Lu Thai Textile Co., Ltd. Semi-annual Report 2016
LU THAI TEXTILE CO., LTD.
SEMI-ANNUAL REPORT 2016
August 2016
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
Section I Important Statements, Contents and Terms
The board of directors (the “Board”), the board of supervisors (the “Board of Supervisors”) as well
as the directors, supervisors and senior management of Lu Thai Textile Co., Ltd. (the “Company”)
hereby guarantee the factuality, accuracy and completeness of the contents of the Report, and shall
be jointly and severally liable for any false representation, misleading statements or material
omissions in the Report.
All the directors attended the board meeting for the review of the Report.
The Company plans not to distribute cash dividends or bonus shares or convert capital reserve into
share capital.
Liu Zibin, head of the Company, Zhang Hongmei, accounting head for the Report, and Zhang
Keming, head of the accounting organ (head of accounting), hereby guarantee that the Financial
Report carried in the Report is factual, accurate and complete.
The Report has been prepared in both Chinese and English. Should there be any discrepancies or
misunderstandings between the two versions, the Chinese version shall prevail.
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
Contents
Section I Important Statements, Contents and Terms ..............................................................................................................................2
Section II Corporate Profile .....................................................................................................................................................................5
Section III Highlights of Accounting Data and Financial Indicators .......................................................................................................7
Section IV Report by the Board of Directors ......................................................................................................................................... 10
Section VII Preference Shares ............................................................................................................................................................... 35
Section VIII Directors, Supervisors and Senior Management ............................................................................................................... 36
Section X Documents Available for Reference .................................................................................................................................... 153
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
Terms
Term Meaning
Issuer, Company, the Company Lu Thai Textile Co., Ltd.
The Board of Directors The Board of Directors of Lu Thai Textile Co., Ltd.
The Board of Supervisors The Board of Supervisors of Lu Thai Textile Co., Ltd.
CSRC China Securities Regulation Commission
RMB Renminbi
The Company Law The Company Law of the People’s Republic of China
The Securities Law The Securities Law of the People’s Republic of China
Reporting Period 1 January 2016-30 June 2016
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
Section II Corporate Profile
I Corporate information
Stock name Lu Thai A, Lu Thai B Stock code 000726, 200726
Changed stock name (if any) N/A
Stock exchange Shenzhen Stock Exchange
Company name in Chinese 鲁泰纺织股份有限公司
Abbr. (if any) 鲁泰纺织
Company name in English (if
LU THAI TEXTILE CO.，LTD
any)
Abbr. (if any) LTTC
Legal representative Liu Zibin
II Contact information
Board Secretary Securities Representative
Name Qin Guiling Zheng Weiyin, Li Kun
No. 81, Songling East Road, Zichuan No. 81, Songling East Road, Zichuan
Address
District, Zibo, Shandong, P.R.China District, Zibo, Shandong, P.R.China
Tel. 0533-5266188 0533-5285166
Fax 0533-5418805 0533-5418805
E-mail qinguiling@lttc.com.cn wyzheng@lttc.com.cn，likun@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 √ Not applicable
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 2015 Annual Report.
2. About information disclosure and the place where the Report is kept
Did any change occur to information disclosure media and the place where the Report is kept during the Reporting Period?
□ Applicable √ Not applicable
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the
Report and the location where the Report is placed did not change during the Reporting Period. The said information can be found in
the 2015 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the Reporting Period?
√ Applicable □ Not applicable
Registration Registration code of
Registration date Business license No. Organizational code
place taxation
Zibo
Opening registered Administration
2014-11-13 370300400002843 370302613281175 61328117-5
information for Industry &
Commerce
Zibo
Closing registered Administration
2015-12-07 91370300613281175K 91370300613281175K 91370300613281175K
information for Industry &
Commerce
Disclosure date of the
relevant announcement
(if any)
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
Section III Highlights of Accounting Data and Financial Indicators
I Major accounting data and financial indicators
Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year due to change in
accounting policies or correction of accounting errors
□ Yes √ No
Same period of last
Reporting Period +/- (%)
year
Operating revenues (RMB) 2,831,326,773.03 2,941,835,897.16 -3.76%
Net profit attributable to shareholders of the Company
344,641,184.73 344,521,516.72 0.03%
(RMB)
Net profit attributable to shareholders of the Company
333,236,862.51 308,604,457.41 7.98%
excluding exceptional profit and loss (RMB)
Net cash flows from operating activities (RMB) 563,407,347.43 362,304,624.13 55.51%
Basic earnings per share (RMB/share) 0.37 0.36 2.78%
Diluted earnings per share (RMB/share) 0.37 0.36 2.78%
Weighted average return on equity (%) 5.10% 5.10% 0.00%
As at the end of the As at the end of last
+/- (%)
Reporting Period year
Total assets (RMB) 9,021,235,390.97 9,091,170,499.22 -0.77%
Net assets attributable to shareholders of the Company
6,508,090,698.05 6,837,113,075.58 -4.81%
(RMB)
II Differences in accounting data under domestic and foreign accounting standards
1. Differences in the net profit and the net assets disclosed in the financial reports prepared under Chinese
and international accounting standards
√ Applicable □ Not applicable
Unit: RMB
Net profit attributable to shareholders of the Net assets attributable to shareholders of the
Company Company
Reporting Period Same period of last year Closing amount Opening amount
According to Chinese
344,641,184.73 344,521,516.72 6,508,090,698.05 6,837,113,075.58
accounting standards
Items and amounts adjusted according to international accounting standards
Impact on domestic
362,500.00 612,500.00 -691,500.00 -1,054,000.00
equipments tax credit
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
recognized as deferred income
under international accounting
standards
According to international
345,003,684.73 345,134,016.72 6,507,399,198.05 6,836,059,075.58
accounting standards
2. Differences in the net profit and the net assets disclosed in the financial reports prepared under Chinese
and foreign accounting standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
3. Reasons for the differences in accounting data under domestic and foreign accounting standards
√ Applicable □ Not applicable
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 Exceptional profit and loss
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Profit/loss on disposal of non-current assets (including offset asset impairment provisions) -5,183,811.95
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 or amount in 14,112,224.13
accordance with the State’s uniform standards)
Profit/loss on fair value changes of transactional financial assets and liabilities & investment
income from disposal of transactional financial assets and liabilities as well as financial assets
-2,694,651.82
available for sale, except for effective hedges related to normal business operations of the
Company
Non-operating revenue and expense other than the above 4,546,385.24
Less: Corporate income tax -2,743,698.15
Minority interests (after tax) 2,119,521.53
Total 11,404,322.22 --
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
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Lu Thai Textile Co., Ltd. Semi-annual Report 2016
Section IV Report by the Board of Directors
I Overview
In the first half of 2016, affected by the macro economic environment, the textile & apparel sector saw a slow recovery in
fundamentals and export with weak consumer demand. Under such circumstances, we continued to base ourselves on the reality of
the industry and the Company, deepen our excellent performance management model, promote our Lu Thai Production System
(LTPS) and proactively carry forward our global planning. Meanwhile, we accelerated the in-depth fusion of industrialization and
informatization, pushed forward innovation as a driving force and strengthened corporate culture improvement. As a result, we
managed to maintain a healthy and steady development trend.
For the Reporting Period, the Company achieved operating revenues of RMB2.831 billion, operating profit of RMB419 million, net
profit attributable to the shareholders of the Company of RMB345 million and net profit attributable to the shareholders of the
Company of RMB333 million after excluding the exceptional profit and loss, down 3.76%, up 2.87%, 0.03% and 7.98% respectively
from the same period of last year. No changes occurred to the main business, the main profit sources and structure of the Company.
During the Reporting Period, the Company was named as “2015 Top 20 Enterprises in Chinese Printing and Dyeing Industry” by
China Dyeing and Printing Industry Association, “Chinese Exports Quality and Safety Demonstration Enterprise” by State General
Administration of the People’s Republic of China for Quality Supervision and Inspection and Quarantine, “Top 100 Enterprises in
Chinese Garment Industry in 2015” by China National Garment Association, “The Province's Trade Union Labor Protection
Demonstration Enterprise in Light Textile Industry” by Shandong Province Light Textile Industrial Trade Union Committee. “Lu
Thai” trademark was rated as a famous brand of Shandong Province by Administration for Industry and Commerce of Shandong
Province. Lu Thai Group was selected as China Cotton Textile Association top 100 enterprises of the main business revenues in
cotton textile industry in 2015 (fourth place), and top 10 enterprises of main business revenues in yarn-dyed fabric industry (first).
During the Reporting Period, the Company continually carried out scientific research and innovation, constantly developed new
technologies and processes, increased customer promotion and service, made researches on customized service for each key customer
in domestic and foreign markets, and regularly organized new product order meeting and review meeting, and also held new product
design and development seminars with business segments and brand promotion centers from time to time. With the end-market’s
continuously increased demand for leisure products, the Company utilized advantage resources to intensify the development of jeans,
casual washing products, and market acceptance and customer recognition substantially increased. During the Reporting Period, 28
patents were declared and accepted, of which 23 patents were authorized. The Company also participated in enacting 1 industry
standard. Up to now, it altogether won 44 prizes in the national and provincial level, including 1 first prize and 2 second prizes of
National Scientific and Technological Awards and 8 first prizes at the provincial stage. 341 patents were applied and accepted, of
which 234 were authorized; the Company also participated in or took charge of enacting 29 standards.
The Company popularizes the results of market services upgrading year to enhance the brand influence. The Company took full
advantage of its Milan Office in Italy and the subsidiary in America to internationalize its creativity and design, established
communication mechanism with strategic customers, and participated in the pre-trend planning actively and offered extended design
services. The Company established a direct connection with designers of key customers through the market promotion conferences
convened in Britain, Turkey, and continued to strengthen communication with designers of key customers in America and Asia so as
to promote closer cooperation between the two sides and to recommend natural fiber series of new products to customers. Through
New York and Milan promotion conferences and Shanghai fabric promotion conferences, it communicated adequately with
customers of OXFORD, TAG, TMW, SEIDENSTICKER United States, Itochu, PVH and so on, and maintained a good relationship
of cooperation. During Reporting Period, the Company designed 1568 patterns for key customers, provided 7368 colors, and
completed the 2017 spring and summer trend of design including a total of
