Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
Stock code: 000726, 200726 Stock name: Lu Thai A, Lu Thai B Announcement No.: 2016-019
Lu Thai Textile Co., Ltd.
Abstract of the Report for the First Quarter of 2016
1
Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
Section I Important Statements
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 Zibin, 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 2016 of Lu Thai Textile Co., Ltd.
Section II Financial Results and Changes in Shareholders
I Financial results
Whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting
policies or correction of accounting errors
□ Yes √ No
January-March
January-March 2016 +/-%
2015
Operating revenues (RMB) 1,282,806,624.05 1,428,557,406.74 -10.20%
Net profit attributable to shareholders of the Company
150,268,522.21 152,714,080.35 -1.60%
(RMB)
Net profit attributable to shareholders of the Company after
137,542,633.98 131,929,166.88 4.25%
deducting exceptional profit and loss (RMB)
Net operating cash flow (RMB) 183,258,282.60 -97,329,127.52 -288.29%
Basic earnings per share (RMB/share) 0.16 0.16 0.00%
Diluted earnings per share (RMB/share) 0.16 0.16 0.00%
Weighted average return on equity 2.15% 2.29% -0.14%
31 March 2016 31 December 2015 +/-%
Total assets (RMB) 9,059,317,160.04 9,091,170,499.22 -0.35%
Net assets attributable to shareholders of the Company
6,865,658,300.17 6,837,113,075.58 0.42%
(RMB)
Exceptional profit and loss
√ Applicable □ Not applicable
Unit: RMB
Item January-March 2016 Note
Profit/loss on disposal of non-current assets (including offset amount of asset impairment
-119,596.26
provisions)
Government grants charged to the profit/loss for the Reporting Period (except for the
government grants closely related to the business of the Company and given at a fixed quota 4,596,057.87
or amount in accordance with the State’s uniform 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 assets and
4,700,743.33
tradable financial liabilities and financial assets available for sales, except for effective
hedging related with normal businesses of the Company
Non-operating incomes and expenses other than the above 2,954,115.86
Less: Income tax effects -1,211,324.23
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
Minority interests effects (after tax) 616,756.80
Total 12,725,888.23 --
Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Profit and Loss,
or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss
□ Applicable √ Not applicable
No such cases in the Reporting Period.
II Total number of shareholders at the period-end and shareholdings of top ten shareholders
1. Numbers of common shareholders and preference shareholders with resumed voting rights as well as
shareholdings of top ten shareholders
Unit: share
Total number of common Total number of preference shareholders with
69,043 0
shareholders at the period-end resumed voting rights at the period-end (if any)
Shareholdings of top ten shareholders
Pledged or frozen
Shareholdi
Number of shares
Nature of ng Number of
Name of shareholder restricted shares Numbe
shareholder percentage shares held Status of
held r of
(%) shares
shares
Domestic
Zibo Lucheng Textile Investment Co., Ltd. non-state-owned 14.69% 140,353,583
corporation
Foreign
Tailun Textile Co., Ltd. 12.37% 118,232,400 118,232,400
corporation
State-owned
Central Huijin Investment Co., Ltd. 2.13% 20,315,300
corporation
Foreign
T.ROWE PRICE INTL DISCOVERY FUND 2.09% 19,948,219
corporation
CHINA SECURITIES FINANCE State-owned
1.64% 15,679,091
CORPORATION LIMITED corporation
Foreign
LYNAS ASIA FUND 1.51% 14,413,375
corporation
FIRST STATE INVESTMENTS
Foreign
ICVC-FIRST STATE GREATER CHINA 1.12% 10,714,368
corporation
GROWTH FUND
HUA AN NEW SILK ROAD THEME Domestic
1.06% 10,110,000
EQUITY SECURITIES INVESTMENT non-state-owned
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
FUND corporation
Foreign
VALUE PARTNERS CLASSIC FUND 0.85% 8,156,383
corporation
Foreign
First State China A Share Fund 0.82% 7,881,381
corporation
Shareholdings of top ten non-restricted shareholders
Number of non-restricted Variety of shares
Name of shareholder
shares held Variety Number
RMB common
Zibo Lucheng Textile Investment Co., Ltd. 140,353,583 140,353,583
shares
RMB common
Central Huijin Investment Co., Ltd. 20,315,300 20,315,300
shares
Domestically
T.ROWE PRICE INTL DISCOVERY FUND 19,948,219 listed foreign 19,948,219
shares
RMB common
CHINA SECURITIES FINANCE CORPORATION LIMITED 15,679,091 15,679,091
shares
Domestically
LYNAS ASIA FUND 14,413,375 listed foreign 14,413,375
shares
Domestically
FIRST STATE INVESTMENTS ICVC-FIRST STATE
10,714,368 listed foreign 10,714,368
GREATER CHINA GROWTH FUND
shares
HUA AN NEW SILK ROAD THEME EQUITY SECURITIES RMB common
10,110,000 10,110,000
INVESTMENT FUND shares
Domestically
VALUE PARTNERS CLASSIC FUND 8,156,383 listed foreign 8,156,383
shares
RMB common
First State China A Share Fund 7,881,381 7,881,381
shares
Domestically
HTHK-MANULIFE CHINA VALUE FUND 6,858,138 listed foreign 6,858,138
shares
Zibo Lucheng Textile Investment Co., Ltd. is the largest
shareholder of the Company and the actual controller. Tailun
(Thailand) Textile Co., Ltd. is the second largest shareholder as
Related or acting-in-concert parties among the above
well as sponsor of foreign capital of the Company. All of other
shareholders
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
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
shareholders.
Top ten common shareholders conducting securities margin
N/A
trading (if any)
Did any of the top ten common shareholders or the top ten non-restricted common shareholders of the Company conduct any
promissory repo during the Reporting Period?
□ Yea √ No
No such cases in the Reporting Period.
2. Total number of preference shareholders and shareholdings of the top ten of them
□ Applicable √ Not applicable
Section III Significant Events
I Changes in major accounting statement items and financial indicators for the Reporting
Period, as well as reasons for such changes
√ Applicable □ Not applicable
(1) Notes receivable stood at RMB87,564,218.01 on 31 March 2016, down 34.23% from the
opening amount, mainly because letters of credit became due.
(2) Interest receivable stood at RMB0.00 on 31 March 2016, down 100.00% from the opening
amount, mainly because savings became due and interest was collected.
(3) Other accounts receivable stood at RMB44,055,162.39 on 31 March 2016, down 37.79% from
the opening amount, mainly because export rebates were received.
(4) Engineering materials stood at RMB19,909,444.99 on 31 March 2016, up 215.03% from the
opening amount, mainly because equipment to be installed increased.
(5) Other non-current assets stood at RMB47,372,488.77 on 31 March 2016, up 37.30% from the
opening amount, mainly because prepayments for equipment increased.
(6) Financial liabilities measured at fair value with fair value changes charged to the current profit
and loss stood at RMB19,928,030.00 on 31 March 2016, down 57.32% from the opening amount,
mainly because financial liabilities became due and loss on the fair value changes decreased.
(7) Payroll payable stood at RMB181,404,630.78 on 31 March 2016, down 37.72% from the
opening amount, mainly because the year-end bonuses for employees for 2015 were paid in the
current period.
(8) Interest payable stood at RMB988,920.36 on 31 March 2016, down 46.60% from the opening
amount, mainly because interest payable decreased.
(9) Treasury shares stood at RMB131,096,061.14 on 31 March 2016, up 1029.09% from the
opening amount, mainly because repurchased shares increased.
(10) Asset impairment loss stood at RMB-870,101.65 for January-March 2016, down 175.08%
from the same period of last year, mainly because accounts receivable decreased.
(11) Profit on fair value changes stood at RMB21,750,839.63 for January-March 2016, up 281.23%
from the same period of last year, mainly because of the profit on fair value changes in due
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
financial liabilities and the fair value changes in the current period.
(12) Investment profit stood at RMB-17,050,096.30 for January-March 2016, down 225.14% from
the same period of last year, mainly because loss on investment in financial derivative instruments
increased.
(13) Non-operating income stood at RMB8,337,965.06 for January-March 2016, up 73.10% from
the same period of last year, mainly because governmental subsidies increased.
II Progress of significant events and analysis & explanations on their influence and solutions
√ Applicable □ Not applicable
On 5 August 2015, the Company held the 2015 1st Extraordinary General Meeting, which reviewed and approved the Proposal on
Repurchasing Part of the Share A and Share B of the Company, and had published the Report about Repurchasing Part of the Share A
and Share B of the Company on 10 October 2015 and as for the details of the above, please refer to the announcement of the
Company (No.: 2015-029) and the report about repurchasing the shares that respectively diclosed on www.cninfo.com.cn on 6
August 2015 and 10 October 2015. The Company began to execute the repurchase proposal since 10 November 2015 and up to 31
March 2016, the Company had accumulatively repurchased the Share B of 15,318,707 shares and as for the detailed situation, please
refer to the announcement of the Company (No.: 2016-016) that disclosed on www.cninfo.com.cn on 6 April 2016.
Index to the relevant announcement
Overview of the significant event Date of disclosure
disclosed on the website
On 5 August 2015, the Company held the Announcement on the Resolution of the
st
2015 1 Extraordinary General Meeting, 2015 1st Extraordinary General Meeting
6 Aug. 2015
which reviewed and approved the Proposal (No.: 2015-029), which disclosed on
on Repurchasing Part of the Share A and http://www.cninfo.com.cn
Share B of the Company, and had
Report about Repurchasing Part of the
published the Report about Repurchasing Share A and Share B of the Company,
Part of the Share A and Share B of the 10 Oct. 2015 which disclosed on
Company on 10 October 2015 and as for
http://www.cninfo.com.cn
the details of the above, please refer to the
Announcement on the Execution of
announcement of the Company (No.:
Repurchasing the Shares (No.: 2015-047),
2015-029) and the report about 11 Nov. 2015
which disclosed on
repurchasing the shares that respectively
http://www.cninfo.com.cn
diclosed on www.cninfo.com.cn on 6
August 2015 and 10 October 2015. The
Company began to execute the repurchase
proposal since 10 November 2015 and up
to 31 March 2016, the Company had Announcement on the Progress of
accumulatively repurchased the Share B of Repurchasing the Shares (No.: 2016-016),
6 Apr. 2016
15,318,707 shares and as for the detailed which disclosed on
situation, please refer to the announcement http://www.cninfo.com.cn
of the Company (No.: 2016-016) that
disclosed on www.cninfo.com.cn on 6
April 2016.
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
III Commitments of the Company, its shareholders, actual controller, acquirer, directors,
supervisors, senior management or other related parties fulfilled in the Reporting Period or
ongoing at the period-end
√ Applicable □ Not applicable
Date of
Commitment Type of Term of
Commitment Contents commitment Fulfillment
maker commitment commitment
making
Commitments made in share reform
Commitments made in acquisition
documents or shareholding alteration
documents
Commitments made in time of asset
restructuring
Commitments made in time of IPO or
refinancing
Commitments concerning stock
ownership incentive
The major
The biggest shareholder
shareholder Zibo Lucheng
Zibo Lucheng Textile
Textile Investment
Investment Co., Ltd. and
Co., Ltd. and the directors,
the directors, supervisors as
Zibo Lucheng
supervisors well as senior
Textile
and senior executives of
Investment
executives 10 Jul. 2015 which had not
Other commitments made to minority Co., Ltd. and Other
committed 10 Jul. 2015 to 10 Jan. decreased the
shareholders the directors, commitments
that the shares 2016 shareholding
supervisors
of the of the
and senior
Company held Company
executives
by them from 10 Jul.
would not be 2015 to 10
decreased Jan. 2016.
from 10 Jul. The
2015 to the commitment
future six had
months completed the
execution.
Executed on time Yes
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
Specific reasons for failing to fulfill
commitments on time and plans for N/A
next step
IV Operating result forecast for January-June 2016
Forecast of a possible deficit or considerable YoY change in the accumulative net profit made during the period from the beginning
of the year to the end of the next reporting period, as well as explanation of why:
□ Applicable √ Not applicable
V Securities investments
√ Applicable □ Not applicable
Variet Closin Sour
Opening
Code of Initial g
y of Name of Opening sharehol Closing Profit/loss in Accountin ce of
shareh Closing book
securitie investment cost number of ding number of
olding value (RMB)
the Reporting
securit securities shares held percenta shares held Period (RMB) g title secu
s (RMB) percen
ies ge rities
tage
Tradable
Buy-
Stock 01788 GTJA 27,521,014.00 12,100,000 0.17% 12,100,000 0.17% 27,425,569.60 financial
in
assets
Tradable
Buy-
Stock 02883 ZHYT 17,255,412.00 2,450,000 0.05% 3,000,000 0.06% 15,149,394.00 -1,294,179.90 financial
in
assets
Tradable
Buy-
Stock 00980 LHCS 12,625,586.00 3,839,000 0.34% 4,574,000 0.41% 10,138,627.77 -2,443,171.44 financial
in
assets
Tradable
Buy-
Stock 02006 JJJD 9,242,184.00 3,380,000 0.06% 3,380,000 0.06% 8,900,310.64 -309,820.94 financial
in
assets
Tradable
Buy-
Stock 00116 ZSS 3,964,789.00 40,000 0.01% 377,000 0.06% 3,675,602.97 -275,435.65 financial
in
assets
Tradable
Buy-
Stock 01666 TRTKJ 3,190,939.00 300,000 0.02% 300,000 0.02% 3,114,875.40 -64,997.40 financial
in
assets
Tradable
Buy-
Stock 200056 HTB 2,175,792.00 200,000 0.03% 200,000 0.03% 1,906,590.40 -261,656.20 financial
in
assets
Tradable
Buy-
Stock 00525 GSTL 2,750,680.00 850,000 0.01% 500,000 0.01% 1,387,444.50 -293,634.92 financial
in
assets
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
Tradable
Buy-
Stock 200053 SJDB 830,765.00 50,000 0.02% 50,000 0.02% 684,555.95 -143,327.60 financial
in
assets
Tradable
Buy-
Stock 200058 SSGB 468,272.00 100,000 0.01% 100,000 0.01% 484,147.30 17,499.30 financial
in
assets
Other securities investment
524,000.00 100,000 -- 100,000 -- 415,816.71 -20,831.92 -- --
held at the period-end
Total 80,549,433.00 23,409,000 -- 24,681,000 -- 73,282,935.24 -5,089,556.67 -- --
Disclosure date of the
announcement about the
board’s consent for the
securities investment
Disclosure date of the
announcement about the
general meeting’s consent
for the securities investment
(if any)
VI Investment in financial derivatives
√ Applicable □ Not applicable
Unit: RMB’0,000
Proporti
on of
closing
Amou investme
Relate Type
nt Impair nt Actual
d-part of Amount
Initial Opening purcha ment Closing amount gain/loss
Operat Relati y derivat Beginning Ending sold in
investment investment sed in provisi investment in the in
or on transac ive date date reporting
amount amount reporti on (if amount Compan reporting
tion or invest period
ng any) y’s period
not ment
period closing
net
assets
(%)
Forwa
Comm rd
Non-re 2015-01-2 2016-07-
ercial No exchan 79,386.21 79,386.21 18.35 28,157.11 0 51,247.45 7.01% -915.2
lated 6 18
bank ge
settle
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
ment
Comm Option
Non-re 2015-01-2 2016-07-
ercial No portfol 104,300 104,300 0 53,650 0 50,650 6.93% -782.55
lated 3 10
bank io
Total 183,686.21 -- -- 183,686.21 18.35 81,807.11 0 101,897.45 13.94% -1,697.75
Capital source for derivative
Own funds
investment
Lawsuit (if applicable) No lawsuits
Disclosure date of board
announcement on approval of 2015-04-25
derivative investment (if any)
Disclosure date of general
meeting announcement on
approval of derivative
investment (if any)
The Company conducted derivatives products transaction in order for hedging. And the forward settlement
hedging was operated by installments, with the relevant amount not more than the planned derivatives products
transactions. And all derivatives products transaction was zero-deposit. 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 concerning 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.
Risk analysis and risk control
Risk control measures: The Company carefully studied and mastered laws, regulations and policies relevant to
measures for derivative
derivative products transaction, formulated internal control rules for the forward settlement hedging business,
products held in reporting
standardized the operation procedures. And strengthened the compliant examination on derivative products
period (including but not
investment business, and strictly abided by relevant laws, regulations and the Company’s internal management
limited to market risk,
rules.
liquidity risk, credit risk,
2. Credit risk and liquidity risk:
operation risk, legal 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.
Risk control measures: the Company chose the powerful financial institutions with good reputation as the
counterparty, and signed standard derivative products transaction contract, as well as strictly controlled the
credit risk of counterparty. The Company conducted derivative investment transactions according to the
relevant approval procedure, which was in line with relevant laws, regulations, the Company’s Articles of
Association, the Management Rules for Derivative Investment of Lu Thai Textile Co., Ltd. and the Proposal on
the Plan of Lu Thai Textile Co., Ltd. for Derivative Transactions in 2015 approved at the 20th Session of the 7th
Board of Directors on 23 Apr. 2015, and performed relevant information disclosure responsibilities. The
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
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.
Risk control measures: 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:
Since the RMB exchange rate reform on 8 Nov. 2015, the reform towards a market-based RMB exchange rate
regime has stepped into a new stage. In the short run, there is some depreciation pressure on the RMB, but a
sharp depreciation is considered unlikely. In the long run, the positive economic fundamentals of China, the
large surplus of the current accounts and the faster globalization of the RMB will enable the RMB to remain a
strong currency. In the near future, the RMB exchange rate is expected to be more flexible with a distinct
feature of bidirectional volatility and stable within a rational and balanced range. The forward settlement of
exchange and the option business is important derivative product transactions of the Company, which was
significantly affected by the exchange rate fluctuation. 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 or option signed by the Company.
Risk control measures: Although a more flexible RMB exchange rate and the increased fluctuation range added
to the operation difficulty, it provided a certain opportunity. Therefore, the relevant personnel of the Company
will actively analyze market changes, 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 31 March 2016, the Company held 32 undue financial derivative product contracts, totaling USD179
million, including 17 forward settlement contracts worth USD81 million and 15 foreign exchange option
Changes in market prices or
contracts worth USD98 million (the latest expiration before July 2016). The financial derivative products
fair value of invested
above accounted for 13.94% of the closing net assets.
derivatives in reporting period
2. From January- March 2016, the due financial derivative products of the Company totally equaled to
(fair value analysis should
USD121 million, and the losses generated was RMB16.9775 million. To be specific, the due forward
include specific analysis
settlement was USD44.5 million, generating loss of RMB9.152 million; the due foreign exchange options
methods as well as relevant
equaled to USD76.5 million, of which USD50.5 million was delivered on time upon satisfaction of the
assumptions and parameters)
delivery conditions, generating loss of RMB7.8255 million, and USD26 million was undelivered due to
dissatisfaction of the delivery conditions.
Significant changes in the
Company’s accounting policy No significant changes
and specific accounting
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Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
principles for derivatives in
reporting period when
compared to last period
The Company’s independent directors Zhou Zhiji, Zhang Chengzhu, Wang Lei, Xu Jianjun and Zhao Yao,
concerning conducting derivatives business, have issued the following professional advice: We are of the
Specific opinion from opinion that it will strengthen the Company’s competitiveness to use derivative transactions with focus on
independent directors on the forward settlement and purchase as an effective tool to avoid foreign exchange risks, to strengthen the relevant
Company’s derivatives internal control and to carry out the loss and risk prevention measures so as to improve the operation and
investment and risk control management. In conducting derivative transactions with focus on forward settlement and purchase, the
Company follows a legal approval procedure, has sound relevant institutions and keeps the risks relatively
controllable. No harm has been done to the interests of the Company’s shareholders.
VII Visits paid to the Company in the Reporting Period for purposes of research,
communication, interview, etc.
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor Index to main inquiry information
2016-03-30 Telephone communication Institution The basic situation of the Company
VIII Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IX Occupation of the Company’s funds by the controlling shareholder or its related parties
for non-operating purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Chairman of the Board: Liu Zibin
Lu Thai Textile Co., Ltd.
27 April 2016
13