incentive objects, their qualifications of incentive objects were canceled and they were not
granted restricted stocks. Therefore, the number of incentive objects changed from 350 into 346 and the amount of granted restricted
stocks changed from 14.3 million shares to 14.12 million shares.
“Announcement of Luthai Textile Co., Ltd. on Finishing Granting Restricted Stocks” declared on 6 Sep. 2011 clarified that: because
of personal reasons, incentive objects including Guo Yuan and Yang Tao voluntarily gave up restricted stocks the Company was
about to endow, respectively 10,000 shares and 20,000 shares. Therefore, the number of incentive objects changed from 346 into 344
and the amount of granted stocks changed from 14.12 million shares into 14.09 million shares. Up to now, the Company has already
finished granting restricted stocks: grant date is 18 Aug. 2011, the amount of granted stocks is 14.09 million shares, the number of
incentive objects is 344 and grant price is RMB 5.025 per share.
On 13 Aug. 2012, the 23rd session of the 6th board of directors reviewed and approved “Proposal on Repurchasing and Withdrawing
Restricted Stocks Granted to Unqualified Original Incentive Objects”. Original incentive objects including Liu Qingchun and Shi
Qian left their posts during the assessment period and they were not qualified for regulations of restricted stock incentive plan, so the
22
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
stocks granted to the above persons, respectively 20,000 shares and 40,000 shares, were repurchased and withdrawn; withdrawal was
completed on 6 Dec. 2012. Therefore, the number of incentive objects of restricted stocks changed to 342, and the amount of
restricted stocks change to 14.03 million shares.
On 27 March 2013, the Company passed “Proposal on Restricted Stock Granted to Previous Incentive Objects Who Fall through
Incentive Requirements” and “Proposal on Restricted Stock Granted to All Incentive Objects and still Locked during the Second
Unlocking Period”. The Company decided to repurchase and write off locked and restricted stocks of Zhangtao, Mengming and
Chuiyan in the amount of 12,000 shares, 12,000 shares, 12,000 shares respectively, because they were left on January 2013 and fell
through the standard of incentive plan of restricted stocks. In addition, previous incentive object, Qu Qingfeng has arranged
retirement and left in January 2013. pursuant to “the 33rd” in incentive plan, part of restricted stocks of Qu Qingfeng still locked in
the second period were still valid,; restricted stocks still locked in the third period in the amount of 30,000 shares would be
repurchased and written off by the Company. The restricted stocks repurchased and written off this period reached 66,000 shares and
incentive objects decreased four people; therefore, incentive objects holding restricted shares in the second period declined to be 339,
and restricted stocks still locked were adjusted to be 4,191,000 shares. In line with stipulation of stock incentive plan, unless
company performance index meets three requirements of unlocking requirement of 2012 simultaneously, can companies unlock. Net
profits of the Company increased 0.52% comparing to 2010 after being deducted non-recurring profit and loss and was lower than
the examination requirement, therefore, the stock incentive plan in the second period did not comply with the unlocking requirements.
Under this situation, the Company shall repurchase and write off all stocks according to relevant stipulations of “Repurchase and
write-off of restricted stocks” in the 8th chapter of stock incentive plan. The restricted stock stated above were written off on 27 June
2013, therefore, incentive objects who obtain restricted stocks in the third period became 338, and restricted stocks still locked in the
third period reached 4,161,000 shares.
2. Source of incentive stocks:
Directional add-issuance of restricted stocks to incentive objects.
3. Assessment to incentive objects
The human resource department of the Company, according to implementation and assessment methods of restricted stock incentive
plan of Luthai Textile Co., Ltd., conducted appraisal of 2011 annual performance of incentive objects and the appraisal result was
that: they were all qualified and met the conditions of unlocking.
Net profits of the Company increased 0.52% comparing to 2010 after being deducted non-recurring profit and loss and was lower
than the examination requirement, therefore, the stock incentive plan in the second period did not comply with the unlocking
requirements. Under this situation, the Company shall repurchase and write off all stocks according to relevant stipulations of
“Repurchase and write-off of restricted stocks” in the 8th chapter of stock incentive plan and repurchased all restricted stocks on 27
June 2013.
4. Particulars about unlocking incentive stocks:
On 13 Aug. 2012, the 23rd session of the 6th board of directors reviewed and approved “Proposal on Unlocking Restricted Stock
23
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Incentive Plan During the First Unlocking Period” and approved that the 342 qualified incentive objects were unlocked during the
first unlocking period, the proportion of unlocked shares during the first unlocking period in total granted incentive shares was 40%
and the amount of unlocked shares was 5.612 million shares. The listing date of firstly unlocked shares was 3 Sep. 2012.
5. Influence of implementing stock incentive plan on financial situation and operation results during the
reporting period and in the future
The fee of implementing stock incentive plan during the reporting period was RMB 4,801,800 and the influenced total profit of the
Company in the first half year of 2013 reached RMB 4,801,800.
III. Significant related-party transactions
1. Related-party transactions arising from routine operation
Proporti
Transact on in the Obtainable
Relate ion total market
Type
d Contents of Transa amount amounts Mode of price for
of the Pricing
transac Relation the ction (RMB of settleme the Disclosure date Disclosure index
transac principle
tion transaction price Ten transacti nt transaction
tion
party thousand ons of of the
) the same same kind
kind (%)
Towel, More details can be
Luche
Parent Procur socks and Market browsed in the
ng 329.16 64.51% Cash 29 Mar. 2013
company e products of price website
Textile
oil (www.cninfo.com.cn)
Reacc Cash
Parent
Limin eptanc More details can be
company
Purifie e of Sewage Market browsed in the
wholly 556.24 100% 29 Mar. 2013
d labor treatment price website
owned
Water service (www.cninfo.com.cn)
company
s
Cash More details can be
Luche
Parent Land, Market browsed in the
ng lease 268.94 15.62% 29 Mar. 2013
company housing price website
Textile
(www.cninfo.com.cn)
Luqun Parent Cash More details can be
Land, Market
Proper company lease 90.12 5.23% 29 Mar. 2013 browsed in the
housing price
ty wholly website
24
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
owned (www.cninfo.com.cn)
company
Total -- -- 1,244.46 -- -- -- --
2. Credits and liabilities with related parties
Was there any credit or liability with any related party for non-operating purpose?
√ Yes □ No
Amount
Non-operating Opening incurred in Closing
Related Relationshi Variety of credit or
Reason capital occupation balance (RMB reporting balance (RMB
party p liability
or not? Ten thousand) period (RMB Ten thousand)
Ten thousand)
Lucheng Parent Liabilities payable
Borrowing No 4,390 2,600 6,990
Textile company to related-party
IV. Significant contracts and the fulfillment of contracts
1. Particulars about guarantee
Unit: RMB ten thousand
Particulars on external guarantee of the Company (excluding guarantees for subsidiaries)
Date of
disclosure
Whether Whether
of relevant Date of making
Actual amount the guaranteeing
Name of guarantee announcem guarantee (date Type of Guarantee
Guarantee of guarantee guarantee for related
object ents on of signing guarantee period
limit has been parties (yes or
guarantee agreement)
fulfilled no)
limit
Particulars about guarantee of the Company for subsidiaries
Wheth Whether
Actual
Date of disclosure of er the guarante
amount
relevant Amount Date of making guaran eing for
Name of guarantee of Type of
announcements on of guarantee (date of Guarantee period tee has related
object guarante guarantee
guarantee limit guarante signing agreement) been parties
e
e fulfille (yes or
d no)
Lufeng Weaving & Guarantee From the date of
23 May 2011 30,000 10 May 2011 493.8 No Yes
Dyeing Co., Ltd. of joint implementing loan
25
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
and within credit line to
several the date of clearing
liability off loan principal and
interest
Guarantee
Xinjiang Luthai of joint Two years since the
Harvest Cotton Co., 14 July 2012 10,000 13 July 2012 and approval of the board No Yes
Ltd. several of the Company
liability
Guarantee
Xinjiang Luthai of joint One year since the
Harvest Cotton Co., 25 Sep. 2012 10,000 24 Sep. 2012 and approval of the board No Yes
Ltd. several of the Company
liability
Total amount of approved guarantee for Total amount of actual
subsidiaries during the reporting 0 guarantee for subsidiaries 0
period(B1) during the reporting period(B2)
Total amount of actual
Total amount of approved guarantee for
guarantee for subsidiaries at
subsidiaries at the end of the reporting 50,000 493.8
the end of the reporting
period(B3)
period(B4)
Total amount of guarantee (sum total of the first two items)
Total amount of approved guarantee during the Total amount of actual guarantee during the
0 0
reporting period(A1+B1) reporting period(A2+B2)
Total amount of approved guarantee at the end Total amount of actual guarantee at the end
50,000 493.8
of the reporting period(A3+B3) of the reporting period(A4+B4)
Proportion of total amount of actual guarantee (A4+B4) in net
0.09%
assets of the Company
Among which:
Amount of guarantee provide for shareholders, actual controller
0
and related parties(C)
Amount of guarantee provided directly or indirectly for
0
guarantee objects with asset-liability ratio reaching over 70%(D)
Balance between 50% of net assets and total amount of
0
guarantee which exceeds 50% of net assets(E)
Sum total of the above three guaranteed amounts(C+D+E) 0
According to “Agreement on Counter Guarantee” signed on 12 May.
Explanations about joint and several liability for repayment in 2011 between Luthai Company and Lu Feng Company, Lu Feng
respect of undue guarantee Company , the warrantee provided the corresponding amount of
counter guarantee for Luthai Company. According to “Agreement on
26
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Counter Guarantee” signed on 13 July 2012 between Luthai Company
and Xinjiang Luthai Company, Xinjiang Luthai Company , the
warrantee provided the corresponding amount of counter guarantee for
Luthai Company. According to “Agreement on Counter Guarantee”
signed on 24 Sep. 2012 between Luthai Company and Xinjiang Luthai
Company, Xinjiang Luthai Company , the warrantee provided the
corresponding amount of counter guarantee for Luthai Company.
Explanation about external guarantee violating established The Company never provided guarantees for companies except
procedure controlling subsidiaries.
Explanations about guarantees provided with complex methods
V. Commitments made in the reporting period by the Company or its shareholders with
equities of over 5% or such commitments carried down into the reporting period
Party making Date of
Commitment the Content of commitment making Term for acceptance Fulfillment of commitment
commitment commitment
Zibo Lucheng will not reduce its
shareholding within 60 months
after reform of non-tradable
shares and, within 24 months after
the term of 60 months, the price
Not reduce the
of selling holding shares shall not Increase of bonus share for
shareholding within
be lower than RMB 15 per share 2005 and 2006 has been
60 months after
(if the share capital changes, fulfilled. The total profit of
reform of
ex-rights and ex-dividend will be 2008 increased by 58.06%
non-tradable shares
conducted); it proposed and voted compared to that of 2005.
and, within 24
for a cash distribution not lower Till 12 Jun. 2011, the
Zibo Lucheng months after the
Commitments than 50% of the profit available non-tradable term of 9835.80
Textile term of 60 months,
made in a for distribution in the year at the ten thousand shares held by
Investment 12 Jun. 2006 the price of selling
share reform 2006 Shareholders’ General Lu Cheng Company came to
Co., Ltd. holding shares shall
Meeting and 2007 Shareholders’ an end and the above shares
not be lower than
General Meeting; it will increase came into market on 24 Jun.
RMB 15 per share
the LUTHAI A shares held by it 2011 and are not reduced at
(if the share capital
through trading at the secondary present.
changes, ex-rights
market with the dividends
and ex-dividend will
received in 2005 and 2006, and
be conducted)
the increase of the LUTHAI A
shares held shall be accomplished
within 12 months after the
dividend is transferred to its
account. In 2008, the total profit
increased by not less than 30%
27
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
compared with that in 2005.
Commitments
made in
acquisition
reports or None None None None
report on
changes in
equity
Commitments
made at the
None None None None
time of assets
reorganization
Investment projects of raised
funds including project on
150 thousand ingots of
high-end combed yarn,
project on production line of
50 thousand ingots of
two-for-one twisting, project
on complementing
circulating funds of the
company, project on
production line of 10 million
meters of high-end jacquard
Commitments for female garments have
at the time of already been fulfilled. On 18
Luthai Textile 19 Dec.
initial public Investment project of raised funds Oct. 2011, the 3rd temporary
Co., Ltd. 2008
issuance or shareholders’ general
re-financing meeting approved that RMB
140 million raised funds of
this project were transferred
into project on increasing 40
million meters of high-end
yarn-dyed fabric production
line. Till the end of the
reporting period, this project
has already been finished.
And project on network
construction of brand and
marketing is under the
implementation.
Other
None None None None
commitments
28
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
made for
medium and
small
shareholders
of the
Company
Whether commitments were
Yes
fulfilled in time
Specific reasons of unfinished
None
fulfillment and further plan
VI. Particulars about employing and dismissing Certified Public Accountants by the
Company
Whether semi-annual financial report is audited?
□ Yes √ No
VII. Explanations about other significant events
On 25 June 2012, the 2nd temporary shareholders’ general meeting in 2012 reviewed and approved relevant matters about
repurchasing part of domestically listed foreign shares (B share). On 8 Sep. 2012, Report of Luthai Textile Co., Ltd. on Repurchasing
Part of Domestically Listed Foreign Shares (B share) and announcement on approving the plan of repurchasing part of B shares were
declared. For details see announcement No. 2012-037 published on Cninfo website (www.cninfo.com.cn). The Company began to
implement plan of repurchasing part of B shares on 10 Sep. 2012. The repurchasing period is due on 24 June 2013 with repurchase of
B shares at an amount of 48,837,304 shares. On 12 July 2013, the Company registered liquidation of Shenzhen subsidiary of limited
liability companies in China Security, and finished write-off works stated above. In respect of the specific progress and subsequent
development, for details see the relevant announcements on Cninfo website.
29
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
VI. Change in Shares & Shareholders
I. Change in shares
Before the change Increase/decrease (+, -) After the change
Capitaliz
Issuance ation of
Proporti Bonus Proportio
Amount of new public Others Subtotal Amount
on (%) shares n (%)
shares reserve
fund
I. Restricted shares 127,637,842 12.65% -4,071,620 -4,071,620 123,566,222 12.3%
1. Shares held by the
0% 0%
State
2. Share held by
state-owned 0% 0%
corporations
3. Shares held by
other domestic 7,458,000 0.74% -3,837,000 -3,837,000 3,621,000 0.36%
corporations
Among which: shares
held by domestic 0% 0%
corporations
Shares held by
domestic natural 7,458,000 0.74% -3,837,000 -3,837,000 3,621,000 0.36%
persons
4. Shares held by
118,232,400 11.72% 118,232,400 11.77%
foreign investors
Among which: Shares
held by foreign 118,232,400 11.72% 118,232,400 11.77%
corporations
Shares held by foreign
0% 0%
natural persons
5. Share held by
senior management 1,947,442 0.19% -234,620 -234,620 1,712,822 0.17%
staff
II. Non-restricted
881,256,958 87.35% -185,380 -185,380 881,071,578 87.7%
shares
1. Renminbi ordinary 556,901,458 55.2% -114,080 -114,080 556,787,378 55.42%
30
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
shares
2. Domestically listed
324,355,500 32.15% -71,300 -71,300 324,284,200 32.28%
foreign shares
3. Others 0%
III. Total shares 1,008,894,800 100% -4,257,000 -4,257,000 1,004,637,800 100%
Reason for change in shares
√ Applicable □ Inapplicable
1. In the reporting period, the Company repurchased and wrote off 36,000 shares still not unlocked among incentive stocks owned by
Zhangtao, Mengmin and Chuiyan who failed to meet the incentive requirements; the Company also repurchased and wrote off 30,000
shares still not unlocked owned by senior executive Qu Qingfeng who retired from the Company; in addition, the Company
repurchased and wrote off 4,191,000 restricted shares out of line with unlocking requirements in the second period of stock incentive
plan. Therefore, the Company repurchased and wrote off 4,257,000 shares in total.
2. In the reporting period, because of the reelection of board of director and senior executives, shares held by directors of the board,
senior executives and newly-elected senior executives were restricted according to stipulations, leading to changes in the amount of
“shares of senior executives” among “restricted stocks”, “shares of foreign natural person” among “other domestic shareholdings”,
“RMB ordinary shares and foreign shares listed domestically” among “unrestricted stocks”.
Information about change in shares
√ Applicable □ Inapplicable
On 3 Aug. 2011, the 2nd temporary shareholders’ general meeting in 2011 reviewed and approved “Plan on Restricted Stock
Incentive of Luthai Textile Co., Ltd.”(Revised Draft)” and proposal about empowering the board of directors to manage relevant
matters about stock incentive including change and termination of restricted stock incentive plan. Granting shares to qualified
incentive objects, handling necessary procedures related to endowment of shares and unlocking of shares, repurchasing and
withdrawing shares granted unqualified incentive objects were also included in the matters the board need to manage. On 27 Mar.
2013, the 26th session of the 6th board of directors reviewed and approved “Proposal on Repurchasing and Withdrawing Restricted
Stocks Granted to Unqualified Original Incentive Objects” and “Proposal on Repurchasing and Withdrawing Restricted Stocks
Granted to All Incentive Objects and still Locked in the Second Period”. On 27 Jun. 2013, the Company repurchased and withdrawn
36,000 shares of incentive stocks still not unlocked owned by Zhangtao, Mengmin and Chuiyan who failed to meet incentive
requirements, and 30,000 shares owned by Qu Qingfeng who retired from the Company, and 4,191,000 shares unqualified to
unlocking requirements in the second period of incentive plan.
Information of transfer ownership of shares
√ Applicable □ Inapplicable
On 24 Jun. 2013, the Company applied for Shenzhen Securities Depository and Cleaned Corporation Limited, Shenzhen Branch. In
addition, the Company arranged procedures of transferring shares owned by Zhangtao, Mengmin and Chuiyan who failed to meet
incentive requirements, senior executive Qu Qingfeng who retired and unqualified to unlocking requirements in the second period of
incentive plan in an amount of 36,000 shares, 30,000 shares, 4,191,000 shares respectively. The restricted shares still locked stated
above were transferred to special stock account of the Company. On 27 Jun. 2013, Shenzhen Securities Depository cleaned the
Corporation Limited, Shenzhen Branch and withdrew all the repurchasing stocks.
Influence on the changes in shares on financial indicators of the recent year or the recent term including basic EPS, diluted EPS, and
net asset value per share which belongs to common stock holders of the Company.
√ Applicable □ Non-applicable
There existed no influence of changes in shares on financial indicators of the recent year or the recent term including basic EPS,
diluted EPS, and net asset value per share belonging to common stock holders of the Company.
31
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Other information demanded to disclosed by the Company or security regulation organizations
□Applicable√ Non-applicable
Particulars about changes in share amount, shareholder structure, assets and liabilities structure
□Applicable√ Non-applicable
II. Particulars about shareholders and shareholding
Unit: Share
Amount of shareholding at period end 98,900
Shareholding of shareholders owning over 5% shares
Pledged or frozen
Amount of Increase/ shares
Proportion
shares till decrease Amount of Amount of Cond
Type of of
Name of Shareholder the end of during the non-tradable tradable ition
shareholder shareholdi Condition
reporting reporting shares shares of
ng (%) of shares
period period share
s
Domestic
Zibo Lucheng Textile
non-state-owned 12.27% 123,314,700 0 0 123,314,700
Investment Co., Ltd.
corporation
Tailun (Thailand) Textile Co., Foreign
11.77% 118,232,400 0 118,232,400 0
Ltd. corporation
DBS VICKERS (HONG Foreign
4.04% 40,528,642 0 0 40,528,642
KONG) LTD A/C CLIENTS corporation
Franklin Guohai potential group Domestic
Investment Securities non-state-owned 0.98% 9,810,288 9,810,288 0 9,810,288
Investment Fund corporation
Foreign
LYNAS ASIA FUND 0.93% 9,354,914 9,354,914 0 9,354,914
corporation
Huashang Shengshi Domestic
Development Portfolio non-state-owned 0.87% 8,772,748 8,772,748 0 8,772,748
Investment stock fund corporation
Foreign
Kuwait Government BOI 0.82% 8,226,707 8,226,707 0 8,226,707
corporation
Guangfa Strategy Optimization Domestic
Mixed-type Securities non-state-owned 0.8% 8,074,561 8,074,561 0 8,074,561
Investment Fund corporation
VALUE PARTNERS
Foreign
HIGH-DIVIDEND STOCKS 0.59% 5,908,304 5,653,304 0 5,908,304
corporation
FUNDS
32
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
HTHK-MANULIFE CHINA Foreign
0.57% 5,731,606 5,370,913 0 5,731,606
VALUE FUND corporation
Particulars about strategic investors or common
legal persons who became the top ten shareholders None
because of the issuance of additional shares (if any)
Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder of the
Company and the actual controller. Tailun (Thailand) Textile Co., Ltd. is the
Explanations about associated relationship or second largest shareholder as well as sponsor of foreign capital of the Company.
concerted action among the above shareholders All of other shareholders are people holding circulating A share or circulating
B share and the Company is not able to confirm whether there is associated
relationship or concerted action among other shareholders.
Shareholdings of the top ten shareholders not subject to trading moratorium
Type of shares
Name of shareholders Name of shareholders
Type Type
RMB common
Zibo Lucheng Textile Investment Co., Ltd. 123,314,700 123,314,700
shares
Foreign shares
DBS VICKERS (HONG KONG) LTD A/C CLIENTS 40,528,642 listed 40,528,642
domestically
Franklin Guohai potential group Investment Securities RMB common
9,810,288 9,810,288
Investment Fund shares
Foreign shares
LYNAS ASIA FUND 9,354,914 listed 9,354,914
domestically
Huashang Shengshi Development Portfolio Investment stock RMB common
8,772,748 8,772,748
fund shares
RMB common
Kuwait Government BOI 8,226,707 8,226,707
shares
Guangfa Strategy Optimization Mixed-type Securities RMB common
8,074,561 8,074,561
Investment Fund shares
Foreign shares
VALUE PARTNERS HIGH-DIVIDEND STOCKS FUNDS 5,908,304 listed 5,908,304
domestically
Foreign shares
HTHK-MANULIFE CHINA VALUE FUND 5,731,606 listed 5,731,606
domestically
Bank of Communication－Hua’an Strategy Optimization RMB common
4,221,762 4,221,762
Securities Investment Fund shares
Explanation about associated relationship and concerted Among the above shareholders, except that Lucheng Corporation is the
33
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
action among the top ten shareholders not subject to trading largest shareholder of the Company, all of other shareholders are people
moratorium as well as between the top ten shareholders not holding circulating A share or circulating B share and the Company is
subject to trading moratorium and the top ten shareholders not able to confirm whether there is associated relationship or concerted
action among other shareholders.
Particulars about shareholders participating in margin trading
None
(if any)
Whether shareholders reach agreement on repurchasing trading in the reporting period?
□ Yes √ No
34
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
VII. Directors, Supervisors & Senior Management Staff
I. Shareholding changes of directors, supervisors and senior management staff
√ Applicable □ Inapplicable
Increase of Restricted Restricted
Shares held Decrease Shares Restricted
shares in stock stock
Incum at the of shares held at the stock
this conferred at conferred at
Name Title bent or beginning in this end of the conferred in
reporting the the
not the reporting reporting reporting this period
period period-begi period-end(
period period period (share)
(share) n (share) share)
Liu Chairman of the Incum
437,295 437,295
Shizhen Board bent
Vice Chairman of the Incum
Xu Zhinan
Board bent
Director/General Incum
Liu Zibin 178,290 30,000 148,290 60,000 -30,000 30,000
Manager bent
Fujiwara Director/Senior Incum
Hidetoshi Consultant bent
Chen Incum
Director
Ruimou bent
Zeng Incum
Director
Facheng bent
Wang Director/Chief Incum
223,238 30,000 193,238 60,000 -30,000 30,000
Fangshui engineer bent
Qin Director/ Secretary to Incum
124,452 124,452
Guiling the Board bent
Incum
Zhou Zhiji Independent director 0
bent
Incum
Wang Lei Independent director 0
bent
Incum
Sun Ruize Independent director 0
bent
Incum
Su Xin Independent director 0
bent
Incum
Xu Jianjun Independent director 0
bent
35
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Zhu Supervisor of the Incum
91,638 91,638
Lingwen Board bent
Incum
Liu Zilong Supervisor 0
bent
Dong Incum
Supervisor 5,000 5,000
Shibing bent
Zhang Incum
Vice chairman 118,400 30,000 88,400 60,000 -30,000 30,000
Jianxiang bent
Zhang Incum
Chief accountant 118,100 30,000 88,100 60,000 -30,000 30,000
Hongmei bent
Li Incum
Chairman of the union 206,164 30,000 176,164 60,000 -30,000 30,000
Tongmin bent
Assistant of general
Wang Incum
manager, manager of 113,700 30,000 83,700 60,000 -30,000 30,000
Jiabin bent
production department
Assistant of general
Zhang manager, manager of Incum
113,100 30,000 83,100 60,000 -30,000 30,000
Shougang clothing-making bent
department
Assistant of general
Zhang manager, general Incum
110,300 30,000 80,300 60,000 -30,000 30,000
Zhanqi manager of Lufeng bent
company
Zhang Incum
Financial manager 125,200 30,000 95,200 60,000 -30,000 30,000
Kemin bent
Manager of the second
Incum
Pan Pingli department of 153,796 30,000 123,796 60,000 -30,000 30,000
bent
international business
Lu Vice president of Incum
117,900 40,000 77,900 60,000 -30,000 30,000
Yongchen Lufeng company bent
Yu
Manager of energy Incum
Shouzhen 113,100 30,000 83,100 60,000 -30,000 30,000
business unit bent
g
Incum
Quan Peng Marketing manager 100,000 63,000 37,000 60,000 -30,000 30,000
bent
Wang Manager of the first
Incum
Changzha department of 100,000 70,000 30,000 60,000 -30,000 30,000
bent
o international business
Shang Manager of Incum
100,000 70,000 30,000 60,000 -30,000 30,000
Chenggan enterprises bent
36
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
g management
department
Sun
Director Left 21,604 21,604
Zhigang
Qi Left
Independent director
Haodong
Bi Xiuli Independent director Left
Hong Left
Independent director
Xiaobing
Qu Chief auditor of Left
236,300 60,000 176,300 60,000 -60,000 0
Qingfeng ministry of audit
Bai Dean of chief engineer Left
113,715 30,000 83,715 60,000 -30,000 30,000
Nianyue office
Wu Manager of human Left
110,000 30,000 80,000 60,000 -30,000 30,000
Yanzhen resource department
Yu Manager of Left
115,000 30,000 85,000 60,000 -30,000 30,000
Yongbing production department
Total -- -- 3,246,292 0 723,000 2,523,292 1,140,000 -600,000 540,000
II. Directors, supervisors and senior management staff who left their posts
Name Title Type Date Reason
Hong
Xiaobin Independent director Expiry 6 Jun. 2013 Expiry of board of directors
g
Qi Expiry
Haodon Independent director 6 Jun. 2013 Expiry of board of directors
g
Bi Xiuli Independent director Expiry 6 Jun. 2013 Expiry of board of directors
Sun Expiry
director 6 Jun. 2013 Expiry of board of directors
Zhigang
Qu
Senior executive, chief
Qingfen Left 31 Jan. 2013 Retired and left on 31 Jan. 2013
auditor of ministry of audit
g
Bai Senior executive, director of Expiry Expiry
6 Jun. 2013
Nianyue chief engineering office
Senior executive, Manager Expiry Expiry
Wu
of human resource 6 Jun. 2013
Yanzhen
department
37
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Senior executive, vice Expiry Expiry
Yu
president of production 6 Jun. 2013
Yongbin
department
Sun
Independent director Elected 6 Jun. 2013 General election of board of director
Ruize
Su Xin Independent director Elected 6 Jun. 2013 General election of board of director
Xu Elected
Independent director 6 Jun. 2013 General election of board of director
Jianjun
Quan Senior executive, manager Recruited after change of board of
Recruitment 6 Jun. 2013
Peng of sales department director
Senior executive, vice Recruitment
Wang
manager of the first Recruited after change of board of
Changzh 6 Jun. 2013
department of international director
ao
business
Shang Senior executive, manager Recruitment
Recruited after change of board of
Chengga of business administration 6 Jun. 2013
director
ng department
38
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
VIII. Financial Report
I. Auditor’s report
Whether the semi-annual report was audited?
□ Yes √ No
The semi-financial report of the Company has not audited.
II. Financial statements
Monetary unit of notes to financial statements: RMB yuan
1. Consolidated balance sheet
Prepared by Luthai Textile Co., Ltd.
Unit: RMB yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 652,081,049.99 919,734,646.13
Transactional financial assets 16,670,160.00 18,388,641.00
Notes receivable 116,979,344.00 158,739,877.01
Accounts receivable 182,583,199.21 228,133,619.46
Accounts paid in advance 148,691,207.68 96,214,664.63
Other accounts receivable 52,864,396.73 63,051,887.49
Inventories 1,774,831,723.47 1,684,292,327.27
Non-current assets due within 1 year
Other current assets 39,485,455.86 68,068,385.18
Total current assets 2,984,186,536.94 3,236,624,048.17
Non-current assets:
Long-term equity investment
Investing property 67,442,600.00 67,442,600.00
Fixed assets 4,161,934,061.38 4,186,294,298.29
Construction in progress 268,972,771.21 242,436,748.42
Engineering materials 32,730,518.84 12,057,574.11
Disposal of fixed assets
Intangible assets 314,276,310.16 319,013,492.53
39
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
R&D expense
Goodwill 20,613,803.29 20,613,803.29
Long-term deferred expenses 1,758,841.25 1,806,377.50
Deferred income tax assets 57,310,379.18 59,099,452.02
Other non-current assets 43,401,290.00 7,890,690.00
Total of non-current assets 4,968,440,575.31 4,916,655,036.16
Total assets 7,952,627,112.25 8,153,279,084.33
Current liabilities:
Short-term borrowings 1,035,508,754.29 1,415,078,463.05
Transactional financial liabilities
Notes payable 11,791,680.02 9,512,094.30
Accounts payable 303,214,569.44 327,495,627.56
Accounts received in advance 95,747,091.22 115,544,995.57
Employee’s compensation payable 300,015,881.44 347,614,652.54
Tax payable 82,289,036.12 50,873,887.19
Interest payable 2,108,528.82 2,670,262.59
Dividend payable 496,790.54 441,966.54
Other accounts payable 179,496,306.28 135,800,195.70
Non-current liabilities due within 1 year 61,787,000.00 12,851,550.00
Other current liabilities
Total current liabilities 2,072,455,638.17 2,417,883,695.04
Non-current liabilities:
Long-term borrowings
Bonds payable
Long-term payables 9,735,560.00 9,735,560.00
Special payable
Estimated liabilities
Deferred income tax liabilities 4,585,389.51 4,880,456.83
Other non-current liabilities 65,410,226.73 66,087,352.65
Total non-current liabilities 79,731,176.24 80,703,369.48
Total liabilities 2,152,186,814.41 2,498,587,064.52
Owners’ equity (or shareholders’ equity)
Paid-up capital (or share capital) 1,004,637,800.00 1,008,894,800.00
Capital reserves 1,219,073,817.36 1,230,191,471.42
40
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Less: Treasury stock 272,794,496.52 272,794,496.52
Specific reserves
Surplus reserves 579,274,370.26 579,274,370.26
Provisions for general risks
Retained profits 2,877,729,901.90 2,729,178,150.40
Foreign exchange difference -6,855,964.11 -6,043,037.30
Total equity attributable to owners of the
5,401,065,428.89 5,268,701,258.26
Company
Minority interests 399,374,868.95 385,990,761.55
Total owners’ (or shareholders’) equity 5,800,440,297.84 5,654,692,019.81
Total liabilities and owners’ (or
7,952,627,112.25 8,153,279,084.33
shareholders’) equity
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
2. Balance sheet of the Company
Prepared by Luthai Textile Co., Ltd.
Unit: RMB yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 434,261,203.67 561,697,936.17
Transactional financial assets 12,329,100.00 18,388,641.00
Notes receivable 95,179,237.45 126,547,171.09
Accounts receivable 182,776,868.16 227,340,296.02
Accounts paid in advance 174,592,922.07 93,344,833.30
Interests receivable
Dividends receivable
Other accounts receivable 28,820,372.66 33,841,380.59
Inventories 1,085,018,483.07 957,461,111.10
Non-current assets due within 1 year
Other current assets 15,993,758.15 35,410,586.78
Total current assets 2,028,971,945.23 2,054,031,956.05
Non-current assets:
Available-for-sale financial assets
41
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Hold-to-maturity investment
Long-term account receivable
Long-term equity investment 1,101,936,804.88 1,101,936,804.88
Investing property
Fixed assets 2,511,365,001.32 2,502,972,171.82
Construction in progress 126,345,688.09 131,087,397.75
Engineering materials 32,450,518.84 11,825,529.11
Disposal of fixed assets
Intangible assets 189,327,987.14 192,517,510.55
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 33,760,917.34 35,551,956.91
Other non-current assets 43,401,290.00 7,890,690.00
Total of non-current assets 4,038,588,207.61 3,983,782,061.02
Total assets 6,067,560,152.84 6,037,814,017.07
Current liabilities:
Short-term borrowings 506,983,792.80 674,742,046.27
Transactional financial liabilities
Notes payable 8,091,680.02 6,436,997.30
Accounts payable 217,666,508.76 140,562,402.98
Accounts received in advance 45,350,733.52 40,842,302.85
Employee’s compensation payable 253,343,765.49 285,681,845.09
Tax payable 64,721,781.21 31,703,094.57
Interest payable 63,048.24 766,191.29
Dividend payable 496,790.54 441,966.54
Other accounts payable 19,819,498.95 15,414,367.82
Non-current liabilities due within 1
61,787,000.00 12,851,550.00
year
Other current liabilities
Total current liabilities 1,178,324,599.53 1,209,442,764.71
Non-current liabilities:
Long-term borrowings
Bonds payable
42
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Long-term account payable
Special account payable
Estimated liabilities
Deferred income tax liabilities 1,849,365.01 2,758,296.16
Other non-current liabilities 31,482,191.53 31,819,761.55
Total non-current liabilities 33,331,556.54 34,578,057.71
Total liabilities 1,211,656,156.07 1,244,020,822.42
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 1,004,637,800.00 1,008,894,800.00
Capital reserves 1,225,426,498.45 1,236,544,152.51
Less: Treasury stock 272,794,496.52 272,794,496.52
Specific reserves
Surplus reserves 579,274,370.26 579,274,370.26
Provisions for general risks
Retained profits 2,319,359,824.58 2,241,874,368.40
Foreign exchange difference
Total owners’ (or shareholders’) equity 4,855,903,996.77 4,793,793,194.65
Total liabilities and owners’ (or
6,067,560,152.84 6,037,814,017.07
shareholders’) equity
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
3. Consolidated income statement
Prepared by Luthai Textile Co., Ltd.
Unit: RMB yuan
Item Amount in 2013 Amount in 2012
I. Total operating revenues 3,060,495,255.17 2,808,025,564.76
Including: Sales income 3,060,495,255.17 2,808,025,564.76
II. Total operating cost 2,580,359,544.62 2,455,925,494.34
Including: Cost of sales 2,184,574,937.90 2,055,106,728.52
Taxes and associate charges 31,735,647.82 2,360,934.93
Selling and distribution expenses 81,811,840.15 77,160,291.09
Administrative expenses 260,822,329.39 281,403,771.58
43
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Financial expenses 24,336,940.28 36,737,830.95
Asset impairment loss -2,922,150.92 3,155,937.27
Add: Gain/(loss) from change in fair value (“-” means
-1,718,481.00 -31,047,030.00
loss)
Gain/(loss) from investment (“-” means loss) 17,649,677.42 19,052,638.49
Including: share of profits in associates and joint ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 496,066,906.97 340,105,678.91
Add: non-operating income 18,069,755.20 20,152,942.07
Less: non-operating expense 883,756.29 2,142,808.56
Including: loss from non-current asset disposal 122,406.85 626,520.62
IV. Total profit (“-” means loss) 513,252,905.88 358,115,812.42
Less: Income tax expense 83,692,908.10 49,766,218.79
V. Net profit (“-” means loss) 429,559,997.78 308,349,593.63
Including: Net profit achieved by combined parties
before the combinations
Attributable to owners of the Company 416,175,890.38 301,503,288.19
Minority shareholders’ income 13,384,107.40 6,846,305.44
VI. Earnings per share -- --
(I) Basic earnings per share 0.43 0.3
(II) Diluted earnings per share 0.43 0.3
Ⅶ. Other comprehensive incomes -812,926.81 207,989.91
Ⅷ. Total comprehensive incomes 428,747,070.97 308,557,583.54
Attributable to owners of the Company 415,362,963.57 301,711,278.10
Attributable to minority shareholders 13,384,107.40 6,846,305.44
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
4. Income statement of the Company
Prepared by Luthai Textile Co., Ltd
Unit: RMB yuan
Item Amount in 2013 Amount in 2012
I. Total sales 2,226,181,431.10 2,196,615,482.05
Less: cost of sales 1,593,126,834.70 1,679,182,666.68
44
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Business taxes and surcharges 23,196,502.34 159,138.51
Distribution expenses 33,022,564.41 29,947,686.71
Administrative expenses 182,197,539.18 206,316,526.48
Financial costs 6,613,338.83 15,578,093.65
Assets impairment loss -504,581.85 1,827,033.97
Add: gain/(loss) from change in fair value (“-” means loss) -6,059,541.00 -24,697,730.00
Gain/(loss) from investment (“-” means loss) 17,735,127.42 14,455,234.49
Including: income form investment on associates and joint
ventures
II. Business profit (“-” means loss) 400,204,819.91 253,361,840.54
Add: non-business income 7,511,109.35 10,435,142.29
Less: non-business expense 629,353.82 354,789.74
Including: loss from non-current asset disposal 87,979.38 1,759.87
III. Total profit (“-” means loss) 407,086,575.44 263,442,193.09
Less: income tax expense 61,976,980.38 44,798,469.66
IV. Net profit (“-” means loss) 345,109,595.06 218,643,723.43
V. Earnings per share -- --
(I) Basic earnings per share 0.36 0.22
(II) Diluted earnings per share 0.36 0.22
VI. Other comprehensive income 0.00 0.00
VII. Total comprehensive income 345,109,595.06 218,643,723.43
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
5. Consolidated cash flow statement
Prepared by Luthai Textile Co., Ltd.
Unit: RMB yuan
Item Amount in 2013 Amount in 2012
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of
3,076,042,410.46 2,844,941,445.62
service
Tax refunds received 65,178,033.83 75,614,471.46
Other cash received relating to operating activities 30,348,137.90 28,219,248.54
Subtotal of cash inflows from operating activities 3,171,568,582.19 2,948,775,165.62
45
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Cash paid for goods and services 1,814,828,290.33 1,682,834,796.41
Cash paid to and for employees 606,961,463.74 569,733,755.88
Various taxes paid 138,126,952.15 142,705,722.41
Other cash payment relating to operating activities 120,904,955.80 136,461,423.46
Subtotal of cash outflows from operating activities 2,680,821,662.02 2,531,735,698.16
Net cash flows from operating activities 490,746,920.17 417,039,467.46
II. Cash flows from investing activities:
Cash received from withdrawal of investments
Cash received from return on investments
Net cash received from disposal of fixed assets, intangible
4,209,366.77 1,129,634.61
assets and other long-term assets
Net cash received from disposal of subsidiaries or other
951,000.00
business units
Other cash received relating to investing activities 20,837,332.08 22,371,353.29
Subtotal of cash inflows from investing activities 25,046,698.85 24,451,987.90
Cash paid to acquire fixed assets, intangible assets and other
219,615,586.74 421,406,791.09
long-term assets
Cash paid to investment
Net accrual of pledge loan
Net cash paid to acquire subsidiaries and other business units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities 219,615,586.74 421,406,791.09
Net cash flows from investing activities -194,568,887.89 -396,954,803.19
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Including: Cash received from minority shareholder
investments by subsidiaries
Cash received from borrowings 467,174,038.12 698,875,287.78
Cash received from issuance of bonds
Other cash received relating to financing activities 130,360,586.78 3,000,000.00
Subtotal of cash inflows from financing activities 597,534,624.90 701,875,287.78
Repayment of borrowings 792,551,770.03 796,047,762.80
Cash paid for interest expenses and distribution of
274,802,528.90 295,918,261.39
dividends or profit
Including: dividends or profit paid by subsidiaries to
minority shareholders
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Other cash payments relating to financing activities 193,972,143.65 2,300,000.00
Sub-total of cash outflows from financing activities 1,261,326,442.58 1,094,266,024.19
Net cash flows from financing activities -663,791,817.68 -392,390,736.41
IV. Effect of foreign exchange rate changes on cash and cash
-1,682,634.91 837,032.32
equivalents
V. Net increase in cash and cash equivalents -369,296,420.31 -371,469,039.82
Add: Opening balance of cash and cash equivalents 900,182,215.72 811,148,146.93
VI. Closing balance of cash and cash equivalents 530,885,795.41 439,679,107.11
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
6. Cash flow statement of the Company
Prepared by Luthai Textile Co., Ltd.
Unit: RMB yuan
Item Amount in 2013 Amount in 2012
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 2,244,250,614.20 2,266,873,036.21
Tax refunds received 32,806,344.91 44,706,953.12
Other cash received relating to operating activities 9,511,371.95 10,105,529.44
Subtotal of cash inflows from operating activities 2,286,568,331.06 2,321,685,518.77
Cash paid for goods and services 1,340,624,657.94 1,324,874,812.92
Cash paid to and for employees 457,184,019.46 434,380,999.92
Various taxes paid 74,503,362.27 64,907,965.96
Other cash payment relating to operating activities 60,464,105.86 75,107,632.03
Subtotal of cash outflows from operating activities 1,932,776,145.53 1,899,271,410.83
Net cash flows from operating activities 353,792,185.53 422,414,107.94
II. Cash flows from investing activities:
Cash received from retraction of investments
Cash received from return on investments
Net cash received from disposal of fixed assets, intangible assets and
4,209,366.77 729,634.61
other long-term assets
Net cash received from disposal of subsidiaries or other business
951,000.00
units
Other cash received relating to investing activities 20,079,492.10 16,817,374.57
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Subtotal of cash inflows from investing activities 24,288,858.87 18,498,009.18
Cash paid to acquire fixed assets, intangible assets and other
143,851,952.85 253,161,722.71
long-term assets
Cash paid for investment 5,000,000.00
Net cash paid to acquire subsidiaries and other business units
Other cash payments relating to investing activities 1,100,000.00
Subtotal of cash outflows from investing activities 144,951,952.85 258,161,722.71
Net cash flows from investing activities -120,663,093.98 -239,663,713.53
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Cash received from borrowings 292,858,376.63 277,649,521.46
Cash received from shares issued
Other cash received relating to financing activities 35,410,586.78
Subtotal of cash inflows from financing activities 328,268,963.41 277,649,521.46
Repayment of borrowings 407,197,239.85 353,580,376.87
Cash paid for interest expenses and distribution of dividends or
260,148,657.86 281,725,956.67
profit
Other cash payments relating to financing activities 140,072,143.65
Sub-total of cash outflows from financing activities 807,418,041.36 635,306,333.54
Net cash flows from financing activities -479,149,077.95 -357,656,812.08
IV. Effect of foreign exchange rate changes on cash and cash
-9,570.27 203,101.48
equivalents
V. Net increase in cash and cash equivalents -246,029,556.67 -174,703,316.19
Add: Opening balance of cash and cash equivalents 559,095,505.76 443,347,389.73
VI. Closing balance of cash and cash equivalents 313,065,949.09 268,644,073.54
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
7. Consolidated statement of changes in owners’ equity
Prepared by Luthai Textile Co., Ltd
Amount in this period
Unit: RMB yuan
Reporting period
Equity attributable to owners of the Company
Paid-u
p Minority Total owners’
Item capital Less: interests equity
Paid-up capital Less: treasury Paid-up capital (or Capital
Capital reserve (or Capital reserve treasury Less: treasury Paid-up capital (or
(or share capital) stock share capital) reserve
share stock stock share capital)
capital
)
I. Balance at the end of the
1,008,894,800.00 1,230,191,471.42 272,794,496.52 579,274,370.26 2,729,178,150.40 -6,043,037.30 385,990,761.55 5,654,692,019.81
previous year
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of
1,008,894,800.00 1,230,191,471.42 272,794,496.52 579,274,370.26 2,729,178,150.40 -6,043,037.30 385,990,761.55 5,654,692,019.81
the year
III. Increase/ decrease of amount
-4,257,000.00 -11,117,654.06 148,551,751.50 -812,926.81 13,384,107.40 145,748,278.03
in the year (“-” means decrease)
(I) Net profit 416,175,890.38 13,384,107.40 429,559,997.78
(II) Other comprehensive -812,926.81 -812,926.81
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
incomes
Subtotal of (I) and (II) 416,175,890.38 -812,926.81 13,384,107.40 428,747,070.97
(III) Capital paid in and
-4,257,000.00 -11,117,654.06 -15,374,654.06
reduced by owners
1. Capital paid in by owners -4,257,000.00 -15,950,865.00 -20,207,865.00
2. Amounts of share-based
payments recognized in owners’ 4,801,767.48 4,801,767.48
equity
3. Others 31,443.46 31,443.46
(IV) Profit distribution -267,624,138.88 -267,624,138.88
1. Appropriations to surplus
reserves
2. Appropriations to general
risk provisions
3. Appropriations to owners
-267,624,138.88 -267,624,138.88
(or shareholders)
4. Other
(V) Internal carry-forward of
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
IV. Closing balance 1,004,637,800.00 1,219,073,817.36 272,794,496.52 579,274,370.26 2,877,729,901.90 -6,855,964.11 399,374,868.95 5,800,440,297.84
Amount last year
Unit: RMB yuan
Last year
Equity attributable to owners of the Company
Paid-u
p Minority Total owners’
Item Less: interests equity
capital
Paid-up capital (or treasur Paid-up capital (or Capital
Capital reserve Less: treasury stock (or Capital reserve Less: treasury Paid-up capital (or
share capital) y share capital) reserve
share stock share capital)
stock
capital
)
I. Balance at the end of the
1,008,954,800.00 1,200,110,642.06 515,895,752.76 2,367,189,767.76 -6,050,509.48 383,807,103.40 5,469,907,556.50
previous year
Add: retrospective
adjustments due to business
combinations under the same
control
Add: change of accounting
policy
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Correction of errors in
previous periods
Other
II. Balance at the beginning of
1,008,954,800.00 1,200,110,642.06 515,895,752.76 2,367,189,767.76 -6,050,509.48 383,807,103.40 5,469,907,556.50
the year
III. Increase/ decrease of
amount in the year (“-” means -60,000.00 30,080,829.36 272,794,496.52 63,378,617.50 361,988,382.64 7,472.18 2,183,658.15 184,784,463.31
decrease)
(I) Net profit 707,857,544.14 7,992,824.61 715,850,368.75
(II) Other comprehensive
7,472.18 7,472.18
incomes
Subtotal of (I) and (II) 707,857,544.14 7,472.18 7,992,824.61 715,857,840.93
(III) Capital paid in and
-60,000.00 30,080,829.36 272,794,496.52 19,249,218.56 -223,524,448.60
reduced by owners
1. Capital paid in by
-60,000.00 -241,500.00 272,794,496.52 19,249,218.56 -253,846,777.96
owners
2. Amounts of share-based
payments recognized in owners’ 30,322,209.16 30,322,209.16
equity
3. Others 120.20 120.20
(IV) Profit distribution 63,378,617.50 -345,869,161.50 -25,058,385.02 -307,548,929.02
1. Appropriations to
63,378,617.50 -63,378,617.50
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to -282,490,544.00 -25,058,385.02 -307,548,929.02
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
owners (or shareholders)
4. Other
(V) Internal carry-forward of
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the
period
2. Used in the period
(Ⅶ) Other
IV. Closing balance 1,008,894,800.00 1,230,191,471.42 272,794,496.52 579,274,370.26 2,729,178,150.40 -6,043,037.30 385,990,761.55 5,654,692,019.81
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
8. Statement of changes in owners’ equity of the Company
Prepared by Luthai Textile Co., Ltd.
Reporting period
Unit: RMB yuan
Reporting period
Specifi
General
Item Paid-up capital (or Less: treasury c Total owners’
Capital reserve Surplus reserve risk Retained profit
share capital) stock reserv equity
reserve
e
I. Balance at the end of the previous year 1,008,894,800.00 1,236,544,152.51 272,794,496.52 579,274,370.26 2,241,874,368.40 4,793,793,194.65
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 1,008,894,800.00 1,236,544,152.51 272,794,496.52 579,274,370.26 2,241,874,368.40 4,793,793,194.65
III. Increase/ decrease of amount in the year (“-” means
-4,257,000.00 -11,117,654.06 77,485,456.18 62,110,802.12
decrease)
(I) Net profit 345,109,595.06 345,109,595.06
(II) Other comprehensive incomes
Subtotal of (I) and (II) 345,109,595.06 345,109,595.06
(III) Capital paid in and reduced by owners -4,257,000.00 -11,117,654.06 -15,374,654.06
1. Capital paid in by owners -4,257,000.00 -15,950,865.00 -20,207,865.00
2. Amounts of share-based payments recognized in
4,801,767.48 4,801,767.48
owners’ equity
3. Others 31,443.46 31,443.46
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
(IV) Profit distribution -267,624,138.88 -267,624,138.88
1. Appropriations to surplus reserves
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -267,624,138.88 -267,624,138.88
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital) from capital
public reserves
2. New increase of capital (or share capital) from surplus
reserves
3. Surplus reserves for making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
IV. Closing balance 1,004,637,800.00 1,225,426,498.45 272,794,496.52 579,274,370.26 2,319,359,824.58 4,855,903,996.77
Last year
Unit: RMB yuan
Last year
Specifi Gener
Item Paid-up capital (or share Less: treasury c al risk Total owners’
Capital reserve Surplus reserve Retained profit
capital) stock reserv reserv equity
e e
I. Balance at the end of the previous year 1,008,954,800.00 1,206,463,323.15 515,895,752.76 1,953,957,354.86 4,685,271,230.77
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 1,008,954,800.00 1,206,463,323.15 515,895,752.76 1,953,957,354.86 4,685,271,230.77
III. Increase/ decrease of amount in the year (“-”
-60,000.00 30,080,829.36 272,794,496.52 63,378,617.50 287,917,013.54 108,521,963.88
means decrease)
(I) Net profit 633,786,175.04 633,786,175.04
(II) Other comprehensive incomes
Subtotal of (I) and (II) 633,786,175.04 633,786,175.04
(III) Capital paid in and reduced by owners -60,000.00 30,080,829.36 272,794,496.52 -242,773,667.16
1. Capital paid in by owners -60,000.00 -241,500.00 272,794,496.52 -273,095,996.52
2. Amounts of share-based payments
30,322,209.16 30,322,209.16
recognized in owners’ equity
3. Others 120.20 120.20
(IV) Profit distribution 63,378,617.50 -345,869,161.50 -282,490,544.00
1. Appropriations to surplus reserves 63,378,617.50 -63,378,617.50
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -282,490,544.00 -282,490,544.00
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital)
from capital public reserves
2. New increase of capital (or share capital)
from surplus reserves
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
3. Surplus reserves for making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
IV. Closing balance 1,008,894,800.00 1,236,544,152.51 272,794,496.52 579,274,370.26 2,241,874,368.40 4,793,793,194.65
Legal representative: Liu Shizhen Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
(III) Company Profile
Luthai Textile Co., Ltd. (hereinafter referred to as the Company) is a joint venture invested by Zibo Lucheng Textile Inve
stment Co., Ltd (originally named Zibo Lucheng Textile Co., Ltd, hereinafter referred to as Lucheng Textile) and Thailand
Tailun Textile Co., Ltd. On Feb. 3, 1993, the Company is approved by the former Ministry of Foreign Trade and Econo
my of the State (1993) in WJMZEHZ No. 59 to convert into a joint-stock enterprise. Zibo Administration for Industry an
d Commerce issued the Company corporate business license with the registration No. of QGLZZZ No. 000066. In July 19
97, the Company is approved by the Securities Committee of the Department of the State in the ZWF (1997) No. 47 to i
ssue 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 Exchan
ge on August 19, 1997 with B-shares stock code of 200726. On November 24, 2000, approved by ZJGSZ [2000] No.199
by CSRC, the Company increased publication of 50 million shares of general share (A-shares) at the book value of RM
B 1.00, which are listed on the Shenzhen Stock Exchange on December 25, 2000 with A-shares stock code of 000726 thr
ough approval by Shenzhen Stock Exchange with No. (2000) 162 Listing Notice. As approved by 2000 Shareholders’ Gen
eral Meeting in May, 2001, the Company carried out the distribution plan that 10 shares of capital public reserve are con
verted to 3 more shares for each 10 shares. As approved by Resolutions of 2001 Shareholders’ General Meeting in June
2002, the Company implemented the distribution plan that 10 shares of capital public reserve are converted 3 more shares
for each 10 shares again. As approved by 2002 Shareholders’ General Meeting in May 2003, the Company implemented
the distribution plan that 10 shares of capital public reserve are 2 more shares for each 10 shares, and inner employees’ s
hared increased to 40.56 million shares. As examined and approved by ZJGSZ No. [2000] 199 of CSRC, the inner emplo
yees’ shares will start circulation 3 years later since listing on the A-share market. On 25 Dec. 2003, the inner employee
s’ shares reach 3 years since listing on the A-share stock market, and they set out circulation on 26, Dec. 2003. As appr
oved by the Shareholders’ General Meeting 2006 held in June 2007, the Company implemented the plan on converting 10
shares to all its shareholders with capital reserves for every 10 shares. After capitalization, the registered capital of the C
ompany was RMB 844.8648 million. The Company, in accordance with the official reply on approving Luthai Textile Co.,
Ltd. to issue additional shares (ZJXK [2008] No. 890 document) from CSRC, issued the Renminbi common shares (A sh
ares) amounting to 150 million shares on 8 Dec. 2008. According to the relevant resolution of the 2nd Special Shareholder
s’ General Meeting for 2011, the relevant resolution of the 15th Session of the 6th Board of Directors, the Opinion of Chi
na Securities Regulatory Commission on the Restricted Share Incentive Plan of Luthai Textile Co., Ltd. (Shang-Shi-Bu-Han
[2011] No. 206), the Company applied for a registered capital increment of RMB 14.09 million, which was contributed b
y restricted share incentive receivers with monetary funds. According to the Company’s resolution of the Twenty-Third Ses
sion of the Sixth Board of Directors "On the Cancellation of Part of the Repurchase which not Meet With the Conditions
of the Original Incentives were Granted Restricted Stock Incentive Target Motion" on 13, Aug. 2012, the Company had
made shares repurchased and canceled of the original incentive targets which not met with the conditions of incentives, wi
th the total amount of 60,000.00 awarded shares.
According to the Company’s Twenty-sixth meeting of the sixth board of directors "On the Cancellation of Part of the Repurchase
which not Meet With the Conditions of the Original Incentive Not Unlock Restricted Stock Motion," "On the Cancellation of All
Incentive Targets Repo the Second Period Has Not Yet Unlocked Unlocking Restricted Stock Motion " on 27, Mar. 2013, the
Company had made shares repurchased and canceled of the original incentive targets which not met with the conditions of incentives,
with the total amount of 4,257,000.00 awarded shares. As at 30 Jun. 2012, the Company’s registered capital was RMB 100,463,780.
The Company’s registered address: No. 11, Mingbo Road, Hi-tech Development Zone, Zibo, Shandong
The Company’s legal representative: Liu Shizhen
The Company’s business scope includes production of cotton yarn, yarn dyed fabrics, shirts, fashion accessories, health underwear
and other textile products and their mating products; domestic and overseas sale of the Company’s self-produced products and
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
provision of after-sales services; acquisition and export of products not under exclusive rights or quota licenses; and hotel,
guesthouses and catering services.
The Company’s financial statements have been approved for issue by the Board of Directors of the Company on 14 Aug. 2013.
(IV) Main accounting policies and estimates and corrections of previous accounting errors
1. Basis for the preparation of financial statements
With the going-concern assumption as the basis, the Company prepared its financial statements in light of the actual transactions and
events, as well as the Basic Standard and 38 specific standards of Accounting Standards for Business Enterprises issued by the
Ministry of Finance of the PRC on 15 Feb. 2006, the Application Guidance of Accounting Standards for Business Enterprises, the
Interpretation of Accounting Standards for Business Enterprises and other regulations issued thereafter (jointly referred to as “the
Accounting Standards for Business Enterprises”), and the Rules for Preparation Convention of Disclosure of Public Offering
Companies No.15—General Regulations for Financial Reporting (revised in 2010) by China Securities Regulatory Commission
(CSRC).
In accordance with the Accounting Standards for Business Enterprises, accounting activities of the Group were conducted on the
accrual basis. Except for some financial instruments, the financial statements were prepared on the basis of historical costs. Where
impairment occurred in an asset, the corresponding impairment provision was withdrawn according to relevant rules.
2. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements for the reporting period prepared by the Group are in compliance with the requirements of the Accounting
Standards for Business Enterprises, factually and completely presenting the Company’s and the Group’s financial positions as on 30
Jun. 2012, and operating results, cash flows and other relevant information in Jan.-Jun. 2012. Furthermore, these financial statements,
in all material respects, are also in line with relevant disclosure requirements for financial statements and notes thereof stipulated in
the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15—General Regulations for Financial
Reporting (revised in 2010) by CSRC.
3. Fiscal period
The Group’s accounting periods are divided into annual periods (yearly) and interim periods. The interim period is a reporting period
which is shorter than a full fiscal year. Gregorian calendar is adopted for fiscal year of the Company, namely from 1 Jan. to 31 Dec.
every year.
4. Recording currency
Renminbi (RMB) is the prevailing currency used in the main economic circumstances of the Company and its domestic subsidiaries.
In light of the prevailing currency used in their main economic circumstances of the Company’s overseas subsidiaries, they adopt the
Hong Kong dollars as the recording currency. When preparing the financial statements for the reporting period, the Group adopted
RMB as the recording currency.
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
5. Accounting treatment methods for business combinations under the same control and those not under
the same control.
(1) Business combinations under the same control
A business combination under the same control is a business combination in which all the enterprises involved in the combination are
ultimately controlled by the same party or parties both before and after the business combination and on which the control is not
temporary. In a business combination under the same control, the party which obtains control of other enterprise(s) involved in the
business combination on the combining date is the combining party, and the other enterprise(s) involved in the business combination
is (are) the combined party. The "combining date" refers to the date on which the combining party obtains actual control on the
combined party.
The assets and liabilities that the combining party obtains in a business combination shall be measured on the basis of their carrying
amount in the combined party on the combining date. As for the balance between the carrying amount of the net assets obtained by
the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional
paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted.
The direct cost for the business combination of the combining party shall be recorded into the profits and losses at the current period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises are not ultimately
controlled by the same party or the same parties both before and after the business combination. In a business combination not under
the same control, the party which obtains the control on other combining enterprise(s) on the purchase date is the acquirer, and other
combining enterprise(s) is (are) the acquiree. The "acquisition date" refers to the date on which the acquirer actually obtains the
control on the acquiree.
As for business combinations not under the same control, the combination costs shall be the fair values, on the acquisition date, of the
assets paid, the liabilities incurred or assumed and the equity securities issued by the acquirer in exchange for the control on the
acquiree, and intermediary agency fees for auditing, legal, consulting services, etc. and other administrative expenditures incurred for
the business combination, which were recorded in the profits and losses at the current period when incurred. The trading expenditures
arising from the acquirer’s issuance of equity or liabilities securities as the consideration for the business combination are recorded in
the initial recognition amount for the equity or liabilities securities. The contingent consideration involved is recorded in the
combination costs according to its fair value on the acquisition date. Where new or further evidence against the existing
circumstances on the acquisition date occurs within 12 months after the acquisition date, which makes it necessary to adjust the
contingent consideration, the combined business reputation is adjusted accordingly. For a business combination realized by two or
more transactions of exchange, in the Group’s consolidated financial statements, as for the equity interests of the acquiree held by the
Group before the acquisition date, they are re-measured according to their fair value on the acquisition date. The difference between
their fair value and their carrying amount is recorded in investment gains for the period comprising the acquisition date. Other
comprehensive incomes arising from the equity interests of the acquiree held by the Group before the acquisition date are transferred
to investment gains at the current period. The combination costs are the summation of the fair value on the acquisition date of the
equity interests of the acquiree held by the Group before the acquisition date and the fair value on the acquisition date of the equity
interests of the acquiree acquired by the Group on the acquisition date.
The combination costs of the acquirer and the identifiable net assets obtained in the combination are both measured at their fair
values on the acquisition date. The positive balance between the combination costs and the fair value of the identifiable net assets the
acquirer obtains from the acquiree is recognized as business reputation. The acquirer shall, pursuant to the following provisions, treat
the balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree: a. it shall
60
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
reexamine the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities it obtains from the
acquiree as well as the combination costs; b. if, after the reexamination, the combination costs are still less than the fair value of the
identifiable net assets it obtains from the acquiree, it shall record the balance into the profits and losses of the current period.
As for the unrecognized deductible temporary differences of the acquiree obtained by the acquirer due to their not satisfying the
recognition criteria for deferred income tax assets on the acquisition date, if new or further information within 12 months after the
acquisition date shows that the relevant circumstances on the acquisition date has existed and that the economic benefits arising from
the deductible temporary differences of the acquiree on the acquisition date are expected to be realized, the corresponding deferred
income tax assets are recognized and the business reputation is written down in the mean time. If the business reputation is not
sufficient to offset, the difference is recognized in the profits and losses at the current period. Except for the aforesaid circumstance,
the recognized deferred income tax assets in relation to the business combination are recorded in the profits and losses at the current
period.
6. Preparation of consolidated financial statements
(1) Preparation methods for consolidated financial statements
1) Recognition principles of the consolidation scope
The scope of consolidated financial statements shall be confirmed based on the control. Control means the Company can decide the
financial and manage policy of investee entity and have authority to earn the benefit from the investee entity. The consolidation scope
includes the Company and all its subsidiaries. The Company’s subsidiaries refer to the enterprises or entities controlled by the
Company.
2) Preparation methods for consolidated financial statements
The Group consolidates a subsidiary from the date when the Group obtains actual control over the subsidiary’s net assets and
production and operation decision-making and de-consolidates it from the date when such control ceases. As for a disposed
subsidiary, its operating results and cash flows before the disposal date are properly included in the consolidated income statement
and the consolidated cash flow statement. As for a subsidiary disposed in the current period, the opening accounts in the consolidated
balance sheet are not restated. For a subsidiary acquired in a business combination not under the same control, its operating results
and cash flows after the acquisition date are properly included in the consolidated income statement and the consolidated cash flow
statement, and the opening accounts and comparative accounts in the consolidated financial statements are not restated. For a
subsidiary acquired in a business combination under the same control, its operating results and cash flows for the period from the
beginning of the reporting period to the combination date are properly included in the consolidated income statement and the
consolidated cash flow statement, and the comparative accounts in the consolidated financial statements are restated in the mean
time.
In the preparation of the consolidated financial statements, where a subsidiary adopts different accounting policies or accounting
periods from those of the Company, the subsidiary’s financial statements are adjusted according to the Company’s accounting policy
and accounting periods. For a subsidiary obtained in a business combination not under the same control, its financial statements are
adjusted on the basis of the fair value of its identifiable net assets on the acquisition date.
All significant balances, transactions and unrealized profits within the Group are offset in the preparation of the consolidated
financial statements.
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The portions in a subsidiary’s shareholders’ equity and net current profits and losses that are not distributable to the Company are
separately presented, as minority interests and minority shareholder gains and losses respectively, under the shareholders’ equity item
and the net profit item in the consolidated financial statements. The portion in the subsidiary’s current net gains and losses that
belongs to minority interests is presented as “minority shareholder gains and losses” under the net profit item in the consolidated
income statement. Where the subsidiary’s losses distributable to minority shareholders exceed the portion in the subsidiary’s opening
owners’ equity distributable to minority shareholders, minority interests are offset.
Where the Company loses control over a former subsidiary due to disposal of some equity investment or other reasons, the residual
equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration
obtained from the equity disposal and the fair value of the residual equity interests, minus the portion in the former subsidiary’s net
assets measured on a continuous basis from the acquisition date that is distributable to the Company according to its former
shareholding ratio in the subsidiary, is recorded in the investment gains for the reporting period when the Company’s control over the
subsidiary ceases. Other comprehensive incomes in relation to the former equity investment in the subsidiary are transferred to the
investment gains at the current period when the Company’s control over the subsidiary ceases. Later on, subsequent measurement is
carried out on the residual equity interests in accordance with the “Accounting Standards for Business Enterprises No.2—Long-term
Equity Investment” or the “Accounting Standards for Business Enterprises No.22—Recognition and Measurement of Financial
Instruments” and other relevant regulations. For more details, please refer to “Long-term Equity Investment” or “Financial
Instruments”
7. Recognition standard for cash and cash equivalents
The term “cash” refers to cash on hand and deposits that are available for payment at any time. The term “cash equivalents” refers to
short-term ( within 3 months from the purchase date) and highly liquid investments that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of change in value.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Foreign currency
1) Translation of foreign currency transactions
At the time of initial recognition of a foreign currency transaction, the Group shall convert the amount in a foreign currency into
amount in its Renminbi at the spot exchange rate (generally refer to the middle price of market exchange rate published by the
People’s Bank of China, the same below) on the day the transaction is occurred. Of which, as for such transactions as foreign
exchange or involving in foreign exchange, the Company shall converted into amount in the Renminbi at actual exchange rate the
transaction is occurred.
2) Treatment method for the foreign currency monetary items and foreign currency non-monetary
items:
On the balance sheet date, the foreign currency monetary items are translated at the spot exchange rate on the date. Exchange
differences are recorded in the profits and losses at the current period except for the following circumstances: ① E xchange
differences arising from the special foreign currency borrowings for the acquisition and construction of assets eligible for
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capitalization are treated in accordance with the principle of borrowing cost capitalization; ② E xchange d
net investment hedging instruments in an overseas operation are recorded in other comprehensive incomes and can be recognized in
the profits and losses at the current period only when the net investment is disposed; and ③ E xchange d
changes in the carrying balances other than the amortized costs of foreign currency monetary items available for sale are recorded in
other comprehensive incomes.
Foreign currency non-monetary items measured at historical costs are translated into RMB at the spot exchange rate on the
transaction date. The foreign currency non-monetary items measured at the fair value are translated at the spot exchange rate on the
fair value confirming date, from which the exchange difference is treated as change in fair value (including change in exchange rate)
and recorded in the profit and loss of the current period, or treated as other comprehensive incomes and recorded in the capital
reserves.
(2) Translation of foreign currency financial statements
Where the consolidated financial statements involve an overseas operation and foreign currency monetary items form in a substantial
basis on the net investment in the overseas operation, exchange differences arising from exchange rate changes are recorded in the
“translation difference of foreign currency statements” item under the owners’ equity item; and recorded in the profits and losses at
the reporting period of the disposal when the overseas operation is disposed.
The foreign currency financial statements of an overseas operation are translated in RMB in accordance with the following methods:
The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet date. Among the
owner’s equity items, except the ones as “retained profits”, others shall be translated at the spot exchange rate at the time when they
are incurred. The income and expense items in the profits statements shall be translated at the average exchange rate of the current
period on transaction date. The opening retained profit is the closing retained profit as of the previous year after translation; The
closing retained profit is measured and stated according to profit distribution items after translation; And the difference between the
asset items and the summation of the liability and shareholders’ equity items after translation, as the translation difference of foreign
currency statements, is recognized in other comprehensive incomes and is presented separately under the shareholders’ equity item in
the balance sheet. Where an overseas operation is disposed and the Group’s control on the overseas operation ceases, the foreign
currency statement translation difference in relation to the overseas operation and presented under the shareholders’ equity items in
the balance sheet is, all or according to the disposal rate of the overseas operation, transferred to the profits and losses at the reporting
period comprising the disposal.
Foreign currency cash flows and cash flows generated by overseas subsidiaries are translated at the average exchange rate for the
current period on the date when the cash flow is generated. The influence on cash due to change of exchange rate shall be presented
separately under the cash flow statement.
The opening amounts and the actual amounts in the previous year are presented on the basis of the translated financial statements for
the previous year.
9. Financial instruments
Financial instruments refer to a kind of contract that forms the financial assets of an enterprise and at the same forms the financial
liabilities or equity instruments of other enterprises. Financial instruments include financial assets and financial liabilities as well as
equity instruments.
(1) Classification of financial assets
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Financial instruments divided into financial assets and financial liabilities.
(2) Recognition basis and measurements for financial instruments
1. The category, confirm and measure method of financial assets
Financial assets bought in and sold out in the conventional way are recognized and de-recognized in accordance with the transaction
dates. In the initial recognition, financial assets are divided into financial assets measured at fair values and whose changes are
recorded in current profits and losses, held-to-maturity investments, loans and accounts receivables, and available-for-sale financial
assets. In the initial recognition, a financial asset is measured at its fair value. For a financial asset measured at fair value and whose
changes are recorded in current gains and losses, the relevant trading expenditures are directly recorded in the gains and losses at the
current period. And the trading expenditures for the other financial assets are recorded in the initially recognized amount.
① Financial assets measured at fair values and whose changes are recorded in current profits and losses
Such financial assets include transactional financial assets and financial assets designated to be measured at fair values and whose
changes are recorded in current gains and losses. The Group’s financial assets measured at fair values and whose changes are
recorded in current profits and losses are all transactional financial assets.
A transactional financial asset refers to a financial asset meeting any of the following requirements: A. The purpose to acquire the
financial asset is mainly for selling or repurchase of it in the near future; B. Forming a part of the identifiable combination of
financial instruments which are managed in a centralized way and for which there are objective evidences proving that the Group
may manage the combination by way of short-term profit making in the near future; and C. Being a derivative instrument, excluding
the designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee
contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quoted
price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity
instruments.
A transactional financial asset is subsequently measured at the fair value. The gains and losses arising from the fair value changes, as
well as the dividend and interest incomes from the financial asset, are recorded in the gains and losses for the current period.
② H eld-to-maturity investments
A held-to-maturity investment refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount
of repo price and which the Group holds for a definite purpose or the Group is able to hold until its maturity.
A held-to-maturity investment is subsequently measured according to the amortized cost using the actual interest rate method. The
gains or losses arising from de-recognition, impairment or amortization of the investment are recorded in the profits and losses for
the current period.
The actual interest rate method refers to the method by which the post-amortization costs and the interest incomes of different
installments or interest expenses are calculated in light of the actual interest rates of the financial assets or financial liabilities
(including a set of financial assets or financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future
cash flow of a financial asset or financial liability within the predicted term of existence or within a shorter applicable term into the
current carrying amount of the financial asset or financial liability.
When calculating the actual interest rate, the Group predicts the future cash flow (not taking into account the future credit losses) on
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the basis of taking into account all the contractual provisions concerning the financial asset or financial liability. The various fee
charges, trading expenses, reduced values, premiums, etc., which are paid or collected by the parties to a financial asset or financial
liability contract and which form a part of the actual interest rate, are also taken into account in the determination of the actual
interest rate.
③ Loans and accounts receivable
Loans and accounts receivable refer to the non-derivative financial assets for which there is no quoted price in the active market and
of which the repo amount is fixed or determinable. The financial assets defined by the Group as loans and accounts receivable
include notes receivable, accounts receivable, interest receivable, dividend receivable, other receivables, etc..
Loans and accounts receivable are subsequently measured according to the amortized cost using the actual interest rate method. The
gains or losses arising from de-recognition, impairment or amortization of the loans and accounts receivable are recorded in the
profits and losses for the current period.
④ A vailable-for-sale financial assets
Available-for-sale financial assets include the non-derivative financial assets which are designated as available for sale when they are
initially recognized, as well as the financial assets other than the financial assets measured at fair values and whose changes are
recorded in current gains and losses, loans and accounts receivable and held-to-maturity investments.
Available-for-sale financial assets are subsequently measured at their fair values. Impairment losses and the exchange differences of
foreign currency monetary financial assets in relation to the amortized cost are recorded in the profits and losses for the current
period. Other gains or losses arising from fair value changes are recognized as other comprehensive incomes and recorded in the
capital reserves, and transferred out and recorded in the profits and losses for the current period when the financial asset is
de-recognized.
Interest obtained during the period of holding an available-for-sale financial asset and the cash dividends declared and distributed by
an invested party are recorded in investment gains.
2. The category, confirm and measure method of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair values and whose changes are
recorded in current gains and losses and other financial liabilities. Financial liabilities are initially recognized at their fair values. As
for a financial liability measured at fair value and whose changes are recorded in current gains and losses, the relevant trading
expense is directly recorded in the profits and losses for the current period. As for other financial liabilities, the relevant trading
expenses are recorded in the initially recognized amounts.
① Financialliabilities m easured at fair values and w hose changes are recorded in current gains and losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities designated to be measured at fair
values and whose changes are recorded in current gains and losses in the initial recognition under the same conditions where such
financial assets are divided into transactional financial assets and financial assets designated to be measured at fair values and whose
changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and losses are subsequently measured at
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their fair values. Gains or losses arising from the fair value changes, as well as the dividend and interest expenses in relation to the
said financial liabilities, are recorded in the profits and losses for the current period.
② O ther financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted price in an active market and
whose fair value cannot be reliably measured and which must be settled by delivering the equity instrument, it is subsequently
measured on the basis of costs. Other financial liabilities are subsequently measured according to the amortized cost using the actual
interest rate method. Gains or losses arising from de-recognition or amortization of the said financial liabilities is recorded in the
profits and losses for the current period.
(3) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability
be terminated in all or partly. Where the Group (debtor) enters into an agreement with a creditor so as to substitute the existing
financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability,
and at the same time recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits
and losses of the current period for the gap between the book value which has been terminated from recognition and the
considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed).
(3) The basis and measurement method of the transfer of the financial capital
In addition to the financial assets calculated through the fair value measurement which the change is counted as the current gains and
losses, the group checks the book value of the other financial assets in every balance sheet date. If there are any objective evidences
to prove the impairment of the financial assets the impairment provision should be made.
The Group carries out a separate impairment test for every financial asset which is individually significant. As for a financial asset
which is individually insignificant, an impairment test is carried out separately or in the financial asset group with similar credit risk.
Where the financial asset (individually significant or insignificant) is found not impaired after the separate impairment test, it is
included in the financial asset group with similar credit risk and tested again on the group basis. Where the impairment loss is
recognized for an individual financial asset, it is not included in the financial asset group with similar credit risk for an impairment
test.
① Im pairm ent of held-to-maturity investments, loans and accounts receivable
Where a financial asset measured on the basis of costs or amortized costs is impaired, the carrying amount of the said financial asset
is written down to the current value of the predicted future cash flow. The amount written down is recognized as the impairment loss
of the asset and is recorded in the profits and losses for the current period. Where a financial asset is recognized as having suffered
from any impairment loss, if there is any objective evidence proving that the value of the said financial asset has been restored, and it
is objectively related to the events that occur after such loss is recognized, the impairment losses as originally recognized are
reversed. The reversed carrying amount of the said financial asset does not exceed the amortized cost of the said financial asset on
the day of reverse under the assumption that no provision is made for the impairment.
② Available-for-sale financial assets devalue
When the comprehensive factors related shows that the fair value of the drops significantly or not contemporarily, it means that avail
able-for-sale equity instrument investment devalues. And “drop significantly” means that the fair value totally falls by more than 2
0%; “drop not contemporarily” means that the fair value has fell for 12 months in succession.
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When available-for-sale financial assets devalues, the grand total losses counted as the capital reserve for the decline of the fair valu
e should be rolled out and counted into the current gains and losses. The roll-out accumulating losses equal to the initial acquisition c
ost of capital deducted the recovered principal and the amortized, current fair value and the impairment losses included in the gains a
nd losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within the accounting periods thereafter,
there is any objective evidence proving that the value of the said financial asset has been restored and the restoration is objectively
related to the events that occur after the impairment loss was recognized, the originally recognized impairment loss is reversed. The
impairment losses on the available-for-sale equity instrument investments are reversed and recognized as other comprehensive
incomes, and the impairment losses on the available-for-sale liability instruments are reversed and recorded in the profits and losses
for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price in the active market and whose
fair value cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument
investment and which must be settled by delivering the said equity investment, is not reversed.
(4) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability
be terminated in all or partly. Where the Group (debtor) enters into an agreement with a creditor so as to substitute the existing
financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability,
and at the same time recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits
and losses of the current period for the gap between the book value which has been terminated from recognition and the
considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed).
(5) Recognition method of fair values of financial assets and liabilities
The “fair value” refers to the amount, at which both parties to a transaction who are familiar with the condition exchange assets or
clear off debts under fair conditions. As for the financial instrument for which there is an active market, the Group determines its fair
value using the quoted price in the active market. The quoted prices in the active market refer to the prices, which are easily available
from the stock exchange, brokers, industry associations, pricing service institutions, etc. at a fixed term, and which represent the
prices at which actually incurred market transactions are made under fair conditions. Where there is no active market for a financial
instrument, the Group adopts value appraisal techniques to determine its fair value. The value appraisal techniques mainly include the
prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the
current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization
method and the option pricing model, etc.
(6) Withdrawal of impairment provision for financial assets and the measure method (excluding accounts
receivable)
For the financial assets other than the financial assets measured at fair values and whose changes are recorded in current gains and
losses, the Group runs a check on their carrying amounts on every balance sheet date. Where there is any objective evidence proving
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that such a financial asset has been impaired, an impairment provision is made.
The Group carries out a separate impairment test for every financial asset which is individually significant. As for a financial asset
which is individually insignificant, an impairment test is carried out separately or in the financial asset group with similar credit risk.
Where the financial asset (individually significant or insignificant) is found not impaired after the separate impairment test, it is
included in the financial asset group with similar credit risk and tested again on the group basis. Where the impairment loss is
recognized for an individual financial asset, it is not included in the financial asset group with similar credit risk for an impairment
test.
10. Recognition criteria and withdrawal methods for bad debts provision of accounts receivable
The Group shall test the carrying amount of receivables on the balance sheet date. Where there is any objective evidence proving that
such receivables have been impaired, an impairment provision shall be made.
① Debtor has serious financial difficult;
② Debtor goes against the contract clause (for instance, breach of faith or overdue paying interests or principal);
③ Debtors has a great probability of bankruptcy or other financial reorganization;
④ Other objective evidence proving such accounts receivable has been impaired.
(1) Bad debt provision for individually significant accounts receivable
The Group recognized the receivables with amount above
Judgment basis or monetary standards of provision for bad debts of
RMB 5 million as receivables with significant single
the individually significant accounts receivable
amounts.
The Group made an independent impairment test on
receivables with significant single amount; the financial
assets without impairment by independent impairment test
Method of individual provision for bad debts of the individually should be included in financial assets portfolio with similar
significant accounts receivable credit risk to take the impairment test. Receivables was
recognized with impairment should no longer be included in
receivables portfolio with similar credit risk to take the
impairment test.
(2) Accounts receivable for which bad debt provisions are made on the group basis
Withdrawal method of bad
Name of group debt provision on the group Recognition basis of group
basis
Aging group Aging analysis method
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Withdrawal proportion for accounts Withdrawal proportion for other
Age
receivable (%) accounts receivable (%)
Within 1 year (including 1 year) 5% 5%
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1 to 2 years 10% 10%
2 to 3 years 20% 20%
Over 3 years 30% 30%
In the groups, adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision
□ Applicable √ Inapplicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made
individually
Accounts receivables exist dispute with the other parties or involving lawsuit and
Reason of individually withdrawing bad debt
arbitration; receivables exist obvious indication showing that the debtors are likely to
provision
fail to perform the duty of repayment, etc.
The Group made an independent impairment test on receivables with not significant
single amount which own the above characteristics; if any objective evidence shows
Withdrawal method for bad debt provision that the accounts receivable has been impaired, impairment loss shall be recognized
on the basis of the gap between the current values of the future cash flow lower than
its book value so as to withdraw provision for bad debts.
11. Inventory
(1) Classification
Inventories of the Company are classified as: raw materials, goods in process, processing materials on consignment and merchandise
inventory etc.
(2) Pricing method for outgoing inventories
Pricing method: √ Weighted average method
The inventories shall be measured in light of their cost when obtained. The cost of inventory consists of purchase costs, processing
costs and other costs. Inventory is accounted by weight average method upon receiving and giving. The difference between planned
cost of and actual cost of raw materials is accounted through the cost variance item, and the planned cost is adjusted to the actual cost
according to the cost difference which the carryover and given-out inventory should shoulder in the period.
(3) Recognition basis of net realizable value and withdrawal method of depreciation reserves for
inventories
The net realizable value refers, in the ordinary course of business, to the account after deducting the estimated cost of completion,
estimated sale expense and relevant taxes from the estimated sale price of inventories. The net realizable value of inventories shall be
fixed on the basis of valid evidence as well as under consideration of purpose of inventories and the effect of events after
balance-sheet-date.
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On the balance sheet date, the inventories shall be measured according to the cost or the net realizable value, whichever is lower. If
the net realizable value is lower than the cost, it shall withdraw the depreciation reserves for inventories, which was withdrawn in
accordance with the balance that the cost of individual inventory item exceeding the net realizable value.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any write-down of the inventories, have
disappeared, causing the net realizable value of inventories is higher than its carrying amount; the amount of write-down shall be
reversed from the original amount of depreciation reserve for inventories. The reversed amount shall be included in the profits and
losses of the current period.
(4) Inventory system for inventories:
Inventory system: √ Perpetual inventory system
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods
Amortization method: one-off amortization method
Packing articles
Amortization method: one-off amortization method
12. Long-term equity investment
(1) Recognition of initial investment cost
The initial cost of the long-term equity investment formed in business combination shall be ascertained in accordance with the
following provisions: For the business combination under the same control, it shall regard the share of the carrying amount of the
owner's equity of the combined party on the date of combination as the initial cost of the long-term equity investment. For the
business combination under different control, the combination costs shall be the sum of the fair values of the assets paid, the
liabilities incurred or assumed and the equity securities issued by the Company; the commission fees for audit, law services,
assessment & consultancy services and other relevant expenses occurred in the business combination by the combining party, shall
be recorded into current profits and losses upon their occurrence; the transaction expense from the issuance of equity securities or
bonds securities which are as consideration for combination by the combining party, should be recorded as the initial amount of
equity securities and bonds securities.
Besides the long-term equity investment formed by business combination, the other long-term equity investments shall be initially
measured by cost, the costs fixed in accordance with the ways of gaining, such as actual cash payment paid by the Group, the fair
value of equity securities issued by the Group, the agreed value of the investment contract or agreement, the fair value or original
carrying amount of exchanged assets from non-monetary assets exchange transaction, the fair value of the long-term equity
investments, etc. The expenses, taxes and other necessary expenditures directly related with gaining the long-term equity investments
shall also be recorded into investment cost.
(2) Follow-up measurement of long-term equity investment and recognized method of profits and losses
The long-term equity investment that the Company does not have joint control or significant influences on the invested entity, and
has no offer in the active market and its fair value cannot be reliably measured, it shall be measured by adopting the cost method; a
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
long-term equity investment that the Company has joint control or significant influences over the invested entity shall be measured
by employing the equity method; a long-term equity investment that the Company does not have control, joint control or significant
influence on the invested entity, as well as its fair value can be reliably measured, it shall be accounted as financial assets
available-for-sale.
Moreover, long-term equity investment adopting the cost method in the financial statements, and which the Company has control on
invested entity.
① L ong-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be included at its initial investment cost, the
return on investment at current period shall be recognized in accordance with the cash dividend or profit announced to distribute by
the invested entity, except the announced but not distributed cash dividend or profit included in the actual payment or consideration
upon gaining the investment.
②L ong-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's distributable share of the fair value of the invested
entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial
cost of a long-term equity investment is less than the Company's distributable share of the fair value of the invested entity's
identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the
long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, the investment profits or losses at current period shall be the distributable share of the
net profits or losses of the invested entity. The investing enterprise shall, on the ground of the fair value of all identifiable assets of
the invested entity when it obtains the investment, and in accordance with the accounting policies and accounting periods, recognize
the distributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. For the
profits and losses of unrealized insider dealing between the Group and joint-operative enterprise or co-operative enterprise, the
investment profits and losses shall be recognized after the part distributable to the Group calculated by proportion of shares held
being offset. However, if the losses of unrealized insider dealing between the Group and joint-operative enterprise or co-operative
enterprise was attributed to the impairment losses of the transferred assets in accordance with the Accounting Standards for
Enterprises No. 8— Asset Impairment, which shall not be offset. The other comprehensive profits from invested entity shall be
recognized as other comprehensive profits after adjusting the book value of long-term equity investment, and then recorded into
capital reserves
The Group shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other
long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero. However,
if the Group has the obligation to undertake extra losses, which shall be recognized as the estimated liabilities in accordance with the
estimated duties and then recorded into investment losses at current period. If the invested entity realizes any net profits later, the
Group shall, after the amount of its distributable share of profits offsets against its distributable share of the un-recognized losses,
resume recognizing its distributable share of profits.
For the long-term equity investment on joint-enterprise and co-operative enterprise held by the Group before the initial execution of
New Accounting Standards for Enterprise as 1 Jan. 2007, if there existed the balance of debtor for equity investment related with
such long-term equity investment, which shall be recorded into current profits and losses with the amount by straight-line
amortization in the remained period.
③ A cquiring shares of m inority interest
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In the preparation for the financial statements, the balance existed between the long-term equity investment increased by acquiring
shares of minority interest and the distributable net assets on the subsidiary calculated by the increased shares held since the purchase
date (or combination date), the capital reserves shall be adjusted, if the capital reserves are not sufficient to offset, the retained profits
shall be adjusted.
④ D isposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity investment on subsidiaries without
losing its controlling right on them, the balance between the disposed price and distributable net assets of subsidiaries by disposing
the long-term equity investment shall be recorded into owners’ equity; where the Company losses the controlling right by disposing
part of long-term equity investment on such subsidiaries, it shall treated in accordance with the relevant accounting policies in Note
IV. 4
(1) Method on preparation of combined financial statements. For other ways on disposal of long-term equity investment, the balance
between the book value of the disposed equity and its actual payment gained shall be recorded into current profits and losses; for the
long-term equity investment measured by adopting equity method, the other comprehensive income originally recorded into owners’
equity shall be transferred into current profits and losses by proportions upon the disposal. The remained equity shall be recognized
as long-term equity investment or other relevant financial assets in accordance with the book value, and carried out the follow-up
measurement in accordance with the above accounting policies for the long-term equity investment or financial assets. If the
measurement method of remained equity is transferred from cost method to equity method, it shall be subject to retrospective
adjustment in accordance with relevant rules and stipulations.
(3) Recognition basis of joint control and significant influences
The term "control" refers to the power to determine the financial and operating polices of an enterprise and obtain benefits from its
operating activities of the enterprise. The term "joint control" refers to the control over an economic activity in accordance with the
contracts and agreements, which does not exist unless the investing parties of the economic activity with one an assent on sharing the
control power over the relevant important financial and operating decisions. The term "significant influences" refers to the power to
participate in making decisions on the financial and operating policies of an enterprise, but not to control or do joint control together
with other parties over the formulation of these policies. When ascertaining whether or not it is able to control or have significant
influences on an invested entity, an enterprise shall take into consideration the invested enterprises' current convertible corporate
bonds and current executable warrants held by the investing enterprise and other parties, as well as other potential factors concerning
the voting rights.
(4) Testing method of impairment and withdrawal method of provision for impairment
The Group shall, on the day of balance sheet, make a judgment on whether there is any sign of possible impairment of the long-term
equity investment. Where there is sign of impairment, the Group shall estimate the recoverable amount of the long-term equity
investment. Where the recoverable amount of the long-term equity investment is lower than its book value, which balance shall be
withdrawn the provision for impairment and recorded into current profits and losses.
Once any loss of impairment of the long-term equity investment is recognized, it shall not be switched back in the future accounting
periods.
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13. Fixed assets
(1) Recognized standard of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they are held for the sake of
producing commodities, rendering labor service, renting or business management; and their useful life is in excess of one fiscal year.
(2) Recognition basis and pricing method of fixed assets by finance lease
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the ownership of an asset.
Its ownership may or may not eventually be transferred. The fixed assets by finance lease shall adopt the same depreciation policy for
self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease
term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will
obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over the shorter one
of the lease term or its useful life.
(3) Depreciation methods of fixed assets
The initial measurement of a fixed asset shall be made at its cost after considering the effect of expected discard expenses. The Group
shall withdraw the depreciation of fixed assets by adopting the straight-line method since the second month of its useful life. Useful
life, expected net salvage value (refers to the expected amount that the Group may obtain from the current disposal of a fixed asset
after deducting the expected disposal expenses at the expiration of its expected useful life) and annual depreciation rate of each fixed
assets are as below:
Category of fixed assets Useful life (Y) Expected net salvage value Annual deprecation
Housing and building 5-20 5-10 3.00-19.00
Machinery equipments 10-13 5-10 5.00-9.50
Electronic equipments and other 5 5-10 19.00-18.00
Transportation vehicle 5 5-10 19.00-18.00
(4) Testing method of impairment and withdrawal method of provision for impairment on fixed assets
Testing method of impairment and withdrawal method of provision for impairment on fixed assets please refer to the “Imp
airment Intangible assets” in the report.
(5) Other explanations
The follow-up expenses related to a fixed asset, if the economic benefits pertinent to this fixed asset are likely to flow into the
enterprise and its cost can be reliably measured, shall be recorded into cost of fixed assets and ultimately recognized as the book
value of the replaced part; otherwise, they shall be included in the current profits and losses.
When the Group sells, transfers or discards any fixed assets, or when any fixed assets of the Group is damaged or destroyed, the
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Group shall deduct the book value of the fixed assets as well as the relevant taxes from the disposal income, and include the amount
in the current profits and losses.
The Group shall check the useful life, expected net salvage value and depreciation method of the fixed assets at the end of the year at
least, if there is any change, it shall be regarded as a change of the accounting estimates.
14. Construction in process
(1) Categories of construction in process
Construction in process is measured at actual cost. Actual cost comprises construction costs, borrowing costs that are eligible for
capitalization before the fixed assets being ready for their intended us and other relevant costs.
(2) Standards and time of transferring construction in process into fixed asset
Construction in process is transferred to fixed assets when the assets are ready for their intended use.
(3) Impairment test method and withdrawal method for impairment provision of construction in process
Impairment test method and withdrawal method for impairment provision of construction in process please refer to the “Impairment
Intangible assets” in the report.
15. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses,
and exchange balance on foreign currency borrowings. Where the borrowing costs incurred to an enterprise can be directly
distributable to the acquisition and construction or production of assets eligible for capitalization, it shall start to be capitalized when
the asset disbursements have already incurred, the borrowing costs has already incurred and the acquisition and construction or
production activities which are necessary to prepare the asset for its intended use or sale have already started; When the qualified
asset under acquisition and construction or production is ready for the intended use or sale, it shall stop to be capitalized. Other
borrowing costs shall be recognized as costs upon their occurrence.
(2) Capitalization period of borrowing costs
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the borrowing costs,
excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the capitalization of
the borrowing costs shall be ceased.
When partial projects of a qualified asset under acquisition and construction or production are completed respectively and ready for
independent use, the capitalization of borrowing costs for such parts of asset shall be ceased.
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Where each part of a asset under acquisition and construction or production is completed separately and is ready for use or sale
during the continuing construction of other parts, but it can not be used or sold until the asset is entirely completed, the capitalization
of the borrowing costs shall be ceased when the asset is completed entirely.
(3) Period for ceasing capitalization of borrowing costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts
for more than 3 months, the capitalization of the borrowing costs shall be suspended until the acquisition and construction or
production of a qualified asset resume again
(4) Calculation method of capitalized amount of borrowing costs
The to-be-capitalized amount of interests shall be determined in light of the actual interests incurred of the specially borrowed loan at
the present period minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary
investment; the enterprise shall calculate and determine the to-be-capitalized amount on the general borrowing by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the
capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted
average interest rate of the general borrowing.
During the period of capitalization, the exchange balance on foreign currency special borrowings shall be capitalized; the exchange
balance on foreign currency general borrowings shall be recorded into current profits and losses.
The term “assets eligible for capitalization” refers to the fixed assets, investment real estate, inventories and other assets, of which the
acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
16. Intangible assets
(1) Pricing method of intangible assets
The term "intangible asset" refers to the identifiable non-monetary assets possessed or controlled by enterprises which have no
physical shape.
The intangible assets shall be initially measured according to its cost. The costs related with the intangible assets, if the economic
benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably,
shall be recorded into the costs of intangible assets; otherwise, it shall be recorded into current profits and losses upon the occurrence.
The use right of land gained is usually measured as intangible assets. For the self-developed and constructed factories and other
constructions, the related expenditures on use right of land and construction costs shall be respectively measured as intangible assets
and fixed assets. For the purchased houses and buildings, the related payment shall be distributed into the payment for use right of
land and the payment for buildings, if it is difficult to be distributed, the whole payment shall be treated as fixed assets.
(2) Estimated useful life of intangible assets with limited useful life
At the end of period, the Group shall check the service life and amortization method of intangible assets with finite service life, if
there is any change, it shall be regarded as a change of the accounting estimates. Besides, the Group shall check the service life of
intangible assets without certain service life, if there is any evidence showing that the period of intangible assets to bring the
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economic benefits to the enterprise can be prospected, it shall be estimated the service life and amortized in accordance with the
amortization policies for intangible assets with finite service life. After checking the service life and amortization method of
intangible assets with finite service life, the service life and amortization method of intangible assets at the period-end is same with
the previous estimation.
Item Estimated useful life Basis
Land use right 15 to 50 years Benefit period of land use right
Patent license 10 years Contract period
(3) Judgment basis of intangible assets with uncertain useful life
There are evidences showing that the service life of intangible assets on bringing economical benefits to the Company is predictable.
(4) Withdrawal of impairment provision of intangible assets
For the non-current non-financial assets, such as fixed assets, Construction in process, intangible assets with finite service life,
investment real assets measured by cost mode as well as long-term equity investment on subsidiaries, co-operative enterprise and
joint-operative enterprise, etc., are tested for impairment if there is any indication that an asset may be impaired at the balance date.
If there is any sign of possible assets impairment, the Group shall estimate the recoverable amount and made the impairment tests.
No matter whether there is any sign of possible assets impairment, the good will, intangible assets without certain service life,
intangible assets not ready for use shall be subject to impairment test every year.
If the result of the impairment test indicates that the recoverable amount of the asset is less than its book value, a provision for
impairment and an impairment loss are recognized for the amount by which the asset’s book value exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected
to be derived from the asset. The fair value of an asset shall be determined in light of the basis of the price as stipulated in the sales
agreement. Where there is no sales agreement but there is an active market of assets, the fair value of the asset shall be determined
according to the price bidden by the buyer of the asset; Where there is no sales agreement and no active market of assets, the fair
value of an asset shall be estimated in light of the best information available. The disposal expenses shall include the relevant legal
expenses, relevant taxes, trucking charge as well as the direct expenses for bringing the assets into a marketable state. The current
value of the expected future cash flow of an asset shall be determined by the discounted cash with an appropriate discount rate, on the
basis of the expected future cash flow generated during the continuous use or final disposal of an asset. A provision for asset
Impairment is determined and recognized on an individual asset basis. If it is not possible to estimate the recoverable amount of an
individual asset, the recoverable amount of the group of assets to which the asset belongs is determined. A group of assets is the
smallest group of assets that is able to generate independent cash inflows.
For the goodwill separately listed in the financial statements, during the impairment test, the book value of this goodwill is allocated
to the related asset group or groups of asset group which is expected to benefit from the synergies of the business combination. If the
result of the test indicates that the recoverable amount of an asset group or groups of asset group including the goodwill allocated is
lower than its book value, the corresponding impairment loss is recognized. The impairment loss is first deducted from the book
value of goodwill allocated to the asset group or groups of asset group, and then deducted from the book value of the remaining
assets of the asset group or groups of asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognized, it is not allowed to be reversed even if the value is recovered in the
subsequent periods.
(5) Criteria of separating the research phase and development phase of internal R&D project
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The Company’s expenditures for research and development are divided into expenditures in research phase and expenditures in
development phase in accordance with their natures and whether the intangible assets ultimately formed from such R&D activities
exist significant uncertainty or not.
(6) Calculation of the expenditures of internal R&D project
Expenditures for research and development shall be recorded into current profits and losses upon the occurrence.
The development expenditures for its internal research and development projects of an enterprise may be confirmed as intangible
assets when they satisfy the following conditions simultaneously, otherwise，it shall be recorded into current profits and losses.
① It is feasible technically to finish intangible assets for use or sale;
② It is intended to finish and use or sell the intangible assets;
③ The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove
that there is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the
intangible assets itself or the intangible assets will be used internally;
④ It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of
sufficient technologies, financial resources and other resources;
⑤ The development expenditures of the intangible assets can be reliably measured.
If the expenditures for research and expenditures for development can not be distinguished from each other, all the expenditures for
research and development shall be recorded into current profits and losses.
17. Long-term deferred expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year (one year excluded) that have
occurred but distributable to the current and future periods. Long-term deferred expense shall be amortized averagely within benefit
period.
18. Share-based payment and equity instruments
(1) Categories of share-based payment
The term "share-based payment" refers to a transaction in which the Company grants equity instruments or undertakes
equity-instrument-based liabilities in return for services from employee or other parties.
The share-based payments shall consist of equity-settled share-based payments and cash-settled share-based payments.
① Equity-settled share-based payments
The equity-settled share-based payment in return for employee services shall be measured at the fair value of the equity instruments
granted to the employees on the grant day. If the right of the amount of the fair value of the equity instruments cannot be exercised
until the vesting period comes to an end or until the prescribed performance conditions are met, then based on the best estimate of the
number of vested equity instruments, it shall be included in the relevant costs or expenses by straight-line method, and also increase
the capital reserves.
An equity-settled share-based payment in return for the service of any other party shall be conducted in accordance with the
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following circumstances, respectively: If the fair value of the service of any other party can be measured in a reliable way, it shall be
measured at the fair value of the service on the acquisition date by any other service party; If the fair value of the service of any other
party can not be measured in a reliable way, but the fair value of the equity instruments can be measured in a reliable way, the fair
value of the equity instruments on date of the service acquisition shall be included in the relevant costs or expenses, and the owner's
equities shall be increased accordingly.
② Cash-settled share-based payments
A cash-settled share-based payment shall be measured in accordance with the fair value of liability calculated and confirmed based
on the shares or other equity instruments undertaken by the Group. As to the cash-settled share-based payment, if the right may be
exercised immediately after the grant, it shall be included in the relevant costs or expenses on the date of the grant, and the liabilities
shall be increased accordingly; if the right may not be exercised until the vesting period comes to an end or until the specified
performance conditions are met, on each balance sheet date within the vesting period, the services obtained in the current period shall,
based on the best estimate of the information about the exercisable right, be included in the relevant costs or expenses and the
corresponding liabilities at the fair value of the liability undertaken by the Group.
The Group shall, on each balance sheet date and on each account date prior to the settlement of the relevant liabilities, re-measure the
fair values of the liabilities and include the changes in the current profits and losses.
(2) The measures for the recognition of the fair value of the equity instruments.
The fair value of the restricted shares granted by the Group is measured at the closing price of A-share on the day before the grant
day.
(3) Basis for the recognition of the best estimation of the vested equity instruments
On each balance sheet date within the vesting period, the best estimation shall be made in accordance with the newly gained
subsequent information on the change of vested number of staffs, and then revise the estimated number of vested equity instrument.
(4) Relevant accounting treatment on the implementation, revision and termination of share-based payment plan
As to the revision on the share-based payment plan made by the Group, if the fair value of the granted equity instrument increases
after the revision, it shall recognize the increase of the service gained according to the increase of the fair value of equity instrument.
The increase of the fair value of equity instrument refers to the balance between the fair value on the revising date of the equity
instruments before and after the revision. If the total fair value of share-base payment decreases after the revision or adopting other
ways against the staffs in the revision, it shall continue to conduct accounting treatment on the service gained as if the revision never
happens, only if the Group cancel partial or total granted equity instrument.
During the vesting period, if the Group cancels the granted equity instrument, the Group shall treat the cancel of granted equity
instrument as accelerating the vesting, and includes the amount shall be recognized during the remained vesting period into current
profit and loss, and also recognize the capital reserves. If staffs or other party can choose to meet the non-vesting conditions but not
meets with them during the vesting period, which will be treated as the cancel of granted equity instrument by the Group.
19. Repurchase of shares of the Company
In the repurchase of shares, the consideration paid and the transaction expenses which decreased the owners’ equity would
not be recognized as gains or losses when the Company repurchased transferred or logged off the shares.
Transfer the treasury stocks, should included in the capital reserves according to the actual received amount and the differ
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ences between the book amount of stock shares; if the capital surplus were not enough for writing down, the surplus rese
rves and the undistributed profits should be written down. When logging off treasury stocks, the Company should decrease
d the storks according to book value of the shares and cancellation of the shares number, and to write down the capital s
urplus according to the book balance of the canceled treasury stocks and its book value; if the capital surplus were not e
nough for writing down, the surplus reserves and the undistributed profits should be written down
20. Revenue
(1) Criteria for recognition time of revenue from selling goods
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and
rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous
management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of
revenue can be measured in a reliable way; the relevant economic benefits may flow into the enterprise; and the relevant costs
incurred or to be incurred can be measured in a reliable way.
(2) Recognition basis of royalty revenue
1) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenue on accrual basis.
2) Interest revenue
In accordance with the time that others use the Group’s monetary capital and the actual rate.
(3) Revenue from providing labor services
If an enterprise can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the
revenue from providing services employing the percentage-of-completion method on the balance sheet date. The
percentage-of-completion is determined by the proportion of the costs incurred against the estimated total costs.
The outcome of a transaction concerning the providing of labor services can be measured in a reliable way, means that the following
conditions shall be met simultaneously: ① The amount of revenue can be measured in a reliable way; ② The relevant economic
benefits are likely to flow into the enterprise; ③ The schedule of completion under the transaction can be confirmed in a reliable
way; ④ The costs incurred or to be incurred in the transaction can be measured in a reliable way.
If the Company can not measure the result of a transaction concerning the providing of labor services in a reliable way, it shall be
conducted in accordance with the following circumstances, respectively: If the cost of labor services incurred is expected to be
compensated, the compensation amount for the cost of labor services shall be recognized as the revenue from providing labor service,
and the cost of labor service incurred shall be as the current cost; if the cost of labor services incurred is not expected to compensate,
no revenue from the providing of labor services may be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods and providing of labor services, if
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the part of sale of goods and the part of providing labor services can be distinguished from each other and can be measured
respectively, the part of sale of goods and the part of providing labor services shall be treated respectively. If the part of selling goods
and the part of providing labor services can not be distinguished from each other, or if the part of sale of goods and the part of
providing labor services can be distinguished from each other but can not be measured respectively, both parts shall be conducted as
selling goods.
21. Government subsidies
(1) Types
A government subsidy means the monetary or non-monetary assets obtained free by the Group from the government, but excluding
the capital invested by the government as the owner of the enterprise. Government subsidies consist of the government subsidies
pertinent to assets and government subsidies pertinent to income.
(2) Accounting treatment method
If a government subsidy is a monetary asset, it shall be measured in the light of the received or receivable amount. If a government
subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair value cannot be obtained in a reliable way, it shall be
measured at its nominal amount. The government subsidies measured at their nominal amounts shall be directly included in the
current profits and losses.
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful lives of the
relevant assets, and included in the current profits and losses. The government subsidies pertinent to incomes shall be treated
respectively in accordance with the circumstances as follows: those subsidies used for compensating the related future expenses or
losses of the enterprise shall be recognized as deferred income and shall included in the current profits and losses during the period
when the relevant expenses are recognized; or those subsidies used for compensating the related expenses or losses incurred to the
enterprise shall be directly included in the current profits and losses.
Where it is necessary to refund any government subsidy which has been recognized, it shall be treated respectively in accordance
with the circumstances as follows: if there is the deferred income concerned, the book balance of the deferred income shall be offset
against, but the excessive part shall be included in the current profits and losses; or if there is no deferred income concerned to the
government subsidy, it shall be directly included in the current profits and losses.
The government capital investment is not government subsidies.
22. Deferred income tax assets and deferred income tax liabilities
(1) Recognition basis of deferred income tax assets
The balance between the book value of deferred tax assets and deferred tax liabilities and its taxable amount, as well as the temporary
difference between the book value of those unrecognized as assets and liabilities but with clear taxable amount and the taxable
amount should adopt law of liabilities for balance sheet to recognize deferred income tax assets and deferred income tax liabilities.
No deferred taxable assets should be recognized for the deductible temporary difference of initial recognition of assets and liabilities
arising from the transaction which is not business combination, the accounting profits will not be affected, nor will the taxable
amount or deductible loss be affected at the time of transaction. Besides, no deferred taxable assets should be recognized for the
deductible temporary difference related to the investments of the subsidiary companies, associated enterprises and joint enterprises,
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which are not likely to be reversed in the expected future or is not likely to acquire any amount of taxable income tax that may be
used for making up such deductible temporary differences. Otherwise, the Company shall recognize the deferred income tax assets
arising from a deductible temporary difference basing on the extent of the amount of the taxable income that is likely to be acquired
to make up such deductible temporary differences
For any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax asset
shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be
likely obtained.
On the balance sheet date, the deferred income assets and deferred income tax liabilities shall be measured at the tax rate applicable
to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtain sufficient taxable
income to offset against the benefit of the deferred income tax asset, the book value of the deferred income tax assets shall be written
down. Any such write-down should be subsequently reversed where it becomes probable that sufficient taxable income will be
available.
(2) Recognition basis of deferred income tax liabilities
The balance between the book value of deferred tax assets and deferred tax liabilities and its taxable amount, as well as the temporary
difference between the book value of those unrecognized as assets and liabilities but with clear taxable amount and the taxable
amount should adopt law of liabilities for balance sheet to recognize deferred income tax assets and deferred income tax liabilities.
No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill, the initial
recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor
taxable profit (or deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary differences related to the
investments of subsidiary companies, associated enterprises and joint enterprises, and the investing enterprise can control the time of
the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the excepted future.
Otherwise, the Group should recognize the deferred income tax liabilities arising form other taxable temporary difference.
23. Operating lease and financial lease
(1) Accounting treatments of operating lease
1) The Group records the operating lease as the leasee
The rental payment from operating leases shall be recorded by the lessee in the relevant asset costs or the profits and losses of the
current period by using the straight-line method over each period of the lease term. The initial direct costs incurred by a lessee shall
be recognized as the profits and losses of the current period. The contingent rents shall be recorded into the profits and losses of the
current period in which they actually arise.
2) The Group records the operating lease as the leasor
The rental income from operating leases shall be recorded by the lessee in the profits and losses of the current period by using the
straight-line method over each period of the lease term. The initial direct costs with large amount shall be capitalized upon the
occurrence, and recorded into current profits and losses by using the recognition basis for rental income method over each period of
the lease term; the initial direct costs with small amount shall be recorded into current profits and losses upon occurrence. The
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contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
(2) Accounting treatments of financial lease
1) The Group records the finance lease as the leasee
On the lease beginning date, a lessee shall record the lower one of the fair value of the leased asset and the present value of the
minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease
payments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of the
leased asset and the long-term account payable as unrecognized financing charges. Otherwise, the initial direct costs incurred during
the process of lease negotiating and signing the leasing agreement which can be included into the items of lease shall be recorded in
the asset value of the current period. The balance that the minimum lease payment minus the unrecognized financing charges should
be listed as long-term liabilities and long-term liabilities due within 1 year respectively.
The unrecognized financing charges should be recorded into current financing charges measured by adopting effective interest
method during the lease period. The contingent rents should be recorded into current profits and losses upon occurrence.
2) The Group records the finance lease as the leasor
On the beginning date of the lease term, a leasor shall recognize the sum of the minimum lease receipts on the lease beginning date
and the initial direct costs as the entering value in an account of the financing lease values receivable, and record the not guaranteed
residual value at the same time. The balance between the sums of the minimum lease receipts, the initial direct costs and the not
guaranteed residual value, and the sum of their present values shall be recognized as unrealized financing income. A leasor shall
present the balances between the financial lease income minus the unrecognized financing income as long-term creditor’s right and
long-term creditor’s right due within 1 year respectively.
The unrealized financing income should be recorded into current financing income measured by adopting effective interest method
during the lease period. The contingent rents should be recorded into current profits and losses upon occurrence.
24. Other main accounting policies and estimates as well as compilation method of financial statements
During the process of the use of accounting policies, the group needs to judge, estimate and suppose the book value of the report
items unable to be calculated exactly due to the internal uncertainty of the business activities. And these kinds of judgment, estimate
and supposal are based on the historical experience of the past management of the group combining with the other related factors.
These kinds of judgment, estimate and supposal will affect the reported amount of the income, cost, capital and debt as well as the
disclosure of the contingent liabilities in the balance sheet date. However, the result caused by the uncertainty of the estimate will
probably give rise to the significant adjustment of the book value of the asset or debt affected consequently. The group re-checks the
judgment, estimate and supposal mentioned above in regular intervals based on the going concern. The change estimated by the
accountant will merely have an impact on the period of the change and the influence number will be confirmed in the period of the
change; if the change influences no only the period of the change but future, the influence number will be conformed in the period of
the change and the future.
In the balance sheet date, the fields in which the group should judge, estimate and suppose the amount of money of the financial
report items as follows:
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(1) The Category of Lease
According to Accounting Standards for Business Enterprises No.21——lease the group divides the lease into operating lease and
financial lease. During the process of classifying the lease, the management layer should analyze and estimate whether all the risk
and remuneration related to the lease-out assets have been substantially transferred to the tenants or whether the group has
substantially undertaken all the risk and remuneration related to rental assets.
(2) Provision for Bad Debt
According to the accounting policies of receivables, the group calculates the bad debt losses through the allowance method.
Receivables impairment is based on the estimate of the return-ability of the receivables. The identification of the receivables
impairment requires the judgment and estimate of the management layer. The difference between the actual result and the former
estimate will affected the book value and the bad-debt provision or reversal of the receivables.
(3) Inventory Falling Price Reserves
According to the accounting policies of inventory, for the inventories which the cost is more than the net realizable value or the old
and unsalable inventory, the inventory falling price reserves shall be made. The decrease of the value of the inventories to the net
realizable value is based on the estimate of the salability and the net realizable value of the inventories. The identification of the
inventory impairment requires the management layer to judge and estimate based on the exact evidence, the consideration about the
purpose for holding the inventories and the effect of the matters after the balance sheet date and other factors. The difference between
the actual result and the former estimate will affected the book value and the inventory falling price provision or reversal.
(4) Financial Instruments Fair Value
For the financial instruments not existing in the active trading market, the group uses many kinds of valuation methods to confirm the
fair value. These kinds of methods include the Discounted Cash Flow Model of FCFE and others. During the period of the valuation
the group needs to estimate the future cash flow, credit risks, market volatility and the correlation and other aspects as well as choose
appropriate discount rate. The related supposals have uncertainty so that the change will influence the fair value of the financial
instatement.
(5) Non-financial and Non-current assets impairment provision
In addition to the financial assets the group judges whether there are any signs to show the possibility of the non-current assets
impairment. For the intangible assets with uncertain lifetime, in addition to the annual impairment tests, they will also be tested for
impairment when there are any impairment signs. The other non-current assets except financial assets will be tested for impairment
when there are any signs to prove that the book value can not be recovered.
When the book value of the assets or the asset group is more than the recoverable amount which means the higher of the net amount
of the fair value deducting the disposal expenses and the predicted future cash flow, which means the impairment, has happened.
The net amount of the fair value deducting the disposal expense is confirmed by deducting the incremental cost which can directly
belong to the asset disposal in the reference with the sales negotiated price of the similar assets and the observable market price in the
fair dealing.
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When the group predicts the present value of future cash flow it should make the significant judgment about the output of assets (or
asset group), selling price, related operating cost and discount rate when calculating the present value. When the group estimates the
recoverable amount it will use all the available related material including the prediction of the output, selling price and operating cost
according to the reasonable and supportable suppose.
The group tests whether there is any goodwill impairment at least annually. The test requires the group to estimate the present value
of future cash flow of the asset group or the combination of asset groups has been distributed the goodwill to. When the group
estimates the present value of future cash flow it should estimate the cash flow caused by the future assets group or the combination
of asset groups and choose the proper discount rate to confirm the present value of future cash flow.
(6) Depreciation and Amortization
After the consideration about the scrap value by the group the investment property, fixed assets and intangible assets can be said to
require depreciation and amortization in their lifetime through the method of line. The group will re-check the lifetime at regular
intervals in order to deciding the amount which will be included into the cost of depreciation and amortization. The identification of
lifetime is decided based on the historic experience of the similar assets combining with the expectant technology update. If the
previous estimate has a great change, the cost of depreciation and amortization will be adjusted in the future period.
(7) Development Expenditure
When the group confirms the sum of the capitalization the management should make the supposal of the anticipated future cash flow,
the proper discount rate and supposal in the anticipated period of benefit.
(8) Deferred Income Tax Assets
In the limitation that there is enough taxable profit to deduct the loss in all probability, the group confirms the deferred income tax
assets based on all the dormant tax losses. It requires the management layer of the group to estimate the sum and the time of
occurrence of the future taxable profit through a lot of judgment combining with the tax planning strategy and confirm the sum of
deferred income tax assets.
(9) Income Tax
There exists some uncertainty in the final tax treatment and calculation of the part of trade in the normal business activities of the
group. The permission of the pre-tax deduction of Part of projects should be examined and approved by the tax authorities. If the
final result of these tax transactions is different from the sum of the initial estimate, the difference will influence the current income
tax and the deferred income tax in the final confirmation period.
V. Taxation
1. Main taxes and tax rate
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Category of taxes Tax basis Tax rate
Calculated the output tax at 17%, 13% of taxable income
VAT and paid the VAT by the amount after deducting the 17%, 13%
deductible withholding VAT at current period.
Business tax Paid by 3%, 5% of taxable business income 3%, 5%
Urban maintenance and construction tax Paid at 7%, 5%, 1% of the circulating tax actually paid 7%, 5%, 1%
Enterprise income tax Paid at 15%, 16.5%, 25% of taxable income respectively 15%, 16.5%, 25%
The income tax rates adopted by each subsidiary and branch factory
2．Tax preference and official documents
The Company, in accordance with the Notice on Passing the Re-examination of New High-tech Enterprise for 504 Companies
Including Jinan Shengquan Group Co., Ltd. (Lu-Ke-Gao-Zi [2012] No. 19) from Department of Science & Technology of Shandong
Province, Finance Bureau of Shandong Province, National Taxation Bureau of Shandong and Local Taxation Bureau of Shandong
Province, was recognized as a New High-tech Enterprise and obtained the Certificate of New High-tech Enterprise on 31 Oct. 2011.
The Company shall, in line with the Article 28 of Enterprise Income Tax Law of the People’s Republic of China and Notice of the
State Administration of Taxation on the Issues concerning the Administration of Enterprise Income Tax Deduction and Exemption
(GSF [2008] No. 111 document), enjoy a 15-percent rate for enterprise income tax.
The Company’s shares controlling subsidiary— Lufeng Weaving & Dyeing Co., Ltd., in accordance with the Notice on Confirmation
of New High-tech Enterprise for 430 Companies Including Jinan Feshen Xing’an Technologies Co., Ltd. (Lu-Ke-Gao-Zi [2012] No.
38) from Department of Science & Technology of Shandong Province, Finance Bureau of Shandong Province, National Taxation
Bureau of Shandong and Local Taxation Bureau of Shandong Province, was recognized as a New High-tech Enterprise and obtained
the Certificate of New High-tech Enterprise on 30 Nov. 2011.. The above subsidiary shall, in line with the Article 28 of Enterprise
Income Tax Law of the People’s Republic of China and Notice of the State Administration of Taxation on the Issues concerning the
Administration of Enterprise Income Tax Deduction and Exemption (GSF [2008] No. 111 document), enjoy a 15-percent rate for
enterprise income tax.
Luthai (Hong Kong) Co., Ltd. (hereinafter refers as Luthai (Hong Kong)), the wholly-owned subsidiary company of the Company,
was incorporated in Hong Kong SAR, whose profit tax shall be paid at tax rate of 16.5%.
VI. Business combination and consolidated financial statement
1. Subsidiaries
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(1) Subsidiaries obtained by establishment and investment
Unit: RMB yuan
The The Includ
Balance of parent company’s
Actual amount proporti proporti ed in Minori
Other Deductible equity after deducting the
Register Business Registered of investments on of on of consol ty
Subsidiaries Type Business scope essential minority difference that loss of minority
ed place nature capital at the holding voting idated interes
investment interests interests exceed equity obtained
period-end shares rights statem t
by minority shareholders
（%） （%） ent
Beijing Lufeng Wholesale of
Wholly-
Sunshine Garment clothing and
owned Wholesale
Co., Ltd. RMB commodity;
subsidiar Beijing and retail 15,000,000.00 100% 100% Yes
(hereinafter refer to 15,000,000.00 costume designing;
y industry
as “Lufeng service of
Sunshine”) technology diffusion
Design and
Beijing Innovative
manufacturing of
Garment Co., Ltd. Holding Wholesale
RMB clothing, adornment, -360,0
(hereinafter refer to subsidiar Beijing and retail 25,200,000.00 60% 60% Yes
42,000,000.00 fabric and 27.66
as “Beijing y industry
trimmings; sale of
Innovative”)
self-made products
Import & export
Wholly-
Wholesale trade, collection of
owned Hong HKD
Luthai (Hong Kong) and retail market information, 6,366,600.00 100% 100% Yes
subsidiar Kong 6,000,000.00
industry information
y
consultation
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Shanghai Luthai Design, technology
Wholly-
Textile Co., Ltd. Wholesale R&D of textile
owned Shangha RMB
(hereinafter refer to and retail and garment; 5,000,000.00 100% 100% Yes
subsidiar i 5,000,000.00
as “Shanghai industry wholesale of textile
y
Luthai”) and garment
Purchase,
processing and sale
of cotton and
cotton-by products;
production and sales
of conventional seed
Xinjiang Luthai
Holding of crops; foreign
Harvest Cotton Co., 147,24
subsidiar Manufactu RMB trade, production 117,342,316.9
Ltd. (hereinafter Xinjiang 59.92% 59.92% Yes 3,713.
y ring 200,725,100.00 and sale of cotton 5
refer to as “Xinjiang 68
textile products;
Luthai”)
processing and sale
of edible vegetable
oil; wholesale and
retail of agricultural
materials; crops
planting
Production and sale
Lufeng Weaving & of textile and
Holding
Dyeing Co., Ltd. printing and dyeing 252,49
subsidiar Manufactu RMB 529,620,000.0
(hereinafter refer to Zibo products; wholesale 75% 75% Yes 1,182.
y ring 706,160,000.00 0
as “Lufeng Weaving and retail of yarn, 93
& Dyeing”) clothing and
adornment
Zibo Luqun Textile Wholly- Zibo Manufactu RMB Production and sale 171,784,550.0 100% 100% Yes
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Co., Ltd. owned ring 168,220,000.00 of cotton polyester 0
(hereinafter refer to subsidiar yarn, weaving,
as “Luqun Textile”) y clothing, adornment
and textile
Zibo Xinsheng Ltd. Zibo Ltd.
Power supply,
Power Co. (hereinaf Xinshen (hereinafte
power generation,
ter refer g Power r refer to
RMB production and sale 176,340,737.9
to as Co. as 100% 100% Yes
162,435,600.00 of hollow brick and 3
“Xinshe “Xinsheng
cement block for
ng Power”)
architecture
Power”)
Wholly-
owned
Xinjiang Luthai
subsidi
Textile Co., Ltd. Production and sales
ary of Manufactu RMB
(hereinafter refer to Xinjiang of cotton yarn and 50,000,000.00 100% 100% Yes
the ring 50,000,000.00
as “Xinjiang Luthai cotton textiles
holding
Textile”)
subsidi
ary
Development,
Wholly- promotion and sales
owned of energy saving
Zibo Helijie Energy
subsidiar technology
Saving Technology
y of the Service RMB products;
Services Co., Ltd. Zibo 10,000,000.00 100% 100% Yes
wholly-o 10,000,000.00 consolation of
(hereinafter refer to
wned energy
as “Helijie”)
subsidiar administration;
y administration
service of contract
88
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
energy;
development and
sales of hardware
and software of
computers
Other notes to subsidiaries obtained by establishment and investment
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2. Exchange rates of major items in financial statements for foreign entities
Item Items of assets and liabilities
30 Jun. 2013 1 Jan. 2013
Luthai (Hong Kong) HK $1 = RMB 0.7966 yuan HK $1 = RMB 0.8108 yuan
Item Items of income, expense and cash flow
Jan. to Jun. in 2013 Jan. to Jun. in 2012
Luthai (Hong Kong) HK $1 = RMB 0.8040 yuan HK $1 = RMB 0.8132 yuan
(VII) Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB yuan
Closing balance Opening balance
Item Amount in Exchange Amount in Exchange
Amount in RMB Amount in RMB
foreign currency rate foreign currency rate
Cash: -- -- 1,093,602.21 -- -- 1,028,103.46
RMB -- -- 931,451.91 -- -- 692,340.56
USD 11,838.11 6.1787 73,144.14 32,876.17 6.2855 206,643.17
EUR 3,773.27 8.0536 30,388.40 6,885.11 8.3176 57,267.59
JPY 19,638.00 0.0626 1,229.35 170,638.00 0.0730 12,456.58
HKD 27,884.44 0.7966 22,212.75 11,900.44 0.8108 9,648.88
THP 120.19 0.1970 23.68 120.19 0.2038 24.49
SGD 91.90 4.8470 445.44 91.90 5.0929 468.04
GBP 809.36 9.4213 7,625.22 1,794.36 10.1611 18,232.67
AUD 4,746.03 5.7061 27,081.32 4,746.03 6.5363 31,021.48
Bank deposit: -- -- 502,202,714.44 -- -- 834,150,725.17
RMB -- -- 176,282,733.81 -- -- 355,809,242.61
USD 41,288,755.57 6.1787 255,110,834.05 72,267,474.21 6.2855 454,237,209.23
EUR 6,698.16 8.0536 53,944.30 253,254.10 8.3176 2,106,466.30
JPY 5,456,631.00 0.0626 341,585.10 105,628,850.00 0.0730 7,710,906.06
HKD 88,392,224.33 0.7966 70,413,245.90 17,594,286.46 0.8108 14,266,310.16
CHF 57.09 6.5034 371.28 3,018.34 6.8219 20,590.81
Other monetary funds: -- -- 148,784,733.34 -- -- 84,555,817.50
RMB -- -- 11,330,975.93 -- -- 64,552,430.41
USD 7,624,602.04 6.1787 47,110,128.63 3,182,422.46 6.2855 20,003,116.36
EUR 18.01 8.0536 145.04 32.54 8.3176 270.66
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JPY 1.00 0.0626 0.06 1.00 0.0730 0.07
HKD 113,411,352.85 0.7966 90,343,483.68
Total -- -- 652,081,049.99 -- -- 919,734,646.13
Special explanation shall be made for the accounts limited by being mortgaged, pledged or frozen, deposited overseas or with
potential collecting risks:
① Other monetary funds were mainly the Company’s short-term borrowing deposit, which amounted into RMB 119,864,278.65. The
fixed time deposit due in 3 months of the Company is RMB 10,000,000.00.
② As of 30 Jun. 2013, the monetary funds the Group deposited in overseas amounted into RMB 16,630,908.82 (RMB 13,990,324.82
on 31 Dec. 2012), all of which was monetary fund deposit of wholly-owned subsidy Luthai (Hong Kong).
2. Trading financial assets
(1) Trading financial assets
Unit: RMB yuan
Item Closing fair value Opening fair value
Derivative financial assets 16,670,160.00 18,388,641.00
Total 16,670,160.00 18,388,641.00
3. Notes receivable
(1) Category of notes receivable
Unit: RMB yuan
Category Closing balance Opening balance
Bank acceptance bill 9,043,286.40 44,022,124.09
Letter of credit 107,936,057.60 114,717,752.92
Total 116,979,344.00 158,739,877.01
(2) List of notes receivable transferred to accounts receivable which owning to the weak performa
nce of the drawer, and the notes which the Company endorsed to the other party at the perio
d-end but not expire yet.
Notes receivable which transferred to accounts receivable owning to the weak performance of the drawer
Unit: RMB yuan
Drawer units Date of issuance Due day Amount Note
Notes:
Notes which the Company endorsed to the other party at the period-end but not expire yet.
Unit: RMB yuan
Drawer units Date of issuance Due day Amount Note
Shaoxing Jinzhongxin Textile Co.,
28 Mar. 2013 28 Sept. 2013 2,800,000.00 Yes
Ltd.
Shaoxing Quanxin Textile Clothing 29 May. 2013 29 Nov. 2013 2,000,000.00 Yes
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Co., Ltd.
Shaoxing Quanxin Textile Clothing
25 Apr. 2013 25 Oct. 2013 1,672,100.00 Yes
Co., Ltd.
Ningbo Luomeng Economy And
27 May. 2013 27 Nov. 2013 1,581,290.58 Yes
Trade Co., Ltd.
Ningbo Luomeng Economy And
16 May. 2013 15 Nov. 2013 1,500,000.00 Yes
Trade Co., Ltd.
Total -- -- 9,553,390.58 --
Notes:
Notes of discounted or pledged trade acceptance
4. Accounts receivable
(1) Accounts receivable listed by categories
Unit: RMB yuan
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category
Proportio Proportio Proporti Proportio
Amount Amount Amount Amount
n (%) n (%) on (%) n (%)
Accounts receivable for which bad debt provisions are made on the group basis
Aging group 192,276,360.79 99.32% 9,693,161.58 5.04% 240,213,311.45 99.46% 12,079,691.99 5.03%
Subtotal of the groups 192,276,360.79 99.32% 9,693,161.58 5.04% 240,213,311.45 99.46% 12,079,691.99 5.03%
Accounts receivable
with insignificant single
amount and individually 1,313,784.00 0.68% 1,313,784.00 100% 1,313,784.00 0.54% 1,313,784.00 100%
withdrawn bad debt
provision
Total 193,590,144.79 -- 11,006,945.58 -- 241,527,095.45 -- 13,393,475.99 --
Notes to category of accounts receivable:
Accounts receivable with significant single amount and individually withdrawn bad debt provision
□Applicable √Inapplicable
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB yuan
Closing balance Opening balance
Aging Book balance Provision for bad Book balance Provision for bad
Amount Proportion debts Amount Proportion debts
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 191,558,631.72 99.62% 9,577,931.58 239,629,464.20 99.75% 11,981,473.21
Subtotal of within
191,558,631.72 99.62% 9,577,931.58 239,629,464.20 99.75% 11,981,473.21
1 year
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
1 to 2 years 427,948.72 0.22% 42,794.86 330,297.42 0.14% 33,029.74
2 to 3 years 144,989.58 0.08% 28,997.91 108,759.06 0.05% 21,751.81
Over 3 years 144,790.77 0.08% 43,437.23 144,790.77 0.06% 43,437.23
Total 192,276,360.79 -- 9,693,161.58 240,213,311.45 -- 12,079,691.99
Account receivable in the consolidation with provision for bad debt by balance percentage method:
□ Applicable √Inapplicable
Account receivable in the consolidation with provision for bad debt by other method:
□ Applicable √Inapplicable
Account receivable with small individual amount and provision for bad debt at the end of period
√Applicable □Inapplicable
Unit: RMB yuan
Provision for Withdrawal
Content of accounts receivable Book value Reason for withdrawal
bad debts proportion
It was receivables of subsidiary Xinsheng Power
aging over 3 three years. As Xinsheng Power is in
Zichuan Liaozhai Hotel Co.,
1,168,548.00 1,168,548.00 100% bad operation and barely meet the payment that the
Ltd.
Company made provision in full amount of its due
account.
It was receivables of subsidiary Xinsheng Power
aging over 3 three years. As Xinsheng Power is in
Zibo Huayang Blanket Co., Ltd. 145,236.00 145,236.00 100% bad operation and barely meet the payment that the
Company made provision in full amount of its due
account.
Total 1,313,784.00 1,313,784.00 -- --
(2) Information of top 5 accounts receivable:
Unit: RMB yuan
The relationship
Name of entity Amount Aging Proportion
with the Company
Non-related
TAL 24,408,588.34 Within 1 year 12.6%
customer
Non-related
PVH 18,018,350.83 Within 1 year 9.31%
customer
Non-related
OXFORD 17,926,388.21 Within 1 year 9.26%
customer
Central Heating Office of Zichuan Non-related
15,301,161.73 Within 1 year 7.9%
District, Zibo customer
Non-related
SEIDENSTICKER 10,909,013.20 Within 1 year 5.64%
customer
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Total -- 86,563,502.31 -- 44.71%
5. Other accounts receivable
(1) Other accounts receivable disclosed by type
Unit: RMB yuan
Closing balance Opening balance
Provision for doubtful Provision for doubtful
Balance Balance
Category debts debts
Proporti Proportio Proportio Proportio
Amount Amount Amount Amount
on (%) n (%) n (%) n (%)
Other accounts receivable that provisions for bad debts by group
Aging group 61,421,853.97 100% 8,557,457.24 13.93% 72,144,965.24 100% 9,093,077.75 12.6%
Subtotal of groups 61,421,853.97 100% 8,557,457.24 13.93% 72,144,965.24 100% 9,093,077.75 12.6%
Total 61,421,853.97 -- 8,557,457.24 -- 72,144,965.24 -- 9,093,077.75 --
Notes for categories of other accounts receivable:
Other closing accounts receivable that is individually significant and provisions for bad debts individually.
□Applicable√ Inapplicable
In the group, other accounts receivable that provision for bad debts by aging analysis:
√ Applicable □ Inapplicable
Unit: RMB yuan
Period-end Period-begin
Book balance Book balance
Aging Provision for bad Provision for bad
Proporti debts Proporti debts
Amount Amount
on on
Within 1 year
Including:
Within 1 year 33,352,250.64 54.3% 1,667,612.53 43,462,035.28 60.24% 2,173,101.76
Subtotal of within 1 year 33,352,250.64 54.3% 1,667,612.53 43,462,035.28 60.24% 2,173,101.76
1-2 years 6,939,786.03 11.3% 693,978.60 6,716,178.21 9.31% 671,617.82
2-3 years 1,430,790.83 2.33% 286,158.17 3,416,673.52 4.74% 683,334.70
Over 3 years 19,699,026.47 32.07% 5,909,707.94 18,550,078.23 25.71% 5,565,023.47
Total 61,421,853.97 -- 8,557,457.24 72,144,965.24 -- 9,093,077.75
In the group, other accounts receivable that provision for bad debts by balance percentage:
□Applicable√ Inapplicable
In the group, other accounts receivable that provision for bad debts by other methods:
□Applicable√ Inapplicable
Other closing individually insignificant but provision for bad debts individually accounts receivable:
□Applicable√ Inapplicable
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(2) Nature or details of other significant accounts receivable
Unit: RMB yuan
Name of entity Amount Nature or details of the amount Proportion of the total (%)
Paid the advanced funds for t
he government of the strippi
Tianhong State-owned property
10,474,300.00 ng assets operating funds of 17.05%
Investment Operation Co., Ltd.
Xinjiang Luthai Co., Ltd.
Total 10,474,300.00 -- 17.05%
Notes:
(3) Information of top five other accounts receivable
Unit: RMB yuan
Relationship with Proportion of the total
Name of entity Amount Aging
the Company (%)
Tianhong State Own Assets Within 1 year, 2 to 3 years, over 3
Non-related 10,474,300.00 17.05%
Investment and Business Co., Ltd. years
Insurance fees of farmland Non-related 2,999,324.00 Within 1 year 4.88%
Wage margin of laborer of Zichuan
Non-related 2,955,620.10 1 to 2 years, over 3 years 4.81%
District of Zibo Municipal
Advanced accounts receivable of
Non-related 2,945,843.06 Within 1 year 4.8%
contract accounts of contract land
Export rebates receivable Non-related 2,871,405.80 Within 1 year 4.68%
Total -- 22,246,492.96 -- 36.22%
6. Prepayment
(1) List by aging analysis
Unit: RMB yuan
Closing balance Opening balance
Aging Proportion Proportion
Amount Amount
(%) (%)
Within 1 year 145,386,904.02 97.78% 92,196,849.31 95.83%
1 to 2 years 1,877,244.92 1.26% 3,533,474.45 3.67%
2 to 3 years 964,121.97 0.65% 22,236.99 0.02%
Over 3 years 462,936.77 0.31% 462,103.88 0.48%
Total 148,691,207.68 -- 96,214,664.63 --
Notes of aging of prepayment:
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
(2) Information of the top 5 prepayment
Unit: RMB yuan
Relationship with the Reason for
Name of entity Amount Aging
Company unsettled
Advance material
Jam Smith Company Non-related-party supplier 49,666,325.58 Jun. 2013
payment
Zibo Power Supply Company of Shandong Advance material
Non-related-party supplier 14,515,282.24 Jun. 2013
Electricity Power Corporation payment
Changzhou Tonghe Textile Machinery Advance material
Non-related-party supplier 8,000,000.00 Jun. 2013
Manufacturing Co., Ltd. payment
Stanluian Advance material
Non-related-party supplier 6,374,387.18 May. to Jun. 2013
Machinery (Shanghai) Co., Ltd. payment
Advance
GLENCORE GRAIN B.V. Non-related-party supplier 6,058,967.42 Jun. 2013 processing
charges
Total -- 84,614,962.42 -- --
Notes of important companies of prepayment:
7. Inventory
(1) Category
Unit: RMB yuan
Closing balance Opening balance
Item Impairment of Impairment of
Book balance Book value Book balance Book value
inventories inventories
Raw materials 676,558,947.80 1,635,229.99 674,923,717.81 602,297,536.50 1,635,229.99 600,662,306.51
Construction
425,902,354.33 425,902,354.33 437,387,961.50 437,387,961.50
contract assets
Inventory goods 684,271,922.31 34,922,596.57 649,349,325.74 667,292,187.64 44,239,970.91 623,052,216.73
Assigned processing
24,656,325.59 24,656,325.59 23,189,842.53 23,189,842.53
products
Total 1,811,389,550.03 36,557,826.56 1,774,831,723.47 1,730,167,528.17 45,875,200.90 1,684,292,327.27
(2) Impairment of inventories
Unit: RMB yuan
Decrease
Category Opening balance Withdrawal amount Closing balance
Reversal Written off
Raw materials 1,635,229.99 1,635,229.99
Inventory goods 44,239,970.91 9,317,374.34 34,922,596.57
Total 45,875,200.90 9,317,374.34 36,557,826.56
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
(3) List of impairment of inventories
Item Basic Reason Proportion (%)
The lower one between cost and
Raw materials
net realizable value
The lower one between cost and
Inventory goods
net realizable value
Notes:
Stocks balance for debt guarantee at the period-end is RMB 154,724,889.38, and the short-term loan gained from the
bank is RMB 193,000,000.00.
8. Other current assets
Unit: RMB yuan
Item Closing balance Opening balance
B share re-purchase amounts 35,410,586.78
Advance payment of income tax to be ded
6,809,425.26 11,688,929.65
uctible
The VAT input tax to be deductible 32,676,030.60 20,968,868.75
Total 39,485,455.86 68,068,385.18
Notes of other current assets:
9. Long-term equity investment
(1) List of long-term equity investment
Unit: RMB yuan
With
draw
n
Explanation for impa
Cash
indifferences irme
Share bonus
Incr between the Impair nt
Accoun Initial holding Voting in the
Opening ease/ Closing share holding ment prov
Investee ting investment percenta percentage report
balance decr balance percentage and provisi ision
method cost ge in in investee ing
ease voting on in
investee perio
percentage in the
d
investee repo
rting
peri
od
Zibo
Chengshun
Cost
Power Co., 160,000.00 160,000.00 160,000.00 2% 2%
method
Ltd.
(hereinafter
97
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
refer to as
“Chengshun
Power” )
Yantai
Rongchang
Pharmacy
Co., Ltd. Cost
55,282,600.00 55,282,600.00 55,282,600.00 5.56% 5.56%
(hereinafter method
refer to as
“Rongchang
Pharmacy”)
Gaoqing
Hongqiao
Power Co., Cost
12,000,000.00 12,000,000.00 12,000,000.00 20.68% 20.68%
Ltd. method
(Hongqiao
Power)
Total -- 67,442,600.00 67,442,600.00 67,442,600.00 -- -- --
10. Fixed assets
(1) Fixed assets details
Unit: RMB yuan
Opening book Decrease in the Closing book
Item Increase in the reporting period
balance reporting period balance
I. Total original book value 6,986,279,110.42 106,503,341.38 26,552,751.53 7,066,229,700.27
Including: Property and
1,995,267,970.64 68,267,441.10 2,063,535,411.74 2,063,535,411.74
building
Machineries 4,836,271,099.61 34,009,436.32 25,633,324.05 4,844,647,211.88
Vehicles 66,043,074.52 1,093,501.57 129,924.00 67,006,652.09
Electronic equipments and
88,696,965.65 3,132,962.39 789,503.48 91,040,424.56
other
Closing book
Opening book Increase in the Withdrawal in the Decrease in the
-- balance in the
balance reporting period reporting period reporting period
reporting period
II. Accumulated
2,762,220,053.07 129,192,163.01 23,095,298.15 2,868,316,917.93
depreciation
Including: Property and
532,379,558.58 29,863,109.91 562,242,668.49
building
Machineries 2,133,750,268.69 92,303,338.93 22,292,518.96 2,203,761,088.66
Vehicles 42,755,742.77 2,917,120.86 116,931.60 45,555,932.03
Electronic equipments and
53,334,483.03 4,108,593.31 685,847.59 56,757,228.75
other
Closing book
Opening book
-- -- balance in the
balance
reporting period
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
III. The net book value of
4,224,059,057.35 -- 4,197,912,782.34
fixed assets
Including: Property and
1,462,888,412.06 -- 1,501,292,743.25
building
Machineries 2,702,520,830.92 -- 2,640,886,123.22
Vehicles 23,287,331.75 -- 21,450,720.06
Other equipment 35,362,482.62 -- 34,283,195.81
IV. Total impairment
37,764,759.06 -- 35,978,720.96
provision
Including: Property and
7,177,718.64 -- 7,177,718.64
building
Machineries 30,445,952.98 -- 28,659,914.88
Vehicles 61,235.72 -- 61,235.72
Electronic equipments and
79,851.72 -- 79,851.72
other
V. Total book value of fixed
4,186,294,298.29 -- 4,161,934,061.38
assets
Including: Property and
1,455,710,693.42 -- 1,494,115,024.61
building
Machineries 2,672,074,877.94 -- 2,612,226,208.34
Vehicles 23,226,096.03 -- 21,389,484.34
Electronic equipments and
35,282,630.90 -- 34,203,344.09
other
Depreciation amount of this reporting period was RMB 129,192,163.01; original value of RMB 82,735,029.75 was transferred into
fixed assets from construction project.
(4) Fixed assets leased out from operation lease
Unit: RMB yuan
Category Closing book value
Property and building 958,819.47
(3) Information of fixed assets failed to accomplish certification of property
Item Reason Estimated accomplish date
Ongoing inspection, surveying, verification to application procedures
Luqun Spinning workshop Dec. 2013
by Housing authorities
Comprehensive building 3rd Ongoing inspection, surveying, verification to application procedures
Dec. 2013
factory of spinning by Housing authorities
Weaving and dyeing Ongoing inspection, surveying, verification to application procedures
Dec. 2013
workshop by Housing authorities
Main factory building of 6# Ongoing inspection, surveying, verification to application procedures
Dec. 2013
boiler of Xinsheng Power by Housing authorities
Notes of fixed assets
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
11. Construction in progress
(1) List of construction in progress
Unit: RMB yuan
Closing balance Opening balance
Impair Impair
Item ment ment
Book balance Book value Book balance Book value
provisi provisi
on on
Luthai West building, staff dormitory 54,318,852.50 54,318,852.50 33,659,027.18 33,659,027.18
Increasing production line project of 0.23
10,735,456.41 10,735,456.41 2,781,420.05 2,781,420.05
million spindle and 35,000 twister
Production line project of 40 million-meter
25,325,691.68 25,325,691.68 17,557,051.15 17,557,051.15
high-grade yarn-dyed
Eastern finished fabric warehouses 304,358.79 304,358.79 2,612,122.47 2,612,122.47
Exhibition Floor 376,933.04 376,933.04 8,111,134.47 8,111,134.47
Remolding of inter-vehicle inspection
9,753,200.07 9,753,200.07 9,137,851.73 9,137,851.73
workshop of arrange A factory
50 million-meter high-grade yarn-dyed
61,079,178.96 61,079,178.96 44,367,984.78 44,367,984.78
fabric project
Spinning project of Xinjiang Luthai 13,969,676.72 13,969,676.72 11,955,662.58 11,955,662.58
Office district project of Xinjiang Luthai 1,054,709.73 1,054,709.73 2,542,456.61 2,542,456.61
Xinjiang Luthai worker dormitory building
42,570,977.27 42,570,977.27 34,930,688.12 34,930,688.12
project
Shanghai Luthai office building project 0.00 0.00 3,632,142.00 3,632,142.00
Xinsheng power renovation project 15,872,071.98 15,872,071.98 13,587,627.65 13,587,627.65
Other small projects 33,611,664.06 33,611,664.06 57,561,579.63 57,561,579.63
Total 268,972,771.21 268,972,771.21 242,436,748.42 242,436,748.42
(2) Changes in significant construction in progress
Unit: RMB yuan
Includin
Capita
Othe Project Capita g:
lizatio Sour
input Project lizatio capitaliz
Name of Opening Transferred to r n of ce of Closing
Budget Increase percen proces n of ation of
project balance fixed assets decr tage of interes fund balance
s interes interest
t rate ing
ease budget t this
(%)
period
Lufeng We
659,930,000.00 44,367,984.78 29,430,456.76 12,719,262.58 78% 78% Othe 61,079,178.96
aving & D
100
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
yeing r
50
million-mete
r high-grade
yarn-dyed
fabric
project
Increasing
production
line project
of 0.23 Othe
928,660,000.00 2,781,420.05 7,954,036.36 0.00 1.16% 1.16% 10,735,456.41
million r
spindle and
35,000
twister
Total 1,588,590,000.00 47,149,404.83 37,384,493.12 12,719,262.58 -- -- -- -- 71,814,635.37
Notes of changes in construction in progress:
(3) Information of procedures of significant construction in progress
Project
Item Note
process
Lufeng Weaving & Dyeing
The process of the project is measured on basis of proportion of the actual cost
50 million-meter high-grade yarn-dyed fabric 78%
occurred to total contract projected cost
project
Increasing production line project of 0.23 The process of the project is measured on basis of proportion of the actual cost
1.16%
million spindle and 35,000 twister occurred to total contract projected cost
12. Engineering materials
Unit: RMB yuan
Increase in the Decrease in the
Item Opening balance Closing balance
reporting period reporting period
Specific materials 1,037,636.00 190,750.00 273,924.00 954,462.00
Specific equipments 11,019,938.11 41,205,275.99 20,449,157.26 31,776,056.84
Total 12,057,574.11 41,396,025.99 20,723,081.26 32,730,518.84
Notes of engineering materials
13. Clearance of fixed assets
Unit: RMB yuan
Reason for transferring to
Item Opening book value Closing book value
clearance
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Notes of clearance process of fixed assets with a clearance term of over 1 year since the transfer into fixed assets:
14. Intangible assets
(1) Information
Unit: RMB yuan
Increase in the reporting Decrease in the
Item Opening balance Closing balance
period reporting period
I. Total original book value 370,084,842.11 484,300.00 370,569,142.11
Land use right 262,640,698.56 484,300.00 263,124,998.56
Land use right of Xinsheng
12,155,433.14 12,155,433.14
Power
Lufeng Weaving &
53,490,972.94 53,490,972.94
Dyeing-land use right
Luqun Textile-land use right 39,632,561.00 39,632,561.00
Franchise of patent 1,985,176.47 1,985,176.47
Software use right 180,000.00 180,000.00
II. Accumulative
51,071,349.58 5,221,482.37 56,292,831.95
amortization
Land use right 39,488,666.45 3,908,652.82 43,397,319.27
Land use right of Xinsheng
3,437,936.26 253,671.66 3,691,607.92
Power
Lufeng Weaving &
3,184,204.76 541,552.95 3,725,757.71
Dyeing-land use right
Luqun Textile-land use right 4,350,420.47 418,346.10 4,768,766.57
Franchise of patent 430,121.64 99,258.84 529,380.48
Software use right 180,000.00 180,000.00
III. Total net book value of
319,013,492.53 -4,737,182.37 0.00 314,276,310.16
intangible assets
Land use right 223,152,032.11 -3,424,352.82 0.00 219,727,679.29
Land use right of Xinsheng
8,717,496.88 -253,671.66 0.00 8,463,825.22
Power
Lufeng Weaving &
50,306,768.18 -541,552.95 0.00 49,765,215.23
Dyeing-land use right
Luqun Textile-land use right 35,282,140.53 -418,346.10 0.00 34,863,794.43
Franchise of patent 1,555,054.83 -99,258.84 0.00 1,455,795.99
Software use right
Land use right
Land use right of Xinsheng
Power
Lufeng Weaving &
Dyeing-land use right
Luqun Textile-land use right
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Franchise of patent
Software use right
Total book value of
319,013,492.53 -4,737,182.37 314,276,310.16
intangible assets
Land use right 223,152,032.11 -3,424,352.82 219,727,679.29
Land use right of Xinsheng
8,717,496.88 -253,671.66 8,463,825.22
Power
Lufeng Weaving &
50,306,768.18 -541,552.95 49,765,215.23
Dyeing-land use right
Luqun Textile-land use right 35,282,140.53 -418,346.10 34,863,794.43
Franchise of patent 1,555,054.83 -99,258.84 1,455,795.99
Software use right
Amortization was of RMB 5,221,482.37 in the reporting period.
15. Goodwill
Unit: RMB yuan
Impairment
Name of investee or event that Increase in the Decrease in the
Opening balance Closing balance provision at
generated goodwill reporting period reporting period
period-end
Xinsheng Power 20,563,803.29 20,563,803.29
Helijie 50,000.00 50,000.00
Total 20,613,803.29 20,613,803.29
Notes of test method of goodwill impairment and impairment withdrawal method:
Test method of goodwill impairment and impairment withdrawal method please refer to “Intangible assets impairment”.
16. Long-term amortization expense
Unit: RMB yuan
Amortization Reason for other
Item Opening balance Increase Other decrease Closing balance
balance decrease
Xinjiang Luthai land
1,806,377.50 47,536.25 1,758,841.25
contact fee
Total 1,806,377.50 47,536.25 1,758,841.25 --
Notes of long-term amortization expense:
17. Deferred tax assets and liabilities
(1) Deferred tax assets and liabilities are not listed as the net value after offset
Deferred tax assets and liabilities that already recognize
Unit: RMB yuan
103
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Item Closing balance Opening balance
Deferred income tax assets:
Provision for assets impairment 14,878,104.03 16,976,279.74
Deductible losses 798,864.40 798,864.40
One-time listed decoration expenses 2,444,978.46 2,444,978.46
Offset unrealized internal profit 8,525,848.49 8,115,176.73
Payroll payable 21,127,049.79 21,127,049.79
Deferred income 9,535,534.01 9,637,102.90
Subtotal 57,310,379.18 59,099,452.02
Deferred income tax liabilities:
Estimated value of trading financial instruments,
2,500,524.00 2,758,296.16
derivative financial instruments
Depreciation of fixed assets 2,084,865.51 2,122,160.67
Subtotal 4,585,389.51 4,880,456.83
List of unrecognized deferred income tax assets
Unit: RMB yuan
Item Closing balance Opening balance
Deductible temporary 3,757,181.89 3,537,112.36
Deductible losses 42,913,777.06 31,869,029.25
Total 46,670,958.95 35,406,141.61
Deductible losses of unrecognized deferred income tax assets will due in the following years
Unit: RMB yuan
Year Closing balance Opening balance Remark
2016 10,558,689.66 10,558,689.66
2017 21,310,339.59 21,310,339.59
2018 11,044,747.81
Total 42,913,777.06 31,869,029.25 --
List of taxable differences and deductible differences items
Unit: RMB yuan
Temporary differences amount
Item
As at period-end As at period-begin
Taxable differences items
Provision for assets impairment 88,343,768.45 102,589,401.34
One-time listed decoration expenses 16,299,856.42 16,299,856.42
Offset unrealized internal profit 56,838,989.95 54,101,178.24
Payroll payable 130,632,424.53 130,632,424.53
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Deferred income 63,570,226.73 64,247,352.65
Deductible different item 4,625,206.38 4,625,206.38
Subtotal 360,310,472.46 372,495,419.56
Deductible different items
Depreciation of fixed assets 12,635,548.48 12,861,579.82
Fair value change on trading financial assets 16,670,160.00 18,388,641.00
Subtotal 29,305,708.48 31,250,220.82
(2) Deferred income tax assets and liabilities are listed as the net value after offset
Composition items of the deferred income tax assets and liabilities after offset
Unit: RMB yuan
Deferred deductible or t Deferred deductible or
Deferred income tax
Deferred income tax assets axable temporary differe taxable temporary differ
assets and liabilities at
Item and liabilities at the end of nces at the end of the ences at the opening of
the opening of the
the period period the period
period
Deferred income tax a
57,310,379.18 360,310,472.46 59,099,452.02 372,495,419.56
ssets
Deferred income tax li
4,585,389.51 29,305,708.48 4,880,456.83 31,250,220.82
abilities
Notes of differed income tax assets and liabilities after offset:
Unit: RMB yuan
Item Amount
Notes of differed income tax assets and liabilities:
18. List of provision for assets impairment
Unit: RMB yuan
Increase in this Decrease in this period
Item Opening balance Closing balance
period Reversal Written off
I. Provision for bad debt 22,486,553.74 2,922,150.92 19,564,402.82
II. Provision for inventory
45,875,200.90 9,317,374.34 36,557,826.56
falling price
III. Impairment provision of
37,764,759.06 1,786,038.10 35,978,720.96
fixed assets
Total 106,126,513.70 2,922,150.92 11,103,412.44 92,100,950.34
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Notes of provision for assets impairment
19. Other non-current assets
Unit: RMB yuan
Item Closing balance Opening balance
Advance payment for land 43,401,290.00 7,890,690.00
Total 43,401,290.00 7,890,690.00
Notes of other non-current assets
20. Short-term loan
(1) Category
Unit: RMB yuan
Category Closing balance Opening balance
Pledge loan 119,864,278.65 115,700,000.00
Mortgage loan 259,900,000.00 300,000,000.00
Guarantee loan 655,744,475.64 999,378,463.05
Total 1,035,508,754.29 1,415,078,463.05
Notes of short-term loan:
21. Notes payable
Unit: RMB yuan
Category Closing balance Opening balance
Trade acceptance bill 11,791,680.02 9,512,094.30
Total 11,791,680.02 9,512,094.30
RMB 11,791,680.02 will be due in next fiscal period.
Notes of notes payable:
22. Accounts payable
(1)
Unit: RMB yuan
Item Closing balance Opening balance
Within 1 year 285,071,673.50 315,414,084.45
1 to 2 years 9,569,327.64 3,947,206.36
2 to 3 years 1,418,841.71 2,014,595.70
Over 3 years 7,154,726.59 6,119,741.05
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Total 303,214,569.44 327,495,627.56
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares of the
Company
Unit: RMB yuan
Name of entity Closing amount Opening amount
Lucheng Textile 136,159.00 136,159.00
Total 136,159.00 136,159.00
23. Advance from customers
(1)
Unit: RMB yuan
Item Closing amount Opening amount
Within 1 year 94,047,803.31 113,970,732.04
1 to 2 years 1,353,952.20 1,280,263.87
2 to 3 years 133,951.85 52,720.55
Over 3 years 211,383.86 241,279.11
Total 95,747,091.22 115,544,995.57
24. Payroll payable
Unit: RMB yuan
Item Opening book balance Increase Decrease Closing book balance
I. Salary, bonus, allowance, subsidy 323,735,743.61 483,721,529.34 551,701,594.70 255,755,678.25
II. Employee welfare 23,801,320.49 23,801,320.49
III. Social insurance 2,248,742.54 101,197,850.32 85,402,387.50 18,044,205.36
Including: 1. Medical insurance
313,768.51 24,907,981.58 20,765,300.61 4,456,449.48
premiums
2. Basic pension benefits 1,472,725.94 68,930,834.43 57,727,568.91 12,675,991.46
3. Unemployment
347,239.82 3,778,688.24 3,387,451.94 738,476.12
insurance
4. Work-related injury
55,989.77 2,083,661.41 2,061,123.34 78,527.84
insurance
5. Maternity insurance 59,018.50 1,496,684.66 1,460,942.70 94,760.46
IV. Housing fund 23,143.44 8,407,665.61 7,721,741.04 709,068.01
V. Other 21,607,022.95 13,722,237.68 9,822,330.81 25,506,929.82
Including: Labor union budget and
21,607,022.95 10,271,721.92 6,371,815.05 25,506,929.82
employee education budget
Non-monetary benefits 3,450,515.76 3,450,515.76
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Total 347,614,652.54 630,850,603.44 678,449,374.54 300,015,881.44
RMB 0.00 is the amounts in arrears in the payroll payable.
The labor union budget and employee education budget is RMB 25,506,929.82, and the non-monetary benefits are RMB 0.00, as
well as the compensation for terminating the labor contract is RMB 0.00.
Arrangements of the estimate release time and amount of the payroll payable
Estimate release time Amount
2013 187,245,016.54
2014 68,510,661.71
Total 255,755,678.25
25. Taxes payable
Unit: RMB yuan
Item Closing balance Opening balance
Value-added tax 3,951,134.23 3,237,299.89
Business tax 353,610.39 630,477.37
Corporate income tax 19,073,402.42 11,138,117.27
Personal income tax 8,930,295.68 3,019,326.84
Urban maintenance and construction tax 23,324,276.68 13,076,642.51
Stamp tax 274,237.90 348,211.32
Property tax 3,702,746.45 4,964,587.44
Land use tax 2,653,750.53 3,220,347.27
Education surtax 10,017,316.86 5,607,408.51
Local education surtax 7,081,725.08 3,753,018.53
Local water conservancy facility construction fund 2,926,539.90 1,878,450.24
Total 82,289,036.12 50,873,887.19
Notes of taxes payable: for the taxable income of branch companies and factories approved to be inter-adjusted by their local tax
authorities, the Company shall specified their calculation procedure.
26. Interest payable
Unit: RMB yuan
Item Closing balance Opening balance
Interest payable on short-term borrowings 2,108,528.82 2,670,262.59
Total 2,108,528.82 2,670,262.59
Notes of interest payable:
27. Dividends payable
Unit: RMB yuan
108
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Name of company Closing balance Opening balance Reason for unsettlement over 1 year
Individual shareholders’ dividends paid Individual shareholders didn’t withdraw
441,966.54 441,966.54
by the Group cash dividends on previous years
Individual shareholders’ dividends-Share Individual shareholders didn’t withdraw
54,824.00
B paid by the Group cash dividends in 2012
Total 496,790.54 441,966.54 --
Notes:
28. Other accounts payable
(1)
Unit: RMB yuan
Item Closing balance Opening balance
Within 1 year 133,342,560.87 80,383,995.60
1 to 2 years 7,903,659.08 20,070,508.16
2 to 3 years 11,414,043.32 5,785,959.10
Over 3 years 26,836,043.01 29,559,732.84
Total 179,496,306.28 135,800,195.70
(2) Other accounts payable from shareholders with more than 5% (including 5%) of the voting shares of
the Company
Unit: RMB yuan
Name of entity Closing balance Opening balance
Lucheng Textile 69,900,000.00 43,900,000.00
Total 69,900,000.00 43,900,000.00
(3) Notes of the other large amount accounts payable aging over 1 year
Name of creditor Amount Reason for unsettlement Whether pay after the
Balance Sheet Date or
not?
Cotton and Jute Company 11,925,000.00 Received earnest money No
for Sale Contract
Deposit for trees planting 9,104,082.50 Deposit received No
Workshop disbursements of 63 thousand cotton 6,226,771.81 Disbursements No
spinning of the factory owner
Total 27,255,854.31
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
(4) Notes of other accounts payable with significant amount
Name of creditor Closing balance
Lucheng Textile 69,900,000.00 Borrowed accounts
Cotton and Jute Company 11,925,000.00 Received earnest money for
Sale Contract
Deposit for trees planting 9,104,082.50 Deposit received
Workshop disbursements of 63 thousand cotton 6,226,771.81 Disbursements
spinning of the factory owner
Total 27,255,854.31
29. Non-current liabilities due within 1 year
(1)
Unit: RMB yuan
Item Closing balance Opening balance
Long-term loan due within 1 year 61,787,000.00 12,851,550.00
Total 61,787,000.00 12,851,550.00
(2) Long-term loan due within 1 year
Long-term loan due within 1 year
Unit: RMB yuan
Item Closing balance Opening balance
Credit loan 61,787,000.00 12,851,550.00
Total 61,787,000.00 12,851,550.00
RMB000 of long-term loan due within 1 year was of mature loan with extended term.
Top five long-term loans due within 1 year
Unit: RMB yuan
Closing balance Opening balance
Curren Foreign Foreign
Creditor Starting date Ending date Rate (%)
cy currency RMB balance currency RMB balance
balance balance
China
Construction
Bank
5 Mar. 2007 5 Mar. 2013 EUR 1.86% 1,000,000.00 8,317,600.00
Corporation
Zibo Zichuan
Sub branch
China
Construction 26 Mar. 2007 25 Mar. 2013 USD 1.37% 450,000.00 2,828,475.00
Bank
110
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Corporation
Zibo Zichuan
Sub branch
China
Construction
Bank
29 Mar. 2007 29 Mar. 2013 EUR 2.54% 250,000.00 1,705,475.00
Corporation
Zibo Zichuan
Sub branch
Bank of East
Asia (China)
19 Mar. 2013 18 Apr. 2014 USD 2.27% 10,000,000.00 61,787,000.00
Co., Ltd. Beijing
Branch
Total -- -- -- -- -- 61,787,000.00 -- 12,851,550.00
Mature loan of long-term loan due within 1 year:
Unit: RMB yuan
Reason for Estimated settle
Creditor Amount of loan Overdue date Annual rate (%) Usage
unsettlement date
RMB000 was paid back after Balance Sheet Date:
Notes of long-term borrowings due within 1 year:
30. Long-term loan
(1) Category of long-term loan
Unit: RMB yuan
Item Closing balance Opening balance
Credit loan 61,787,000.00 12,851,550.00
Less: long-term loan due within 1 year (ann
-61,787,000.00 -12,851,550.00
otations VII, 29)
Notes:
31. Long-term payable
(1) The top five long-term payable
Unit: RMB yuan
Conditions of
Company Term Initial amount Rate (%) Accrued interest Closing balance
loan
Electric power
9,735,560.00 9,735,560.00 Credit
bonds payable
111
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
32. Other non-current liabilities
Unit: RMB yuan
Item Closing book balance Opening book balance
Deferred income 63,570,226.73 64,247,352.65
Other 1,840,000.00 1,840,000.00
Total 65,410,226.73 66,087,352.65
Notes of other non-current liabilities, including each government grants relevant to assets and income received in the reporting period
and their closing amounts:
Of which, list of the differed incomes as follows:
Item Closing book balance Opening book balance
Government subsidy related to the assets 63,570,226.73 64,247,352.65
Including : Land subsidy 63,570,226.73 64,247,352.65
Total 63,570,226.73 64,247,352.65
33. Share capital
Unit: RMB yuan
Increase/Decrease (+/-)
Capitalization
Opening balance Issuing new Closing balance
Bonus shares of public Other Subtotal
shares
reserves
Total shares 1,008,894,800.00 -4,257,000.00 -4,257,000.00 1,004,637,800.00
Notes of changes in share capital, for those action of increasing capital or decreasing capital in the reporting period, the Company
shall disclose the name of the accounting firm executing the capital verification and document number of the capital verification
report; for joint-stock companies running for less than three years, only the net assets shall be specified for particulars before
establishment; while for case of totally changing the limited liability companies into joint-stock companies, capital verification on the
establishment shall be specified:
The equity decreased 4,257,000.00 shares. According to the About the Repurchase Cancellation of the Motion Does Not Comply wit
h the Incentive Target Excitation Conditions of Restricted Stock Have Been Granted but Not Yet Unlocked and the About the Repurc
hase Cancellation of the Motion of Restricted Stock Have Not Yet been Unlocked in Second Unlock Period of 26th meeting of the si
xth board of directors held on27 Mar. 2013 the company repurchase canceled 4,257,000.00 shares which did not comply with the inc
entive target excitation conditions and haven been granted but not yet unlocked. The decrease in equity had been examined by RSM
China CPA (Special General Partnership) and on
28 May. 2013 the company issued the capital verification report RSM Yan Zi [2013] No. 0165.
34. Treasury stock
Notes of treasury stock:
112
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Item Opening amount Increase Decrease Closing amount
Shares of the Company 272,794,496.52 20,207,865.00 20,207,865.00 272,794,496.52
purchased owning to the
registered capital decreased
Total 272,794,496.52 20,207,865.00 20,207,865.00 272,794,496.52
Notes: The 26th meeting of the sixth board of directors held on27 Mar. 2013 to consider About the Repurchase Cancellation of the M
otion Does Not Comply with the Incentive Target Excitation Conditions of Restricted Stock Have Been Granted but Not Yet Unlocke
d and the About the Repurchase Cancellation of the Motion of Restricted Stock Have Not Yet been Unlocked in Second Unlock Perio
d repurchase canceled 4,257,000.00 shares which did not comply with the incentive target excitation conditions and haven been grant
ed but not yet unlocked and counted the shares as treasury share according to the repurchased money.
35. Capital reserves
Unit: RMB yuan
Item Opening amount Increase Decrease Closing amount
Capital premium (share
1,160,050,168.91 15,950,865.00 1,144,099,303.91
capital premium)
Other capital reserves 67,791,302.51 4,833,210.94 72,624,513.45
Other comprehensive income 2,350,000.00 2,350,000.00
Total 1,230,191,471.42 4,833,210.94 15,950,865.00 1,219,073,817.36
Notes of capital reserves:
①The investor’s invested capital amount decreased of RMB 15,950,865.00 in the reporting period, which is due to the
re-purchasing and log off of the awarded limited shares of the original incentive targets that did not meet with the incentive
standard, with the amount of 4,257,000.00 shares.
②The increase of RMB 4,833,210.94 on other capital reserves was mainly because RMB 4,801,767.48 was recognized on fair
value of share-based instruments that settled by equity method.
36. Surplus reserves
Unit: RMB yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 575,932,797.68 575,932,797.68
Discretional surplus reserves 3,341,572.58 3,341,572.58
Total 579,274,370.26 579,274,370.26
Notes of surplus reserves: for surplus reserves transferred to share capital, compensating losses and distributed as dividends, relevant
resolutions shall be explained:
The Group withdrew 10% of net profit of the statutory surplus reserves according to the Companies Act and its articles of
association.
37. Retained profits
Unit: RMB yuan
113
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Withdrawal or distributed
Item Amount
proportion
Opening balance of retained profits before
2,729,178,150.40 --
adjustments
Opening balance of retained profits after
2,729,178,150.40 --
adjustments
Add: Net profit distributable to owners of the
416,175,890.38 --
Company
Dividend of common stock payable 267,624,138.88
Closing retained profits 2,877,729,901.90 --
List of adjustment of opening retained profits:
1) RMB0.00 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for
Business Enterprises and relevant new regulations.
2) RMB0.00 opening retained profits was affected by changes on accounting policies.
3) RMB0.00 opening retained profits was affected by correction of significant accounting errors.
4) RMB0.00 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB0.00 opening retained profits was affected totally by other adjustments.
Notes: as for IPO companies, if the accumulated profits were enjoyed by new and original shareholders according to the resolutions
made at the shareholders’ general meeting before public offering, the Company shall explain clearly; if the accumulated profits were
distributed before public offering and enjoyed by the original shareholders according to the resolutions made at the shareholders’
general meeting, the Company shall clearly disclose the audited profits of dividends payable enjoyed by the original shareholders.
38. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Unit: RMB yuan
Item Reporting period Same period of last year
Sales of main business 2,976,710,964.24 2,724,452,576.74
Other operating income 83,784,290.93 83,572,988.02
Cost of sales 2,184,574,937.90 2,055,106,728.52
(2) Main business (Classified by industry)
Unit: RMB yuan
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
Textile and apparel 2,616,382,415.59 1,820,282,658.11 2,502,951,569.95 1,803,668,572.18
Cotton 222,917,964.19 196,699,415.84 54,482,474.92 44,457,699.53
Electricity and gas 102,696,182.88 85,247,430.26 94,492,825.45 88,624,820.99
114
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Other 34,714,401.58 28,892,231.74 72,525,706.42 67,142,781.86
Total 2,976,710,964.24 2,131,121,735.95 2,724,452,576.74 2,003,893,874.56
(3) Main business (Classified by product)
Unit: RMB yuan
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
Fabric products 2,034,521,635.12 1,427,276,223.26 1,865,722,025.87 1,375,834,973.23
Skirts 581,860,780.47 393,006,434.85 637,229,544.08 427,833,598.95
Cotton 222,917,964.19 196,699,415.84 54,482,474.92 44,457,699.53
Electricity, gas 102,696,182.88 85,247,430.26 94,492,825.45 88,624,820.99
Other 34,714,401.58 28,892,231.74 72,525,706.42 67,142,781.86
Total 2,976,710,964.24 2,131,121,735.95 2,724,452,576.74 2,003,893,874.56
(4) Main business (Classified by area)
Unit: RMB yuan
Reporting period Same period of last year
Area
Revenue of sales Costs of sales Revenue of sales Costs of sales
HK 224,302,228.93 157,348,013.59 285,635,416.39 210,627,556.05
Japan and South Korea 229,106,611.11 157,602,520.53 252,372,289.46 176,888,732.22
Southeast Asia 756,460,493.16 530,619,265.08 596,972,072.78 440,207,206.47
Europe and America 472,572,057.53 322,753,717.65 547,688,476.30 379,679,573.56
Other 348,347,623.44 243,824,599.27 302,652,040.67 221,737,508.39
Domestic sales 945,921,950.07 718,973,619.83 739,132,281.14 574,753,297.87
Total 2,976,710,964.24 2,131,121,735.95 2,724,452,576.74 2,003,893,874.56
(5) The revenue of sales from the top five customers
Unit: RMB yuan
Customer Main business revenue Proportion of total business revenue (%)
Customer A 226,532,852.81 7.4%
Customer B 209,316,111.53 6.84%
Customer C 158,321,583.06 5.17%
Customer D 139,140,545.94 4.55%
Customer E 126,606,144.07 4.14%
Total 859,917,237.41 28.1%
Notes of revenue of sales
115
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
39. Business tax and surtax
Unit: RMB yuan
Same period of
Item Reporting period Calculation and payment standard
last year
Business tax 542,993.23 3%-5% of actual business tax
Urban maintenance and construction
16,639,250.33 1,161,154.79 7%, 5%, 1% of actual taxed turnover tax
tax
Education surtax 7,315,311.26 640,488.41 3% of actual taxed turnover tax
Local education surtax 4,873,761.88 395,249.19 2% of actual taxed turnover tax
Local water conservancy construction
2,364,331.12 164,042.54 1% of actual taxed turnover tax
fund
Total 31,735,647.82 2,360,934.93 --
Notes:
40. Selling expenses
Unit: RMB yuan
Item Reporting period Same period of last year
Traffic expenses 15,953,266.62 14,470,087.74
Wages 22,813,166.45 19,110,079.21
Cost of stores 11,651,026.60 12,730,760.29
Advertisement fees 1,991,766.54 4,834,242.43
Port surcharge 3,561,927.93 3,404,402.39
Copyright payment 1,170,135.27 1,260,357.38
Office marketing expenses 886,365.07
Rental expenses 1,827,036.45 1,340,184.25
CIF 1,102,879.93 2,249,102.05
Patent fees 1,603,574.50 1,704,121.64
Other 20,137,059.86 15,170,588.64
Total 81,811,840.15 77,160,291.09
41. Administration expenses
Unit: RMB yuan
Item Reporting period Same period of last year
R&D expenses 115,069,711.84 134,443,313.63
Wages 52,398,919.79 33,198,646.91
116
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Depreciation expenses 11,438,349.42 13,675,265.82
Taxes 14,195,779.04 12,151,962.03
Share-based payment fees 4,801,767.48 31,344,966.24
Warehouse funds 8,792,074.55 6,661,582.86
Repair expenses 2,230,827.22 303,255.79
Amortization of intangible assets 4,382,491.06 4,337,877.39
Labor union expenditures 5,523,182.75 5,181,560.20
Insurance expenses 3,301,928.88 4,390,298.66
Traffic expenses 3,376,939.23 3,818,330.01
Other 35,310,358.13 31,896,712.04
Total 260,822,329.39 281,403,771.58
42. Financial expenses
Unit: RMB yuan
Item Reporting period Same period of last year
Interest expenses 22,196,732.55 33,444,498.22
Interest costs -1,916,200.18 -2,769,714.80
Exchange gains and losses -102,155.03 2,054,424.96
Other 4,158,562.94 4,008,622.57
Total 24,336,940.28 36,737,830.95
43. Gains and losses from changes in fair value
Unit: RMB yuan
Source Reporting period Same period of last year
Trading financial assets -1,718,481.00 -20,939,380.00
Including: gains from the changes in fair value of
-1,718,481.00 -20,939,380.00
derivative financial instruments
Trading financial liabilities -10,107,650.00
Total -1,718,481.00 -31,047,030.00
Notes:
44. Investment income
(1) List of investment income
Unit: RMB yuan
117
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Item Reporting period Same period of last year
Investment income arising from disposal of
-549,000.00
long-term equity investments
Investment income received from disposal of
17,649,677.42 19,601,638.49
trading financial assets
Total 17,649,677.42 19,052,638.49
45. Impairment losses
Unit: RMB yuan
Item Reporting period Same period of last year
I. Bad debts losses -2,922,150.92 3,155,937.27
Total -2,922,150.92 3,155,937.27
46. Non-operating gains
(1)
Unit: RMB yuan
The amount included in the
Item Reporting period Same period of last year current non-recurring gains
and losses
Total gains from disposal of non-current
2,363,171.75 459,008.99 2,363,171.75
assets
Including：Gains from disposal of fixed
2,363,171.75 459,008.99 2,363,171.75
assets
Government grants 12,871,925.92 16,550,426.92 12,871,925.92
Other 2,834,657.53 3,143,506.16 2,834,657.53
Total 18,069,755.20 20,152,942.07 18,069,755.20
(2) List of government grants
Unit: RMB yuan
Reporting Same period of
Item Note
period last year
Notice on the 2013 Plan to Issue the Technical Transformation
Special Fund for Autonomous Regions by the Financial
Technical Transformation
1,500,000.00 Department and the Economic and Information Commission of
special fund
The Xinjiang Uygur Autonomous Region
(Xin–Jin-Gui-Hua[2013] No.191)
Subsidies for Moving 5,216,300.00 Notice on Printing and Distributing Management Method on
118
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Xinjiang Cotton Subsidy for Moving the Storehouse of Xinjiang Cotton out of
Storehouses out of Xinjiang by Finance department (Cai-Jian[2011]No.1157)
Xinjiang
Agriculture
Notice on the Appropriation of the Specific Financial Fund for
Industrialization
200,000.00 Autonomous Regions to Support the Agriculture Industrialization
Development Specific
Development in 2013 by The Xinjiang Uygur Autonomous
Fund
Notice on Issuing Financial Subsidy on Loans of Supporting the
Poor Project of 2012 by Aksu Prefecture Bureau of Finance and
Financial Subsidies 62,500.00
the Poverty Relief and Development Office of Aksu Prefecture
(A-Di-Cai-Fu [2013] No.5)
Subsidies For the
Implementation Agreement of the Farmland Waste Mulch
Farmland Waste Mulch
1,730,000.00 Comprehensive Control Project of Awat County by Awat County
Comprehensive Control
Agriculture Bureau
Project
The Measures of Zibo City to Reward the Science and Technology
Science And Technology
50,000.00 by Zibo People’s Government (Zibo People’s Government Notice
Award
No. 87)
Notice on the Acceptance of the Application for Patent Grant in
Patent Grant 86,000.00 the Second Half of 2011 by Administration Committee of Zibo
High-tech Industrial Development Zone
Provincial Governor Notice on Allotting Subsidy for Government Quality Reward of
100,000.00 Shandong Province by Work Leading Group of “Quality Help to
Quality Award Thriving Shandong Province” Lu-Zhi-Qiang-Ban-Zi [2013] No.1
Decision on Zibo City Science and Technology Award of Zibo
Science and Technology
100,000.00 City People’s Government by Zibo City People’s Government
Award
(Zi-Zheng-Fa [2012] No.34)
Notice on Issuing the Central Financial Subsidies for the
Supervision System of the Public Building Energy Efficiency by
Subsidies for Building
80,000.00 the Department of Energy Conversation and Science and
Energy Efficiency
Technology of Shandong Urban and Rural Housing Construction
Department
Notice on Issuing the Specific Subsidies for Indemnificatory
Subsidies for Public
2,750,000.00 Comfortable Housing Project by Zibo City Finance Bureau
Rental Housing
（Ai-Ai-Fei-Shui-Zhi [2012] No.11）
Bulletin on the Commendation of the Enterprises As Well As the
Energy Conversation
300,000.00 Achievement Wining Zibo City Energy Conversation Award by
Award
Zibo City People’s Government （Zi-Zheng-Zi [2012] No.54）
Notice on the Printing and Issuing the Administrative Measures of
Patent Development Fund 20,000.00 Shandong Patent Development Specific Fund by Shandong
General Office of Finance and Shandong Intellectual Property
Subsidies for Xinjiang 4,233,848.00 Notice on Printing and Distributing Management Method on
119
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Cotton out of Xinjiang Subsidy for Xinjiang Cotton out of Xinjiang by Finance Bureau
Financial award funds on Notice on Draft Allocating Budget Target Financial Award Funds
transform of 2,660,000.00 on Transform of Energy-saving Technology (Phase II) of 2011
energy-saving technology (Zi-Cai-Zheng-Zhi [2011] No.108)
Rewards such as Reward Circular of People’s Government of Zichuan District on
for energy-saving and 1,160,000.00 Rewarding Part of Enterprises and Projects of 2012 (Chuan-Wei
consumption reduction [2012] No. 16)
Special funds for Notice on Allocating Special Funds for Independent Innovation
1,786,000.00
Independent Innovation ([2012] No.6) of Finance Bureau of Zichuan District
Notice on Issuing Budget Target of Subsidy for Export Credit
Subsidies for export credit
450,000.00 Premium of 2011 by the State of Zibo Finance Bureau
premium
(Zi-Cai-Qi-Zhi [2011] No.46)
Notice on Publishing Allotment Method of Awards for Heating
Subsidies on heat
Measurement and Energy-saving Innovation Project of Existing
metering and energy 402,000.00
Residential Buildings of 2009 (Lu-Jian-Jie-Ke-Zi [2010] No.4) of
efficiency
Housing and Urban-Rural Development Bureau
Notice on Forward Notice on Putting Forward Heating Metering
and Energy Efficiency of Existing residential heating system in
Subsidies on Heat
North China and Gathering and Submitting Relevant Materials
metering and energy 300,000.00
such as Energy-saving Goals etc. (Lu-Cai-Jian [2011] No.14) of
efficiency
Finance Bureau of Shandong Province and Housing and
Urban-Rural Development Bureau
Special Funds for Notice on Issuing Special Fund for the Development of
Development of Agricultural Product Processing Enterprises by Financial Support
300,000.00
Agricultural Product of Autonomous Region of 2012 ([2012] No.69) of the Finance
Process Enterprises Bureau of Aksu District
Scientific and
Award Method on Science and technology of Shandong Province
technological progress 200,000.00
（Trial）
award
Government Quality Notice on Allotting Subsidy for Government Quality Reward of
Reward of Shandong 200,000.00 Shandong Province by Work Leading Group of “Quality Help to
Province President Thriving Shandong Province”
Notice on Issuing Budget Target of Import Subsidies of 2011
Import subsidies 162,500.00
(Zi-Cai-Qi-Zhi [2011] No.91)
Financial subsidies on Notice on Issuing Financial Subsidy on Loans of Supporting the
loans of supporting the 150,000.00 Poor Project of 2011 of the finance bureau in Aksu (A-Di-Cai-Fu
poor project [2012] No.2)
Notice on Allotting More Special Funds on Supporting
Receipt of discount
Agricultural Product Process Enterprises and Township
interest on loans of 100,000.00
Enterprises of Autonomous of 2011 (Xin-Nong-Chan-Cai [2011]
township enterprises
No.16) of Xinjiang Uygur Autonomous Region
120
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Special funds for Notice on Issuing Budget Target of Special Funds for
development of Development of Enterprises and Colleges as well as Training Base
100,000.00
enterprises and colleges as of 2011 (Zibo-Finance Bureau Document Cai-Qi) of Finance
well as training base Bureau of Zibo
Scientific and Circular on Commending Scientific and Technological Progress
technological progress 60,000.00 Award of Y2011 of People’s Government of Zichuan District
award (Chuan-Zheng-Fa [2012] No.9)
Circular of People’s Government of Zichuan District on
Reward for energy-saving
Rewarding Advanced Units and Advanced Enterprises in Zichuan
and consumption 10,000.00
District in Energy-saving and Consumption Reduction in 2011
reduction
(Chuan-Zheng-Fa [2012] No.11)
Scientific and
technological progress 20,000.00 Award Method on Science and technology of Shandong Province
award
Subsidies for overseas Notice on Issuing Budget Target of Subsidy for Overseas Patent
10,000.00
patent application Application of 2011 (Chuan-Cai-Jiao-Zhi [2012] No.2)
Notice on Providing Premium Subsidies For Enterprises Involved
Subsidies for export credit
41,000.00 in Export Credit Insurance (Zi-Zheng-Ban-Zi [2009] No.96)of the
premium
General Office of People’s Government of Zibo Municipality
Subsidies for Transferring The Circular on Printing and Distributing the Notice on
Xinjiang Cotton Yarn to Temporary Management Method for Subsidies for Transferring
1,162,200.00
Warehouses out of Xinjiang Cotton Yarn to Warehouses Out of Xinjiang (Cai-Jian
Xinjiang [2009] No. 561) of Ministry of Finance
Notice on Printing and Distributing Management Method for Key
Economic Parks in Gaoqing County (Gao-Cai-Fa [2002] No.28) of
People’s Government of Gaoqing County and Supplementary
Local support fund 2,365,753.00
Agreement Signed between People’s Government of Gaoqing
County, the Management Committee of Economic Development
District of Gaoqing County, and the Company
Amortization of deferred
677,125.92 677,125.92 Amortization of deferred income
income
Total 12,871,925.92 16,550,426.92 --
Notes of non-operating incomes
47. Non-operating expenses
Unit: RMB yuan
The amount included in
Item Reporting period Same period of last year the current non-recurring
gains and losses
Loss on disposal of non-current assets 122,406.85 626,520.62
121
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Including: Loss on disposal of fixed assets 122,406.85 626,520.62
External donation 211,289.70 1,152,386.12
Penalty expense 17,875.00 10,771.24
Compensation expense 525,859.57 353,029.87
Other 6,325.17 100.71
Total 883,756.29 2,142,808.56
Notes of non-operating expenses
48. Income tax expense
Unit: RMB yuan
Item Reporting period Same period of last year
Current income tax expense accounted by tax and relevant
82,161,607.41 49,041,744.23
regulations
Adjustment of income tax 1,531,300.69 724,474.56
Total 83,692,908.10 49,766,218.79
49. Calculation procedure of basic earnings per share and diluted earnings per share
The basic EPS should be calculated by the current net profits which belongs to the Company’s common shareholders, to
divides the weighted average of the common shares outstanding. The new issued common shares should according to the
specific clauses of the issued contract, and should be calculated and confirmed from the date of accounts receivable of co
nsideration (generally as the issue date of shares).
The molecule of the gains of diluted EPS belongs to the Company’s current net profit of the common shareholders, and would
confirmed after the adjustments as below: (1) The interest of the diluted potential common shares confirmed in the reporting period;
(2) Profits or expenses from the conversion of the diluted potential common shares; and (3) the above influences of the adjustment of
the income taxes.
The denominator of the gains of diluted EPS equals to the sum of the following two points: (1) In the basic EPS gains,
the weighted average of the issued common shares of the Company; and (2) the weighted average of the increased comm
on shares owning to the conversion of the assumed diluted potential common shares.
When calculating the weighted average of the issued shares which increased owning to the conversion of the diluted potential
common shares, those diluted potential common shares issued in the previous period, should be assumed to convert at the year-begin;
and the diluted potential common shares issued in the current year, should be assumed to convert on the issuance date.
(1) List of earnings per share and diluted earnings per share in each period
Profit in reporting period Reporting period Same period of last year
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profit belongs to the Company’s 0.43 0.43 0.30 0.30
common shareholders
Net profit distributable to common 0.41 0.41 0.30 0.30
shareholders of the Company after
122
Semi-annual Report 2013 of Luthai Textile Co., Ltd.
deducting non-recurring gains and
losses
(2) Calculation procedure of basic EPS and diluted EPS
During the reporting period, there were no diluted potential common shares in the Company so that EPS-diluted equaled to basic
EPS.
①When calculated the EPS-basic, the net profits distributable to common shareholders were as follows:
Items Reporting period Same period of last year
416,175,890.38 301,503,288.19
Net profit distributable to common shareholders of the
Company
416,175,890.38 301,503,288.19
Of which ： Net profit distributable to continual
operating
Net profit distributable to discontinued
operating
Net profit distributable to common shareholders of the 393,419,324.10 302,733,028.86
Company after deducting non-recurring gains and
losses
393,419,324.10 302,733,028.86
Of which ： Net profit distributable to continual
operating
Net profit distributable to terminated
operating
②When calculated the EPS-basic, the denominator refers to the weighted average amount of outstanding issued common shares, and
the accounting process as follows:
Items Reporting period Same period of last year
960,057,496.00 1,008,954,800.00
Amount of outstanding issued common shares at period-begin
Add：weighted average amount of common shares issued at
current period
Deduct ： weighted average amount of common shares 709,500.00
repurchased at current period
Weighted average amount of outstanding issued common 959,347,996.00 1,008,954,800.00
shares at period-end
50. Other comprehensive income
Unit: RMB yuan
Item Reporting period Same period of last year
1. Converted amount of foreign currency financial statements -812,926.81 207,989.91
Subtotal -812,926.81 207,989.91
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Total -812,926.81 207,989.91
Notes of other comprehensive income
65. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Unit: RMB yuan
Item Amount
Government subsidy 12,194,800.00
Collection for employees 2,232,858.01
Claim income 1,164,796.51
Penalty income 99,654.82
Recovery of employee borrowings, petty cash and deposit 262,731.52
Other 14,393,297.04
Total 30,348,137.90
Notes:
(2) Other cash paid relevant to operating activities
Unit: RMB yuan
Item Amount
Transportation fees 26,019,025.74
Rent for sales counters and administration expense 9,120,311.37
Rent 4,817,647.93
Advertising fees 4,437,801.95
Business travel fee 4,202,866.01
Insurance expense 3,312,588.56
Bank charges 1,579,021.34
Inspection charges 1,343,956.89
Copyright royalty 1,820,132.08
Audit, consultancy and public notice expenses 1,610,930.87
Decoration and maintenance expense 2,957,590.26
Water and electricity expense 21,085.53
External donations 211,289.70
Advance for agricultural materials 2,998,800.00
Other 56,451,907.57
Total 120,904,955.80
Notes:
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(3) Other cash received relevant to investment activities
Unit: RMB yuan
Item Amount
Interest income 1,916,200.18
Trading financial assets investment income 17,649,677.42
Took back the margin of civilized construction 1,271,454.48
Total 20,837,332.08
Notes:
(4) Other cash paid relevant to financing activities
Unit: RMB yuan
Item Amount
Converted and re-purchased accounts of Share B 35,410,586.78
Accounts 78,000,000.00
Took back the margin of Xinjiang Luthai’s loan 16,950,000.00
Total 130,360,586.78
Notes
(5) Other cash paid relevant to financing activities
Unit: RMB yuan
Item Amount
Accounts paid back to related parties 53,900,000.00
Re-purchasing accounts of limited shares 20,207,865.00
Short-term loan margin 119,864,278.65
Total 193,972,143.65
Notes
52. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Unit: RMB yuan
Supplemental information Reporting period Same period of last year
1. Reconciliation of net profit to net cash flows generated
-- --
from operations：
Net profit 429,559,997.78 308,349,593.63
Add: Provision for assets impairments -2,922,150.92 3,155,937.27
Depreciation of fixed assets, oil-gas assets and productive
129,192,163.01 197,372,381.53
biological assets
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Amortization of intangible assets 5,221,482.37 5,260,142.03
Amortization of long-term deferred expense 47,536.25
Losses/gains on disposal of property, intangible asset and
-2,240,764.90 -296,249.12
other long-term assets (gains: negative)
Losses/gains on scrapped of fixed assets (gains:
463,760.75
negative)
Losses/gains from variation of fair value (gains: negative) 1,718,481.00 31,047,030.00
Financial cost (income: negative) 20,178,377.34 29,576,388.66
Investment loss (gains: negative) -17,649,677.42 -19,052,638.49
Decrease in deferred tax assets (increase: negative) 1,789,072.84 3,865,381.56
Increase in deferred tax liabilities (decrease: negative) -295,067.32 -3,129,129.57
Decrease in inventory (increase: negative) -90,539,396.20 -13,030,658.03
Decrease in accounts receivable from operating activities
22,295,309.84 110,529,861.85
(increase: negative)
Increase in accounts payable from operating activities
-5,608,443.50 -237,072,334.61
(decrease: negative)
Net cash flows generated from operating activities 490,746,920.17 417,039,467.46
2. Significant investing and financing activities without
-- --
involvement of cash receipts and payments
3. Change of cash and cash equivalent: -- --
Closing balance of Cash 530,885,795.41 439,679,107.11
Less: opening balance of cash 900,182,215.72 811,148,146.93
The net increase in cash and cash equivalents -369,296,420.31 -371,469,039.82
(2) Relevant information of acquisition or disposal of subsidiaries and other operation entities in the
reporting period
Unit: RMB yuan
Supplemental information Reporting period Same period of last year
I. Relevant information on acquisition of subsidiaries and
-- --
other operation entities:
II. Relevant information on disposal of subsidiaries and
-- --
other operation entities
1. Price of disposal of subsidiaries and other operation
951,000.00
entities
2. Cash and cash equivalents received for disposal of
951,000.00
subsidiaries and other operation entities
3. Net cash received from disposal of subsidiaries and other
951,000.00
operation entities
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(3) Composition of cash and cash equivalents
Unit: RMB yuan
Item Closing balance Opening balance
I. Cash 530,885,795.41 900,182,215.72
Including: Cash on hand 1,093,602.21 1,028,103.46
Bank deposit on demand 502,202,714.44 834,150,725.17
Other monetary funds on demand 27,589,478.76 65,003,387.09
II. Closing balance of cash and cash equivalents 530,885,795.41 900,182,215.72
Notes
VIII. Related Parties and Related-party Transactions
1. Information of the parent company of the Company
The
The parent The parent ultimate
Registe Legal
Parent Relati Business Registered company's company's controllin Organization
Business Type red Represe
company onship nature Capital shareholding voting right g party of Code
place ntative
(%) (%) the
Company
Textile,
Contro electric
Limited
Lucheng lling Liu power, Liu
Liability Zibo 63,260,000 12.27% 12.27% 16420039-1
Textile shareh Shizhen pharmaceuti Shizhen
Company
older cal
investment
Notes:
2. Information of subsidiaries of the Company
Percen Percen
Legal tage of tage of
Busine Registered Business Registered Organization
Full name Type representativ Shareh voting
ss type place nature capital code
e olding right
(%) (%)
Beijing Lufeng Private
Wholesale
Sunshine Clothing Co., Controlling enter RMB
Beijing Liu Shizhen and retail 100% 100% 55488176-X
Ltd. (hereinafter refer to subsidiary prise 15,000,000
trades
as “Lufeng Sunshine”)
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Beijing Sichuang Private
Wholesale
Clothing Co., Ltd. Controlling enter RMB
Beijing Liu Shizhen and retail 60% 60% 71774843-8
(hereinafter refer to as subsidiary prise 42,000,000
trades
“Beijing Sichuang”)
Private
Wholesale
Controlling enter Hong HKD
Luthai (Hong Kong) Liu Shizhen and retail 100% 100%
subsidiary prise Kong 6,000,000
trades
Shanghai Luthai Textile Private
Wholesale
Clothing Co., Ltd. Controlling enter RMB
Shanghai Liu Shizhen and retail 100% 100% 56659750-4
(hereinafter refer to as subsidiary prise 5,000,000
trades
“Shanghai Luthai”)
Xinjiang Luthai Private
Fengshou Cotton Co., Controlling enter Manufacturi RMB 59.92 59.92
Xinjiang Liu Shizhen 75165238-4
Ltd. (hereinafter refer to subsidiary prise ng 200.730,000 % %
as “Xingjiang Luthai”)
Private
Controlling enter Manufacturi RMB
Lufeng Textile Zibo Liu Shizhen 75% 75% 76001835-0
subsidiary prise ng 706,160,000
Private
Zibo Luqun Textile
Controlling enter Manufacturi RMB
(hereinafter refer to as Zibo Liu Shizhen 100% 100% 76870633-4
subsidiary prise ng 168,220,000
“Zibo Luqun Textile”)
Zibo Xinsheng Power Private
RMB
Co., Ltd. (hereinafter Controlling enter Manufacturi
Zibo Liu Shizhen 16,243,560, 100% 100% 61329023-1
refer to as “Xinsheng subsidiary prise ng
000
Power”)
Xinjiang Luthai Textile Private
Co., Ltd. (hereinafter Controlling enter Manufacturi RMB
Xinjiang Liu Shizhen 100% 100% 05317660-8
refer to as “Xinjiang subsidiary prise ng 50,000,000
Luthai Textile”)
Zibo Helijie Energy
Private
Saving Technology
Controlling enter RMB
Service Co., Ltd. Zibo Li Tongmin Service 100% 100% 57287269-9
subsidiary prise 10,000,000
(hereinafter refer to as
“Helijie”)
3. Information of joint ventures and associated enterprises
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Name Relationship Organization code
Zibo Stanluian Cosmetics Co., Ltd. (hereinafter called Affiliated person (same chairman as
61329036-2
“Stanluian”) the Company)
Controlling subsidiary of the parent
Zibo Taimei Tie Co., Ltd. (hereinafter refer to as “Taimei Tie”) 61329035-4
company
Zibo Limin Purified Water Co., Ltd. Wholly-owned subsidiary of the parent
76575998-3
(hereinafter refer to as “Limin Purified Water”) company
Zibo Luqu Land Co., Ltd. Wholly-owned subsidiary of the parent
77630667-2
(hereinafter refer to as “Luqu Land”) company
Wholly-owned subsidiary of the parent
Chengshun Power Co., Ltd. 69544896-X
company
Controlling subsidiary of wholly-owned
Limin Walling Material 56251579-4
subsidiary of the parent company
Hongqiao Hearting Other 75449967-X
Notes:
4. Related-party transactions
(1) Purchase of goods and acceptance of service
Unit: RMB yuan
Pricing method Reporting period Same period of last year
and
Related Content of the
decision-making
party transaction Amount Proportion (%) Amount Proportion (%)
procedures for the
transaction
Lucheng Towel, sock, oil
Market price 3,291,551.44 64.51% 2,470,111.77 100%
Textile products etc.
Lucheng
Fine staple cotton Market price 1,596,593.14 0.33%
Textile
Lucheng Processing charges for
Market price 341,159.32 0.26% 228,021.26 0.17%
Textile the leg of a stocking
Gift box for cosmetic,
Stanluian
lotion, washing-up Market price 70,216.10 100% 75,159.42 100%
Company
liquid, Liquid soap, etc.
Processing charges for
Taimei Ties commodities and quilt Market price 437,453.01 0.33% 577,601.73 0.42%
cover
Taimei Ties Purchase of ties Market price 183,858.97 100%
Limin Sewage disposal Market price 5,562,421.20 100% 3,302,232.84 100%
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Purified
Water
Limin
Walling Building materials Market price 194,049.56 1.61%
Material
Hongqiao
Electricity, steam Market price 29,139,798.88 17.91%
Heating
Sales of goods and rendering of service
Unit: RMB yuan
Pricing method Reporting period Same period of last year
and
Related
Content of the transaction decision-making
party Amount Proportion (%) Amount Proportion (%)
procedures for the
transaction
Lucheng Materials, electricity,
Market price 129,187.99 0.17% 148,541.60 1.57%
Textile running water and steam
Lucheng Dyed yarn, facing material
Market price 337,012.82 0.02% 319,686.50 0.01%
Textile and garments
Electricity, heating charges,
Taimei Ties Market price 14,402.84 0% 9,259.95 0.11%
garment etc.
Materials, electricity,
Stanluian
running water and heating Market price 27,321.39 0% 20,083.86 0.21%
Company
charges
Limin
Purified Materials and garment, etc. Market price 4,381.74 0% 84,516.53 0.01%
Water
Materials, heating power, l
Chenshun
ow temperature hot water Market price 2,381,827.08 0.31% 3,210,811.85 3.4%
Heating
and garment, etc.
(2) Information of related-party lease
Rental situation of the Company
Unit: RMB yuan
Rental income
Name of Name of Category of the Pricing basis for recognized in
Initial date Ending date
lessor lessee leased assets the rental income the reporting
period
Lucheng House and
Luthai Textile 1 July. 2008 31 Dec. 2013 Market price 76,818.00
Textile building
Xinsheng Chengshun House and
1 Jan. 2013 31 Dec. 2013 Market price 2,250.00
Power Power building
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Lease situation of the Company
Unit: RMB yuan
Lease charges
Name of Name of Category of the Pricing basis for
Initial date Ending date recognized in the
lessor lessee leased assets the lease charges
reporting period
Lucheng Luthai
Rent of land 1 Jan. 2013 31 Dec. 2015 Market price 1,897,800.00
Textile Textile
Lucheng Luthai
Rent of gas station 1 Aug. 2008 31 Dec. 2013 Market price 241,278.00
Textile Textile
Lucheng Luthai Rent of land and
1 Jan. 2008 31 Dec. 2013 Market price 201,720.00
Textile Textile buildings
Luthai Rent of land and
Luqun Land 1 Jan. 2013 31 Dec. 2015 Market price 901,200.00
Textile buildings
Lufeng
Lucheng
Weaving & Rent of buildings 1 Jan. 2013 31 Dec. 2015 Market price 348,600.00
Textile
Dyeing
Notes of related-party lease
(3) Related-party call loan
Unit: RMB yuan
Amount of call
Related party Initial date Due date Note
loan
Loan from banks and other financial institutions
Accounts borrowed by Luqun Textile in the
reporting period, and already paid back 43,900,000
Lucheng yuan for the previous accounts borrowed in the
78,000,000.00 6 Mar. 2013 31 Dec. 2013
Textile reporting period ; already paid back 8.1 million
yuan for the loans of those years in the reporting
period
Chenshun Accounts borrowed by Luqun Textile in the last
4,700,000.00 17 Jan. 2012 31 Dec. 2013
Power year, and already paid back 1.9 million yuan
Taimei Ties 2,650,000.00 5 Jan. 2011 31 Dec. 2013 Accounts borrowed by Luqun Textile in 2011
Stanluian
2,190,000.00 5 Jan. 2011 31 Dec. 2013 Accounts borrowed by Luqun Textile in 2011
Company
Lending to banks and other financial institutions
(4) Information about assets transfer, debt reorganization of related parties Unit: RMB yuan
Reporting Same Reporting Same period Reporting period Same period of last year
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
period period period of last year
of last Amount Proportion (%) Amount Proportion (%)
year
Purchasing
Lucheng Purchasi
spinning Market price 4,718,535.99 1.88%
Textile ng
machine
Limin Purchasing
Purchasi
Purified storage Market price 2,399.67 0.01% 133,142.88 0.05%
ng
Water bucket
5. Amounts due from/to related parties
Amount due from related parties
Unit: RMB yuan
Closing balance Opening balance
Name Related party Bad debts Bad debts
Book balance Book balance
provision provision
Amount due to related parties
Unit: RMB yuan
Name Related party Closing balance Opening balance
Accounts payable: Lucheng Textile 136,159.00 136,159.00
Other accounts payable Lucheng Textile 69,900,000.00 43,900,000.00
Other accounts payable Chengshun Power 2,800,000.00 4,700,000.00
Other accounts payable Taimei Ties 2,650,000.00 2,650,000.00
Other accounts payable Stanluian Company 2,190,000.00 2,190,000.00
IX．Share-based Payment
1. Overview of share-based payment
Unit: RMB yuan
Total of each equity instrument expired in the
4,257,000.00
reporting period
Scope of excising price and remaining contract term
of stock options that externally issued as at the 5.025 yuan/share, 26 months
period-end
Notes:
"Luthai Textile Co., Ltd. 2011 Restricted Stock Incentive Plan (revised draft)" (hereinafter referred to as "Incentive Plan") has been
passed in the Company’s 2011 second extraordinary general meeting, and its main content is as follows:
(1) The category of the underlying stocks: The underlying stocks of the incentive target awarded by the incentive plan we
re the Luthai Textile limited stocks.
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(2) The source of the underlying stocks: The source of the underlying stocks of the incentive target awarded by the incen
tive plan was the RMB common shares (A shares) of Luthai Textile that the Company issued directionally to the incentiv
e target.
(3) The incentive target: Through the statistics of the Remuneration and Appraisal Committee and the audition of the boar
ds of supervisors, the staff amounted to 344 people, who met with the qualification of the incentive target of this plan, w
ould be 2.15% of the Luthai Textile staff as to 31 Dec. 2013, including one direct relative of the actual controller.
(4) Notes of the restricted period plan of the stocks: The term of validity of this incentive plan was 48 months, and woul
d be counted from the date of award of the underlying stocks. The lock-up period of the limited stocks, which the Comp
any awarded to the incentive target, would be 12 months counted from the date of award. During the lock-up period, the
limited stocks which were owned by the incentive target through this plan would not be transferred. The unlocking perio
d was 36 months after the lock-up period and during which, if met with the unlocking situations of this incentive plan, t
he incentive target could unlock the stocks of three times application, which were 12 months, 24 months, 36 months after
the date of award respectively, and would receive 40%, 30%, 20% respectively of the total of the limited stocks by appl
ying unlock.
(5) The unlock conditions: The plan awarded the incentive target of three-term unlock of the limited stocks, of which met
with the unlock conditions during the unlocking period; the incentive target could apply for the unlocking as well as the
listing and circulating of the stocks. The arrangement of the unlocking and the performance conditions of the Company
would be listed as the form below:
Unlocking arrangement Performance conditions Unlocking proportion
The first unlocking after 12 The rate of the 2011 net assets profits was not less than 40%
months of the award date the twice of the average level of the listed companies of
same industry; the growth rate of the 2011 net profits was
not less by 15% than 2011; the net amount of the 2011
operating cash flow was not less than the current net
profit.
The second unlocking after 24 The rate of the 2012 net assets profits was not less than 30%
months of the award date the twice of the average level of the listed companies of
same industry; the growth rate of the 2012 net profits was
not less by 25% than 2011; the net amount of the 2012
operating cash flow was not less than the current net
profit.
The third unlocking after 36 The rate of the 2013 net assets profits was not less than 30%
months of the award date the twice of the average level of the listed companies of
same industry; the growth rate of the 2013 net profits was
not less by 35% than 2011; the net amount of the 2013
operating cash flow was not less than the current net
profit.
The net profit deducting the non-recurring gains and losses belong to the shareholders of the Company during each year of 2011 and
2013 were not less than the average level of the current three accounting years (2008, 2009, and 2010) before the award date and at
the same time should not be negative. When calculating the growth rate of the net profits, the index of the net profits should base on
the lower one of the “net profits belong to the shareholder of the listed companies” and the “net profits deducting of the non-recurring
gains and losses belongs to the listed companies”.
The incentive target applies for the unlocking of the limited stocks awarded according this plan, should meet with the following
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
conditions in addition to meeting with the Company’s performance conditions listed above:
The Company had not happened each of the following situations yet: Had been issued by the CPA of the negative advice
or the CPA could not offer any advice for any of the financial and accounting report of current accounting year; had be
en sentenced of administrative penalties by the CSRC of the significant violation behaviors within one year; and the other
situations that the CSRC considered not to carry out the incentive plan of the limited stocks.
The incentive target had not happened each of the following situations: During the current three years had been condemne
d in public or been announced as unsuitable candidate by Securities Exchange; during the current three years had been se
ntenced f administrative penalties by the CSRC of the significant violation behaviors; had the situation set by the” Corpor
ation Law” that not to take charge of the directors, supervisors and senior managers; the incentive target ended the labor
contract unilateral before the compliment of this plan; the Company had sufficient evidences that could prove the violation
s, or serious dereliction of duty, malfeasance that had ruined the Company’s interests as well as the reputation by the mis
appropriation of funds, job occupation, theft, leakage of the management and technical secrets, which led the great losses
of the Company; the performance appraisal passed of the last year before the unlocking of the incentive target was accord
ing to the “Implementation Assessment Methods of The Incentive Plan of The Limited Stocks of Luthai Textile Co., Ltd.”.
(6) The awarded quantity and price of the limited stocks: The amount of the limited stocks of the incentive target awarded by the
incentive plan is 14,090,000 shares, and the awarded price is RMB 5.025.
The 23rd meeting of the sixth board of directors of the company reviewed and passed the resolution of Motion about the Repurchase
Cancellation of the Restricted Stocks Have Been Granted to the Original Incentive Targets Does Not Comply with the Incentive Targ
et Excitation Conditions on Aug. 13, 2012. The original incentive targets Liu Qingchun and Shi Qian do not comply with the Article
1 of the restricted stock incentive plan of the company, The Unlock arrangement and Assessment Conditions of Restricted Stock beca
use they had left their jobs in the assessment period. Thus the company repurchased and canceled all the 60,000.00 shares had grante
d to them with RMB 5.025 per share.
The 23rd meeting of the sixth board of directors of the company passed Motion about the Restricted stocks Can Be Unlocked in the F
irst Unlock Period of the Incentive Plan. 40% of the restricted stocks, 5.612 million shares, were unlocked for the first patch.
According to the About the Repurchase Cancellation of the Motion Does Not Comply with the Incentive Target Excitation Condition
s of Restricted Stock Have Been Granted but Not Yet Unlocked and the About the Repurchase Cancellation of the Motion of Restrict
ed Stock Have Not Yet been Unlocked in Second Unlock Period of 26th meeting of the sixth board of directors held on
27 Mar. 2013 the company repurchase canceled 4,257,000.00 shares which did not comply with the incentive target excitation conditi
ons and haven been granted but not yet unlocked.
As of Jun. 30, 2013 the restricted stocks had not yet been unlocked were 4.161 million shares.
2. Information of equity-settled share-based payment
Unit: RMB yuan
Recognition method on fair value of equity instruments at the
The closing price of A-share on the day before the grant day
grant date
Recognition method on the best estimate of the number of Whether employee service conditions and non-market conditions
vesting equity instruments in incentive plan of the Company meet with the best estimate
Accumulated amount of equity-settled share-based payment in
56,020,620.80
capital reserves
Total expense recognized for the equity-settle share-based 56,020,620.80
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
payment
Notes:
X. Contingency
1. Contingent liabilities and its financial effect arising from loan guarantee offered to other companies
Other contingent liabilities and its financial effect:
As to 30 Jun. 2013, information about physical assets pledged by controlled subsidiaries for the purpose of acquiring bank
loans.
Company Pledged asset Asset value Acquired loan Term of borrowing
Xinjiang Luthai Inventory 154,724,889.38 193,000,000.00 2012.11.15-2013.9.17
Xinjiang Luthai Land-use right 7,933,760.45 37,000,000.00 2012.8.30-2013.8.29
Xinjiang Luthai Land-use right 18,178,494.20 29,900,000.00 2013.4.10-2014.3.12
XI. Commitments
1. Significant commitments
Unit: RMB ten thousand yuan
Item Closing balance Opening balance
Commitments signed but hasn’t been recognized in
financial statements
- Commitment for constructing and purchasing long-term 23,882 12,143.17
assets
Total 23,882 12,143.17
2. Fulfillment of prior commitments
Item Contracted amount (RMB Ten Fulfillment of prior commitments
thousand)
Commitment for constructing and purchasing long-term 12,143.17 Fulfilled
assets
XII. Notes of other significant events
1. Assets and liabilities measured by fair value
Unit: RMB yuan
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Changes of gains Accumulative
Withdrawn
and losses of fair changes of fair
Item Opening amount impairment in Closing amount
value in the value included in
reporting period
reporting period equity
Financial assets
Derivative financial assets 18,388,641.00 -1,718,481.00 16,670,160.00
Subtotal of financial
18,388,641.00 -1,718,481.00 16,670,160.00
assets
Total of above 18,388,641.00 -1,718,481.00 16,670,160.00
Financial liabilities 0.00 0.00
2. Foreign currency financial assets and liabilities
Unit: RMB yuan
Changes of gains Accumulative
Withdrawn
and losses of fair changes of fair
Item Opening amount impairment in Closing amount
value in the value included in
reporting period
reporting period equity
Financial assets
Derivative financial assets 18,388,641.00 -1,718,481.00 16,670,160.00
Loans and accounts rece
779,130,834.14 712,524,542.48
ivable
Subtotal of financial
797,519,475.14 -1,718,481.00 729,194,702.48
assets
Financial liabilities 936,814,644.61 757,408,483.32
XIII. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable
Unit: RMB yuan
Closing balance Opening balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category Propo
Proporti Proporti Proporti
Amount rtion Amount Amount Amount
on (%) on (%) on (%)
(%)
Accounts receivable for which bad debt provisions are made on the group basis
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
Aging groups 197,109,364.43 100% 14,332,496.27 7.27% 243,212,168.85 100% 15,871,872.83 6.53%
Subtotal of groups 197,109,364.43 100% 14,332,496.27 7.27% 243,212,168.85 100% 15,871,872.83 6.53%
Total 197,109,364.43 -- 14,332,496.27 -- 243,212,168.85 -- 15,871,872.83 --
Notes to category of accounts receivable:
Accounts receivable with significant single amount and individually withdrawn bad debt provision at period-end
□ Applicable √ Inapplicable
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB yuan
Closing balance Opening balance
Book balance Book balance
Aging
Proporti Bad debt provision Proporti Bad debt provision
Amount Amount
on (%) on (%)
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 150,108,781.64 76.15% 7,505,439.08 210,747,757.45 86.65% 10,537,387.87
Subtotal for those
aging within 1 150,108,781.64 76.15% 7,505,439.08 210,747,757.45 86.65% 10,537,387.87
year
1-2 years 35,618,365.31 18.07% 3,561,836.53 14,950,074.94 6.15% 1,495,007.49
2-3 years 1,494,445.85 0.76% 298,889.17 14,148,234.65 5.82% 2,829,646.93
Over 3 years 9,887,771.63 5.02% 2,966,331.49 3,366,101.81 1.38% 1,009,830.54
Total 197,109,364.43 -- 14,332,496.27 243,212,168.85 -- 15,871,872.83
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Inapplicable
Accounts receivable with insignificant single amount but individually withdrawn bad debt provision at period-end:
□ Applicable √ Inapplicable
(2) Top five accounts receivable
Unit: RMB yuan
Name of company Relationship Amount Term Proportion (%)
Beijing Sichuang Clothing Controlling Within 1 year, 1 to 3 years, over
62,139,768.20 31.53%
Co., Ltd. subsidiary 3 years
TAL Non-related 20,034,575.70 Within 1 year 10.16%
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customer
Non-related
OXFORD 15,179,131.94 Within 1 year 7.7%
customer
Non-related
PVH 14,760,953.60 Within 1 year 7.49%
customer
Non-related
SEIDENSTICKER 7,562,189.67 Within 1 year 3.84%
customer
Total -- 119,676,619.11 -- 60.72%
(3) Accounts receivable due from related parties
Unit: RMB yuan
Name of company Relationship Amount Proportion (%)
Beijing Sichuang Controlling subsidiary 62,139,768.20 31.53%
Luthai (Hong Kong) Wholly-owned subsidiaries 296,875.98 0.15%
Lufeng Sunshine Wholly-owned subsidiaries 82,473.94 0.04%
Total -- 62,519,118.12 31.72%
2. Other accounts receivable
(1) Other accounts receivable
Unit: RMB yuan
Closing balance Opening balance
Provision for bad
Book balance Provision for bad debts Book balance
debts
Category
Propo Propo Propo
Proportio
Amount rtion Amount Amount rtion Amount rtion
n (%)
(%) (%) (%)
Other accounts receivable for which bad debt provisions are made on the group basis
Aging groups 33,276,926.87 100% 4,456,554.21 13.39% 37,263,140.09 100% 3,421,759.50 9.18%
Subtotal of groups 33,276,926.87 100% 4,456,554.21 13.39% 37,263,140.09 100% 3,421,759.50 9.18%
Total 33,276,926.87 -- 4,456,554.21 -- 37,263,140.09 -- 3,421,759.50 --
Notes of category:
Other accounts receivable with significant single amount and individually withdrawn bad debt provision at period-end:
□Applicable √ Inapplicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB yuan
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Closing balance Opening balance
Book balance Book balance
Aging
Proporti Bad debt provision Proporti Bad debt provision
Amount Amount
on (%) on (%)
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 13,124,183.03 39.44% 656,209.15 20,350,775.63 54.61% 1,017,538.78
Subtotal for
those aging 13,124,183.03 39.44% 656,209.15 20,350,775.63 54.61% 1,017,538.78
within 1 year
1-2 years 6,189,197.05 18.6% 618,919.71 12,419,307.04 33.33% 1,241,930.70
2-3 years 10,076,386.82 30.28% 2,015,277.36 1,856,272.02 4.98% 371,254.40
Over 3 years 3,887,159.97 11.68% 1,166,147.99 2,636,785.40 7.08% 791,035.62
Total 33,276,926.87 -- 4,456,554.21 37,263,140.09 -- 3,421,759.50
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□Applicable √Inapplicable
Other accounts receivable with insignificant single amount but individually withdrawn bad debt provision at period-end:
□ Applicable √ Inapplicable
(2) Top five other accounts receivable
Unit: RMB yuan
Name of company Relationship Amount Term Proportion (%)
Within 1 year, 1 to 3 years, over
Shanghai Luthai Come-and-go money 16,032,460.54 48.19%
3 years
Export rebates receivable Export rebates 2,871,405.80 Within 1 year 8.63%
Payment for Staff Re-purchasing amount of
2,150,255.10 1 to 2 years, over 3 years 6.46%
dormitories the staff dormitories
Guarantee margin of t
Deposits for wages paid
he migrant workers’ wa
to migrant workers in 1,458,593.50 1 to 2 years, over 3 years 4.38%
ges of infrastructural pr
Zichuan District, Zibo
oject
Overseas Sales Departm Paid exports of air freight
540,102.93 Within 1 year 1.62%
ent etc.
Total -- 23,052,817.87 -- 69.28%
(3) Other account receivable due from related parties
Unit: RMB yuan
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Name of company Relationship Amount Proportion (%)
Shanghai Luthai Wholly-owned subsidiary 16,032,460.54 48.19%
Total -- 16,032,460.54 48.19%
3. Long-term equity investments
Unit: RMB yuan
Explanatio Withdra
In ns on wal
Cash
cre difference amount
Provisi bonus
as Sharehol Voting s between of
Account on for in the
The Initial investment e/ ding right shareholdi impairm
ing Opening balance Closing balance impair report
investee cost de Proporti Proporti ng ent
method ment ing
cre on on proportion provisio
loss perio
as and voting n in the
d
e right reportin
proportion g period
Beijing Cost
25,200,000.00 25,200,000.00 25,200,000.00 60% 60%
Sichuang method
Xinjiang Cost
117,342,316.95 117,342,316.95 117,342,316.95 59.92% 59.92%
Luthai method
Xinsheng Cost
176,340,737.93 176,340,737.93 176,340,737.93 100% 100%
Power method
Lufeng
Cost
Weaving 529,620,000.00 529,620,000.00 529,620,000.00 75% 75%
method
& Dyeing
Luqun Cost
171,784,550.00 171,784,550.00 171,784,550.00 100% 100%
Textile method
Luthai
Cost
(Hong 6,366,600.00 6,366,600.00 6,366,600.00 100% 100%
method
Kong)
Lufeng Cost
15,000,000.00 15,000,000.00 15,000,000.00 100% 100%
Sunshine method
Shanghai Cost
5,000,000.00 5,000,000.00 5,000,000.00 100% 100%
Luthai method
Rongchan
Cost
g 55,282,600.00 55,282,600.00 55,282,600.00 5.56% 5.56%
method
Pharmacy
Total -- 1,101,936,804.88 1,101,936,804.88 1,101,936,804.88 -- -- --
Notes:
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Semi-annual Report 2013 of Luthai Textile Co., Ltd.
4. Revenue and Cost of Sales
(1) Revenue and Cost of Sales
Unit: RMB yuan
Item Reporting period Same period of last year
Main business revenue 2,149,366,934.57 2,114,438,399.15
Other business revenue 76,814,496.53 82,177,082.90
Total 2,226,181,431.10 2,196,615,482.05
Cost of sales 1,593,126,834.70 1,679,182,666.68
(2) Main business (Classified by product)
Unit: RMB yuan
Reporting period Same period of last year
Product
Revenue of sales Cots of sales Revenue of sales Cots of sales
Fabric products 1,610,809,430.54 1,151,606,625.83 1,530,542,447.91 1,211,696,693.45
Shirts 538,557,504.03 382,682,082.60 583,895,951.24 407,329,954.01
Total 2,149,366,934.57 1,534,288,708.43 2,114,438,399.15 1,619,026,647.46
(3) Main business (Classified by area)
Unit: RMB yuan
Reporting period Same period of last year
Area
Revenue of sales Cots of sales Revenue of sales Cots of sales
Hong Kong 154,730,748.77 110,617,012.29 222,413,616.39 176,084,860.10
Japan and South Korea 199,291,512.71 141,960,176.81 229,769,189.46 168,776,193.08
Southeast Asia 465,940,349.00 333,094,532.71 356,826,772.78 282,499,756.01
Europe and America 447,481,616.09 318,462,117.03 530,958,776.30 385,876,820.40
Other 305,073,691.44 218,008,009.14 251,174,940.67 196,804,809.43
Domestic sales 576,849,016.56 412,146,860.45 523,295,103.55 408,984,208.44
Total 2,149,366,934.57 1,534,288,708.43 2,114,438,399.15 1,619,026,647.46
(4) Revenue of sales from the top five customers
Unit: RMB yuan
Proportion of total
Customers Total revenue of sales
revenue of sales (%)
Customer A 190,164,674.71 8.55%
Customer B 148,283,448.86 6.66%
Customer C 140,981,467.77 6.33%
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Customer D 100,352,589.93 4.51%
Customer E 67,304,775.40 3.02%
Total 647,086,956.67 29.07%
Notes:
5. Investment income
(1) List of investment income
Unit: RMB yuan
Item Reporting period Same period of last year
Long-term equity investment income accounted by cost
-549,000.00
method
Investment income received from disposal of trading
17,735,127.42 15,004,234.49
financial assets
Total 17,735,127.42 14,455,234.49
(2) Long-term equity investment income accounted by cost method
Unit: RMB yuan
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
Limin Walling Material -549,000.00
Total -549,000.00 --
6. Supplemental information of Cash Flow Statement
Unit: RMB yuan
Supplemental information Reporting period Same period of last year
1. Reconciliation of net profit to net cash flows generated from
-- --
operations：
Net profit 345,109,595.06 218,643,723.43
Add: Provision for assets impairments -504,581.85 1,827,033.97
Depreciation of fixed assets, oil and gas assets and productive biological
73,998,404.85 119,369,172.33
assets
Amortization of intangible assets 3,289,523.41 3,243,350.19
Amortization of long-term deferred expense -2,268,954.00 -199,595.78
Losses/gains on disposal of property, intangible asset and other long-term
6,059,541.00 24,697,730.00
assets (gains: negative)
Losses/gains on scrapped of fixed assets (gains: negative) 4,178,029.57 13,109,670.45
Losses/gains from variation of fair value (gains: negative) -17,735,127.42 -14,455,234.49
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Financial cost (income: negative) 1,791,039.57 -2,252,040.33
Investment loss (gains: negative) -908,931.15 -2,341,354.50
Decrease in deferred tax assets (increase: negative) -127,557,371.97 38,361,216.37
Increase in deferred tax liabilities (decrease: negative) -13,284,386.32 131,976,225.19
Decrease in inventory (increase: negative) 81,625,404.78 -109,565,788.89
Net cash flows generated from operating activities 353,792,185.53 422,414,107.94
2. Significant investing and financing activities without involvement of
-- --
cash receipts and payments
3. Change of cash and cash equivalent: -- --
Closing balance of cash 313,065,949.09 268,644,073.54
Less: opening balance of cash 559,095,505.76 443,347,389.73
The net increase in cash and cash equivalents -246,029,556.67 -174,703,316.19
XIV. Supplemental information
1. List of current non-recurring gains and losses
Unit: RMB yuan
Item Amount Note
Loss and gains on disposal of non-current assets (Including write-off part of the provision for
2,240,764.90
asset impairment)
Governmental subsidy included in the current profits and losses(is closely related with the
business event, except for the governmental subsidy that according to the national unity 12,871,925.92
standard quota or the quantitative regal assets)
In addition to the valid hedging activity associated with the normal operation of the
Company, the changes in fair value through gains or losses which arising from the holding
trading financial assets and the trading financial liabilities as well as the investment income 15,931,196.42
that earning from the disposal of trading financial assets, trading financial liabilities and
available-for-sale financial assets
Income and expenses of the other operation except for the mentioned above 2,073,308.09
Less: the effect of income tax 6,234,507.70
The effect of minority interest (after tax) 4,126,121.35
Total 22,756,566.28 --
According to the company's "public offering of securities of the Company Disclosure Explanatory Notice No. 1 - non-recurring loss"
definition for non-recurring items, as well as the "public offering of securities of the Company Disclosure Explanatory Notice No. 1 -
- non-recurring items "listed in non-recurring items defined as recurring items, should explain the reasons
□Applicable √ Inapplicable
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2. Accounting data differences according to the domestic and foreign accounting standards
(1) Different situations of the net profits and net assets in the financial disclosure reports in accordance wi
th the international accounting standards and Chinese accounting standards at the same time
Unit: RMB yuan
Net profits belongs to the shareholders of the listed Net assets belongs to the shareholders of the
companies listed companies
Current period amount Last period amount Closing balance Opening balance
According China Accounting
416,175,890.38 301,503,288.19 5,401,065,428.89 5,268,701,258.26
Standards
Items and amounts adjusted in accordance with international accounting standards
The influence of the
purchasing of the domestic
equipment for tax recognized
842,500.00 859,000.00 -3,960,500.00 -4,803,000.00
to deferred incomes according
to International Accounting
Standards
According to International
417,018,390.38 302,362,288.19 5,397,104,928.89 5,263,898,258.26
Accounting Standards
(2) Notes of the reasons of the differences between the accounting data according to the domestic and
foreign accounting standards
1. Influences of the domestic equipments which offset the income tax of enterprises
The Company enjoyed the offset of the enterprises income tax when purchasing domestic equipments, and would directly decreased
the income taxes expenses according to China Accounting Standards, and at same time be recognized as the deferred income
related to the assets according to International Accounting Standards. According to the rules of International Accounting Standards,
the Company would amortization the differences by terms according to the fixed assets, to adjust the net profits and net assets.
3. Return on equity and earnings per share
Unit: RMB yuan
The weighted average ROE EPS
Profit in the reporting period
(%) Basic EPS Diluted EPS
Net profit distributable to the Company's
7.60% 0.43 0.43
common stock shareholders
Net profit distributable to shareholders of the
Company's common stock after deducting 7.11% 0.41 0.41
non-recurring gains and losses
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4. Particulars on the abnormal conditions of main items in the financial statements of the Company and
relevant reasons.
1. As of 30 Jun. 2013, closing amount of prepayments was of RMB 148,691,207.68 yuan, with an increase of 54.54% compared with
opening amount, mainly because the prepayments of the materials increased at the period-end.
2. As of 30 Jun. 2013, closing amount of other current assets was of RMB 39,485,455.86 yuan, with a decrease of 41.99% compared
with opening amount, mainly because the re-purchasing accounts of B shares was put into the currency assets in this period.
3. As of 30 Jun. 2013, closing amount of engineering materials was of RMB 32,730,518.84 yuan, with an increase of 17
1.45% compared with opening amount, mainly because the recipients special equipments increased.
4. As of 30 Jun. 2013, closing amount of other non-recurring assets was of RMB 43,401,290.00 yuan, with an increase of 450.03%
compared with opening amount, mainly because the land prepayments increased.
5. As of 30 Jun. 2013, closing amount of taxes payable was of RMB 82,289,036.12 yuan, with an increase of 61.75% co
mpared with opening amount, mainly because the urban maintenance and construction taxes increased and the income taxe
s increased.
6. As of 30 Jun. 2013, closing amount of non-current liabilities due in one year was of RMB 61,787,000.00 yuan, with an increase of
380.77% compared with opening amount, mainly because the long-term loans due in one year increased.
7. As of Jan.-Jun. 2013, the occurred amount of business taxes and surcharges was of RMB 31,735,647.82 yuan, with an
increase of 1,244.20% compared with the last period, mainly because the urban maintenance and construction taxes and ed
ucational surcharges etc. increased.
8. As of Jan.-Jun. 2013, the occurred amount of financial expenses was of RMB 24,336,940.28 yuan, with a decrease of 33.76%
compared with the last period, mainly because the interest expenses decreased in the reporting period.
9. As of Jan.-Jun. 2013, the occurred amount of losses from assets devaluation was of RMB -2,922,150.92 yuan, with a decrease of
192.59% compared with the last period, mainly because the losses from assets devaluation recognized by aging of the accounts
receivable decreased compared with the last period.
10. As of Jan.-Jun. 2013, the occurred amount of profits changes of fair value was of RMB -1,718,481.00 yuan, with an increase of
94.46% compared with the last period, mainly because the disposal of expired trading financial assets which relevantly carried down
the original recognized gains and losses changes of fair value and the changes of fair value of the trading financial assets.
11. As of 30 Jun. 2013, the occurred amount of non-operating costs was of RMB 883,756.29 yuan, with a decrease of 58.76%
compared with the last period, mainly because the losses disposal of the fixed assets decreased compared with the last period.
12. As of Jan.-Jun. 2013, the occurred amount of income taxes expenses was of RMB 83,692,908.10 yuan, with an increase of
68.17% compared with the last period, mainly because the income taxes payable increased in the reporting period.
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IX. Documents for Reference
I. Accounting statement signed by legal representative, responsible person in charge of
accounting work and responsible person of accounting department;
II.In the reporting period, all originals of the Company’s documents and public notices have
been publicly disclosed in Securities Times, Shanghai Securities News and Ta Kung Pao.
Signature of the Chairman of the Board of Directors:
LUTHAI TEXTILE CO., LTD.
16 Aug. 2013
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