Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
Stock code: 000726, 200726 Stock abbreviation: LTA, LTB Announcement No.: 2015-013
Lu Thai Textile Co., Ltd.
Abstract of the Report for the First Quarter of 2015
Section I. Important Reminders
The Board of Directors, the Supervisory Committee, directors, supervisors and
senior management staff of Lu Thai Textile Co., Ltd. (hereinafter referred to as
“the Company”) warrant that the information carried in this report is factual,
accurate and complete, without any false record, misleading statement or
material omission. And they shall be jointly and severally liable for that.
All directors have attended the board session for reviewing this report.
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 statements enclosed in this report are 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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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
Section II. Financial Highlights & Change of Shareholders
I. Main 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
Jan.-Mar. 2015 Jan.-Mar. 2014 +/- (%)
Operating revenues (RMB Yuan) 1,428,557,406.74 1,524,854,012.98 -6.32%
Net profit attributable to shareholders of the Company (RMB Yuan) 152,714,080.35 213,792,166.20 -28.57%
Net profit attributable to shareholders of the Company after
131,929,166.88 227,859,696.84 -42.10%
extraordinary gains and losses (RMB Yuan)
Net cash flows from operating activities (RMB Yuan) -97,329,127.52 55,775,238.83 -274.50%
Basic EPS (RMB Yuan/share) 0.16 0.22 -27.27%
Diluted EPS (RMB Yuan/share) 0.16 0.22 -27.27%
Weighted average ROE (%) 2.29% 3.51% -1.22%
31 Mar. 2015 31 Dec. 2014 +/- (%)
Total assets (RMB Yuan) 8,698,973,617.97 8,627,671,393.88 0.83%
Net assets attributable to shareholders of the Company (RMB Yuan) 6,741,743,242.88 6,588,772,245.55 2.32%
Items and amounts of extraordinary gains and losses
√ Applicable □ Inapplicable
Unit: RMB Yuan
Item Jan.-Mar. 2015 Explanation
Gains/losses on the disposal of non-current assets (including the offset part of the asset
357,152.45
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 3,086,413.47
government’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
19,330,543.33
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 961,226.39
Income tax effects 2,701,309.01
Minority interests effects (after tax) 249,113.16
Total 20,784,913.47 --
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
No such cases in the reporting period.
II. Total number of shareholders at the period-end and shareholdings of top 10 shareholders
1. Total number of common shareholders at the period-end and shareholdings of top 10 common
shareholders
Unit: share
Total number of shareholders at the
75,039
period-end
Shareholdings of top 10 shareholders
Pledged or frozen
Sharehol
Number of shares
ding Number of
Name of shareholder Nature of shareholder restricted Status
percenta shares held Number of
shares held of
ge shares
shares
Domestic
Pledge
Zibo Lucheng Textile Investment Co., Ltd. non-state-owned 14.69% 140,353,583 26,000,000
d
corporation
Tailun (Thailand) Textile Co., Ltd. Foreign corporation 12.37% 118,232,400 118,232,400
DBS VICKERS (HONG KONG) LTD A/C
Foreign corporation 2.74% 26,213,346
CLIENTS
LYNAS ASIA FUND Foreign corporation 1.82% 17,364,475
VALUE PARTNERS HIGH-DIVIDEND
Foreign corporation 1.72% 16,411,865
STOCKS FUNDS
UBS AG Foreign corporation 1.38% 13,173,194
T.ROWE PRICE INTL DISCOVERY FUND Foreign corporation 0.91% 8,704,074
First State Investment Management UK
Foreign corporation 0.90% 8,597,472
Limited－First State China A Share Fund
VALUE PARTNERS CLASSIC FUND Foreign corporation 0.85% 8,156,383
NATIONAL WESTMINSTER BANK PLC
AS DEP OF FS GREATER CHINA Foreign corporation 0.82% 7,858,094
GROWTH FUND
Shareholdings of top 10 non-restricted common shareholders
Name of shareholder Number of Variety of shares
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
non-restricted
Variety Number
common shares held
Zibo Lucheng Textile Investment Co., Ltd. 140,353,583 RMB ordinary shares 140,353,583
DBS VICKERS (HONG KONG) LTD A/C CLIENTS 26,213,346 Domestically listed foreign shares 26,213,346
LYNAS ASIA FUND 17,364,475 Domestically listed foreign shares 17,364,475
VALUE PARTNERS HIGH-DIVIDEND STOCKS
16,411,865 Domestically listed foreign shares 16,411,865
FUNDS
UBS AG 13,173,194 RMB ordinary shares 13,173,194
T.ROWE PRICE INTL DISCOVERY FUND 8,704,074 Domestically listed foreign shares 8,704,074
First State Investment Management UK Limited－
8,597,472 RMB ordinary shares 8,597,472
First State China A Share Fund
VALUE PARTNERS CLASSIC FUND 8,156,383 Domestically listed foreign shares 8,156,383
NATIONAL WESTMINSTER BANK PLC AS DEP
7,858,094 Domestically listed foreign shares 7,858,094
OF FS GREATER CHINA GROWTH FUND
Nan Shan Life Insurance Company, Ltd. 6,872,500 RMB ordinary shares 6,872,500
Zibo Lucheng Textile Investment Co., Ltd. is the first largest shareholder of
the Company and also is the actual controlling shareholder. Tailun
Explanation on associated relationship or persons (Thailand) Textile Co., Ltd. is the foreign sponsor shareholder and is also the
acting in concert among the above-mentioned second largest shareholder of the Company. All of other shareholders are
shareholders 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.
Top 10 common shareholders taking part in securities
N/A
margin trading (if any)
Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company conduct any
promissory repo during the reporting period?
□ Yea √ No
No such cases in the reporting period.
Section III. Significant Events
I. Significant changes of the major accounting statement items and financial indicators for the
reporting period, as well as the reasons for these changes
√ Applicable □ Inapplicable
1. Financial assets measured at fair value with changes recorded into current gains and losses as at
31 Mar. 2015 stood at RMB 2,399,200.00, up 100% from the opening amount, mainly because of
changes in the fair value of these financial assets.
2. Prepayments as at 31 Mar. 2015 stood at RMB 262,841,192.20, up 50.31% from the opening
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
amount, mainly because prepayments for raw materials increased.
3. Other current assets as at 31 Mar. 2015 stood at RMB 39,572,694.94, up 665.83% from the
opening amount, mainly because the input VAT and the prepaid income tax to be deducted both
increased.
4. Long-term deferred expenses as at 31 Mar. 2015 stood at RMB 42,350,433.78, up 49.55% from
the opening amount, mainly because the land rental expenses by Lu Thai Cambodia increased.
5. Financial liabilities measured at fair value with changes recorded into current gains and losses as
at 31 Mar. 2015 stood at RMB 0.00, down 100% from the opening amount, mainly because the
financial liabilities were settled and transferred into the gains on fair value changes.
6. Payroll payable as at 31 Mar. 2015 stood at RMB 172,099,833.99, down 34.20% from the
opening amount, mainly because the year-end bonuses for employees for 2014 were paid in the
current period.
7. Taxes and fares payable as at 31 Mar. 2015 stood at RMB 48,499,480.61, down 34.51% from the
opening amount, mainly because the taxes and fares payable decreased.
8. Interest payable as at 31 Mar. 2015 stood at RMB 872,891.23, up 70.70% from the opening
amount, mainly because short-term borrowings increased.
9. Long-term payables as at 31 Mar. 2015 stood at RMB 0.00, down 100% from the opening
amount, mainly because of the payments for electricity and bonds.
10. Business tax and surtaxes for Jan.-Mar. 2015 stood at RMB 13,321,763.49, up 64.21% year on
year, mainly because the city construction & maintenance tax, the educational surcharges, etc.
increased.
11. Financial expenses for Jan.-Mar. 2015 stood at RMB 2,905,274.94, down 64.20% year on year,
mainly because the exchange gains increased.
12. Asset impairment losses for Jan.-Mar. 2015 stood at RMB 1,158,851.88, up 123.31% year on
year, mainly because accounts receivable increased.
13. Gains on fair value changes for Jan.-Mar. 2015 stood at RMB 5,705,400.00, up 119.81% year
on year, mainly because due financial assets were delivered, resulting in the carryover of the
previously recognized gain/loss on fair value changes, and the fair value of financial assets changed.
14. Non-operating incomes for Jan.-Mar. 2015 stood at RMB 4,816,916.15, up 71.23% year on year,
mainly because governmental subsidies increased.
15. Non-operating expense for Jan.-Mar. 2015 stood at RMB 412,123.84, down 59.58% year on
year, mainly because the losses on disposal of non-current assets decreased.
16. Net cash flows from operating activities for Jan.-Mar. 2015 stood at RMB -97,329,127.52,
down 274.50% year on year, mainly because the cash received from sale of goods and rendering of
services decreased.
II. Progress of significant events and analysis & explanations on their influence and solutions
□ Applicable √ Inapplicable
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
III. Commitments made by the Company or any shareholder with a shareholding over 5% in
the reporting period or such commitments made in previous period and carried down into the
reporting period
□ Applicable √ Inapplicable
No such cases in the reporting period.
IV. Predict the operating results of Jan.-Jun. 2015
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
V. Securities investments
□ Applicable √ Inapplicable
No such cases in the reporting period.
VI. Shareholdings in other listed companies
□ Applicable √ Inapplicable
No such cases in the reporting period.
VII. Investments in derivatives
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Proportion
Rela
of the
ted-
Impairm closing Actual
part
Type of Initial Opening ent Closing investment gain/loss
Relat y Beginning
Operator derivative investment Ending date investment provisio investment amount in in
ion trans date
investment amount amount n (if amount the reporting
actio
any) Company’ period
n or
s closing
not
net assets
The
non-a forward
commerci 14 Nov.
ssoci No foreign 94,519.94 28 Jan. 2015 21,213.88 28,813.35 4.02% 1,246.64
al bank 2014
ate exchange
settlement
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
non-a Foreign
commerci 11 Feb. 30 Mar.
ssoci No exchange 347.96 0 0 9.02
al bank 2015 2015
ate trading
non-a
commerci Share opti 26 Mar.
ssoci No 94,930 21 Oct. 2014 31,835 91,747.5 12.80% 106.85
al bank on group 2016
ate
Total 189,797.9 -- -- 53,048.88 120,560.85 16.82% 1,362.51
Capital source for derivative
Self-owned funds
investment
Cases involving lawsuit (if
No
applicable)
Disclosure date of the board
announcement approving the
27 Mar. 2014
wealth management entrustment
(if any)
Disclosure date of the general
meeting announcement approving
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
Analysis on risks and control
and rules as well as regulatory policies from government securities regulatory authorities, if
measures of derivative products
there were no standard operation procedures and strict approval procedures, it was easy to cause
held in the reporting period
compliant and regulatory risks existing in the validity and feasibility of contract, commitments
(including but not limited to
and other legal documents signed.
market risk, liquidity risk, credit
Precautionary measures: The Company carefully studied and mastered laws, regulations and
risk, operation risk, law risk, etc.)
policies relevant to derivative products transaction, formulated internal control rules for the
forward settlement hedging business, standardized the operation procedures. And strengthened
the compliant examination on derivative products investment business, and strictly abided by
relevant laws, regulations and the Company’s internal management rules.
2. Credit risk and liquidity risk:
When the contract matures, the Company couldn’t deliver as scheduled due to insufficient
liquidity, and the counterparty or the Company couldn’t fulfill the contract due to other aspects
except the liquidity, which would cause credit risk and further economic losses for the
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
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 Lu Thai Textile Co., Ltd. and the Proposal on the Plan of Lu Thai
Textile Co., Ltd. for Derivative Transactions and the relevant regulations of the Proposal on the
2014 Derivative Transactions Plan of Luthai Textile Co., Ltd. and performed relevant
information disclosure responsibilities. The Company decided the up limit for the amount of
derivative products transaction according to the production and operation scale and the progress
of foreign exchange income for the Company, and delivered by phases. It was also possible to
use extension of term and other ways to ensure the fulfillment of contract as schedules upon the
mature of contract, and wouldn’t cause any loss of credit risk for the Company due to
insufficient liquidity or other reasons.
3. Operation risk:
The derivative financial transactions had high specialty and complexity, so imperfect internal
operation procedures, staffs and external events would make the Company to undertake risks
during the transaction. Precaution measure: The Company promulgated strict authorization and
approval system and perfect regulatory mechanism, fixed the departments, operation procedures
and approval procedures system to conduct derivative products transaction, established special
risk control positions, implemented strict authorization and post checks and balances system,
meanwhile, it improved the overall quality of relevant personnel through strengthening the
business training and professional ethics education for them. Besides, it established the System
of Reporting the Abnormal Situation Timely, formed an efficient risk management procedures,
so as to ensure to lower the operation risks to the maximum.
4. Market risk:
The forward settlement of exchange is an important derivative products transaction, which was
significantly affected by the exchange rate fluctuation due to its large amount. The Central Bank
decided to expand the inter-bank spot RMB-dollar trading band from 1% to 2% since 17 Mar.
2014, which would increase the difficulty in the operation of forward settlement of exchange.
Besides, if the RMB is devalued by a large margin on the basis of the current situation before
the contract is due, so then, the larger losses shall incur in the contract on forward settlement of
exchange signed by the Company.
Risk analysis and precaution measure: Renminbi appreciated significantly compared with that
before the exchange rate reform, but Renminbi internationalization would be a long-term goal,
which decided that Renminbi would not depreciated significantly. Although the increased
fluctuation range added the operation difficulty, it provided a certain opportunity, which
required relevant personnel of the Company actively master the market trend, carefully operate
and hold positive opportunity, so as to try the best to reduce the market risks under the condition
of increased market difficulty.
Changes of market prices or fair 1. Up to 31 Mar. 2015, the Company held 31 undue financial derivative product contracts,
values in the reporting period of totaling US$ 203 million, of which there were about 7 forward foreign exchange settlements
the invested derivatives. And the with the total amount of US$ 45 million as well as there were about 24 foreign currency options
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
analysis on the fair value of the with the total amount of US$ 158 million (the latest expiration before Feb. 2016). The above
derivatives should include the financial derivative products accounted for 16.82% of the closing net assets.
specific use methods and the 2. From Jan. 2015 to Mar. 2015, the due financial derivative products of the Company totally
relevant assumptions and equaled to US$ 110.5662 million, which generated a gain of RMB 13.6251 million. The due
parameters. forward settlement was US$ 105 million, which generated a gain of RMB 12.4664 million; the
due forward foreign exchange trading amount equaled to US$ 0.5662 million, which generated
a gain of RMB 90,200; the due foreign currency options was US$ 5 million, which generated a
gain of RMB 1.0685 million.
Whether significant changes
occurred to the Company’s
accounting policy and specific
accounting principles of Unchanged
derivatives in the reporting period
compared to the previous
reporting period
The Company’s independent directors Zhou Zhiji, Zhang Chengzhu, Wanglei, Xu Jianjun and
Zhao Yao concerning conducting derivatives business, have issued the following professional
Specific opinion from advice: we were of the opinion that it would strengthen the Company’s competitiveness to use
independent directors on the derivative transactions with focus on forward settlement and purchase as an effective tool to
Company’s derivatives investment avoid foreign exchange risks, to strengthen the relevant internal control and to carry out the loss
and risk control 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.
VIII. Researches, visits and interviews received in the reporting period
√ Applicable □ Inapplicable
Main discussion and
Time of Place of Way of
Visitor type Visitor materials provided by the
reception reception reception
Company
Telephone EVERBRIGHT SECURITIES Li Jie, The Company's current
31 Mar. 2015 Institution
Communication Tang Shuangshuang situation
Telephone The Company's current
31 Mar. 2015 Institution Qilu Securities Han Liping
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Natural arch assets Hu Xin
Communication situation
Telephone Sheng Wan Spiritual Co., Ltd. Liu The Company's current
31 Mar. 2015 Institution
Communication Zongxun situation
Telephone JiangHai Securities Self-operation The Company's current
31 Mar. 2015 Institution
Communication Liuhua situation
31 Mar. 2015 Telephone Institution Hongdao Investment Ji Wei The Company's current
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Abstract of the Report for the First Quarter of 2015 of Lu Thai Textile Co., Ltd.
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Chang Xin Assets Huang Wei
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Hui Jie investment Xie Rui
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution JD Capital Chen Tao
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Jiangsu Xinye Shao Lei
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Yuan Cheng Investment Zeng Shang
Communication situation
Telephone Minsheng Tonghui Assets The Company's current
31 Mar. 2015 Institution
Communication Management Bai Fan situation
Telephone The Company's current
31 Mar. 2015 Institution Yin Tai Securities Zeng Liang
Communication situation
Telephone Shanghai Right Share Xu Wenguang The Company's current
31 Mar. 2015 Institution
Communication Han Ying situation
Telephone The Company's current
31 Mar. 2015 Institution Li Cheng Assets Weng Di
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Zong Yi Run Bang Liang Liang
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Tianfeng Securities Ding Ling Xiao
Communication situation
Telephone The Company's current
31 Mar. 2015 Institution Zhong Ou Fund Zhang Bo
Communication situation
Telephone Bank of China International Information The Company's current
31 Mar. 2015 Institution
Communication Technology Department Yao Yonghua situation
Telephone The Company's current
31 Mar. 2015 Institution Ping An Life Insurance Sui Haiqi
Communication situation
Chairman of the Board: Liu Shizhen
Lu Thai Textile Co., Ltd.
25 Apr. 2015
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