LUTHAI TEXTILE CO., LTD.

Transcription

1 LUTHAI TEXTILE CO., LTD. Report for the Third Quarter of 2014 October

2 Section I. Important Reminders The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of Luthai Textile Co., Ltd. (hereinafter referred to as the Company ) warrant that 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. 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. 2

3 Section II. Financial Highlights & Change of Shareholders I. Major accounting data and financial indexes 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 30 Sept Dec Increase/decrease (%) Total assets (RMB Yuan) 8,256,492, ,411,948, % Net assets attributable to shareholders of the Company (RMB Yuan) 6,341,390, ,988,054, % Jul.-Sept YoY increase/decrease (%) Jan.-Sept YoY increase/decrease (%) Operating revenues (RMB Yuan) 1,459,299, % 4,573,525, % Net profit attributable to shareholders of the Company (RMB Yuan) Net profit attributable to shareholders of the Company after extraordinary gains and losses (RMB Yuan) Net cash flows from operating activities (RMB Yuan) 233,259, % 710,139, % 195,503, % 671,500, % ,580, % Basic EPS (RMB Yuan/share) % % Diluted EPS (RMB Yuan/share) % % Weighted average ROE (%) 3.47% -1.23% 11.26% -1.12% Items and amounts of extraordinary gains and losses Applicable Inapplicable Unit: RMB Yuan Item Gains/losses on the disposal of non-current assets (including the offset part of asset 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 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 assets and tradable financial liabilities and financial assets available for sales, except for effective hedging related with normal businesses of the Company Amount as of Jan.-Sept , ,325, ,193, Note 3

4 Non-operating incomes and expenses other than the above 2,256, Less: Income tax effects 12,152, Minority interests effects (after tax) 426, Total 38,639, 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 There was no such situation of the Company during the reporting period. II. Total number of shareholders and shareholdings of the top ten shareholders at the period-end 1. Total number of common shareholders and shareholdings of the top ten common shareholders at the period-end Unit: share Total number of common shareholders at the period-end 85,803 Shareholdings of the top ten common shareholders Name of shareholder Nature of shareholder Shareholdi ng percentage (%) Number of the shares held Number of restricted shares held Pledged or frozen shares Status of Number of shares shares Domestic Zibo Lucheng Textile Investment Co., Ltd. Tailun Textile Co., Ltd. DBS VICKERS (HONG KONG) LTDA/C CLIENTS LYNAS ASIA FUND VALUE PARTNERS HIGH-DIVIDEND STOCKS FUNDS Zibo Lucheng Textile Investment Co., Ltd. non-state-owned corporation Foreign corporation Foreign corporation Foreign corporation Foreign corporation Domestic non-state-owned corporation 14.69% 140,353,583 Pledged 22,727, % 118,232, ,232, % 33,158, % 17,364, % 16,411, % 8,156,383 GUOTAI JUNAN Foreign 0.80% 7,621,346 4

5 SECURITIES(HONGKONG) LIMITED First State China A share fund HTHK-MANULIFE CHINA VALUE FUND BILL & MELINDA GATES FOUNDATION TRUST corporation Foreign corporation Foreign corporation Foreign corporation 0.79% 7,563, % 6,858, % 5,732,809 Shareholdings of the top ten non-restricted common shareholders Name of shareholder Number of non-restricted common shares held at the period-end Type Type of shares Number Zibo Lucheng Textile Investment Co., Ltd. RMB ordinary 140,353,583 share 140,353,583 Domestically DBS VICKERS (HONG KONG) LTD A/C CLIENTS 33,158,567 listed foreign share Domestically LYNAS ASIA FUND 17,364,475 listed foreign share Domestically VALUE PARTNERS HIGH-DIVIDEND STOCKS FUNDS 16,411,865 listed foreign share Domestically VALUE PARTNERS CLASSIC FUND 8,156,383 listed foreign share Domestically GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 7,621,346 listed foreign share 33,158,567 17,364,475 16,411,865 8,156,383 7,621,346 First State China A Share Fund RMB ordinary 7,563,611 share 7,563,611 Domestically HTHK-MANULIFE CHINA VALUE FUND 6,858,138 listed foreign share 6,858,138 BILL & MELINDA GATES FOUNDATION TRUST Pichon China A Share Investment Fund RMB ordinary 5,732,809 share RMB ordinary 5,586,151 share 5,732,809 5,586,151 Explanations about associated relationship or concerted action among the Zibo Lucheng Textile Investment Co., Ltd. is the 5

6 above shareholders largest shareholder of the Company and the actual controller. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder as well as sponsor of foreign capital of the Company. 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. Top ten non-restricted common shareholders taking part in margin financing Naught and securities lending (if any) Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company carry out any agreed buy-back in the reporting period? Yes No No shareholder of the Company carried out any agreed buy-back in the reporting period. 2. Total number of preferred share holders and shareholdings of the top ten preferred share holders at the period-end Applicable Inapplicable 6

7 Section III. Significant Events I. Major changes of main accounting statement items and financial indicators in the reporting period, as well as reasons for the changes Applicable Inapplicable 1. Monetary funds as at 30 Sept stood at RMB 537,907,586.72, down 38.35% from the year-beginning amount, mainly because raw materials were paid for. 2. Transactional financial assets as at 30 Sept stood at RMB 1,973,800.00, down 93.41% from the year-beginning amount, mainly because due transactional financial assets were delivered and their fair value changed. 3. Notes receivable as at 30 Sept stood at RMB 85,053,825.44, down 32.55% from the year-beginning amount, mainly because accounts receivable were collected. 4. Other non-current assets as at 30 Sept stood at RMB 8,485,764.14, down 75.06% from the year-beginning amount, mainly because the VAT input tax to be deducted decreased. 5. Engineering materials as at 30 Sept stood at RMB 234,437,779.64, up % from the year-beginning amount, mainly because the equipment to be installed increased. 6. Taxes and fares payable as at 30 Sept stood at RMB 39,039,228.56, down 66.13% from the year-beginning amount, mainly because the city maintenance and construction tax payable, the educational surtax payable, etc. decreased. 7. Interest payable as at 30 Sept stood at RMB 2,543,214.96, up 69.61% from the year-beginning amount, mainly because the interest provision increased as the borrowings of the Company (without subsidiaries) increased. 8. Non-current liabilities due within 1 year as at 30 Sept stood at RMB 27,455,391.71, down 67.83% from the year-beginning amount, mainly because the long-term borrowings due within 1 year decreased. 9. Deferred income tax liabilities as at 30 Sept stood at RMB 2,370,204.96, down 63.81% from the year-beginning amount, mainly because the taxable temporary difference arising from fair value changes of transactional financial assets decreased. 10. Financial expenses for Jan.-Sept stood at RMB 10,500,242.50, down 72.18% year on year, mainly because the exchange gains increased. 11. Asset impairment loss for Jan.-Sept stood at RMB -5,584,318.73, down % year on year, mainly because bad-debt provisions decreased as accounts receivable decreased. 12. Gains on fair value changes for Jan.-Sept stood at RMB -27,975,320.00, down % year on year, mainly because due transactional financial assets were disposed and the corresponding gains and losses on fair value changes formerly recognized were carried over, and the fair value of transactional financial assets changed. 13. Non-business expenses for Jan.-Sept stood at RMB 4,098,753.25, up 95.89% year on year, mainly because the loss on disposal of fixed assets increased. 7

8 II. Progress and influence of significant events, as well as the analysis and explanation on solutions Applicable Inapplicable 1. From 12 Dec to 31 Dec. 2013, through Securities Exchange System of Shenzhen Stock Exchange, Zibo Lucheng Textile Investment Co., Ltd. increased the current A share (000726) of the Company by centralized competitive trading method, which was of 6,913,189 shares, which were of 0.72% of the total share capital of the Company. From 1 Jan to 17 Jan. 2014, through Securities Exchange System of Shenzhen Stock Exchange, Zibo Lucheng Textile Investment Co., Ltd. increased the current A share (000726) of the Company by centralized competitive trading method, which was of 4,386,036 shares. Up to 17 Jan. 2014, through Securities Exchange System of Shenzhen Stock Exchange, Zibo Lucheng Textile Investment Co., Ltd. accumulatively increased the current A share (000726) of the Company by centralized competitive trading method, which was of 11,299,225 shares and were of 1.18% of the total share capital of the Company. After this time of shareholding increase, the company holds totally 134,613,925 shares of the company accounting for 14.03% of totally 955,800,496 shares of the company. For more details, please refer to the related announcements published on Security Times, Shanghai Security News, Ta Kung Pao and dated Jan. 18, On 4 Jun and 27 Jun. 2014, through Securities Exchange System of Shenzhen Stock Exchange, Zibo Lucheng Textile Investment Co., Ltd. accumulatively increased the current A share (000726) of the Company by centralized competitive trading method, which was of 5,739,658 shares that was of 0.60% of the total share capital of the Company. After the increase, the total stocks of the Company were of 140,353,583 shares that covered 14.68% of the total share capital of 955,800,496 shares. For the specific situation of the event, please refer to the relevant announcements disclosed on Securities Times, Shanghai Securities News, Ta Kung Pao and on 1 Jul On 11 Jun. 2014, the 11 th Session of the 7 th Board of Directors of the Company reviewed and approved the Proposal on Restricted Stock Granted to Previous Incentive Objects Who Fall through Incentive Requirements and Proposal on the Third Unlocking Period of 2011 Plan on Restricted Stock Incentive of Lu Thai Textile Co., Ltd.. The original incentive targets Gao Hong failed in the 2013 performance assessment, of whom the third unlocking restricted shares of 18,000 shares should not be locked and would be repurchased and written off by the Company; The original incentive targets Yang Jun, Wang Fuye, Yang Zezhi, Zhai Shenbo and Yang Jian had left their position during Aug to May 2014, which had not met with the incentive plan of No. 20 Unlocking Arrangement and Inspection Conditions of Restricted Stocks. Those 5 people had been granted the whole unlocking stocks which was amounted to 24,000 shares and had be repurchased and written off by the Company. The Company had completed the written off through Shenzhen Branch of CSDC on 26 Aug with the total share capital changed into 955,758,496 shares. For the specific situation of the event, please refer to the relevant announcement disclosed on Securities Times, Shanghai Securities News, Ta Kung Pao and on 28 Aug There were 332 people of the Company met with the conditions of the third period of the incentive plan, which amounted to 4,119,000 shares and had unlocked as well as listed and circulated on 10 Sep Please refer to the relevant announcement disclosed on Securities Times, Shanghai Securities News, Ta Kung Pao and on 5 Sep Overview of the significant event Date of disclosure Index to the relevant announcement disclosed on the website Through Securities Exchange System of Shenzhen Stock Exchange, the actual controlling shareholders accumulatively 18 Jan Jul

9 increased the current Luthai A share of the Company by centralized competitive trading method Purchasing and written off of the equity incentive restricted shares Unlocking and listing as well as circulating of the equity incentive restricted shares 28 Aug Sep III. Commitments made by the Company or any shareholder holding over 5% of the Company s shares in the reporting period or such commitments carried down into the reporting period Applicable Inapplicable Commitment Commitment maker Contents of commitment Date of commitment Period of commitment Execution Commitments made in a N/A N/A N/A N/A share reform Commitments made in N/A acquisition reports or report on changes in equity Commitments made at the time of assets reorganization N/A N/A Commitments at the time of initial public N/A N/A N/A issuance or re-financing 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 Other commitments Lu Thai made for medium and Textile Co., small shareholders of Ltd. the Company Investment project of raised funds 19 Dec complementing circulating funds of the company, project on production line of 10 million meters of high-end jacquard for female garments have already been fulfilled. On 18 Oct. 2011, the 3 rd temporary shareholders general 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 9

10 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. Whether commitments N/A were fulfilled in time N/A N/A N/A Specific reasons of unfinished fulfillment Yes and further plan Commitments made in a N/A share reform IV. Predict the 2014 annual operating results Warnings of possible loss or large-margin change of the accumulated net profit made during the period from the beginning of the year to the end of the next reporting period compared with the same period of the last year according to prediction, as well as explanations on the reasons Applicable Inapplicable V. Securities investment Applicable Inapplicable The Company was not involved in any securities investment of the reporting period. Shareholdings in other listed companies Applicable Inapplicable The Company did not have any shareholding in any other listed company in the reporting period. VI. Investments in derivatives Applicable Inapplicable Unit: RMB Ten Thousand Yuan Proportio n of the Operator Relatio n Relate d-part Type of y derivative transac investment tion or not Initial investment amount Beginning date Ending date Impairme Opening nt investmen provision t amount (if any) closing investmen Closing t amount investmen in the t amount Company s closing Actual gain/loss in reporting period net assets (%) 10

11 Forward Commerc ial bank Non-rel No ated settlement of 28 Mar. 185, Dec , , % 2, exchange Commerc ial bank Non-rel No ated Foreign exchange trading 26, Jan Dec , % Commerc ial bank Non-rel No ated Share option 31 Jun. 4, Dec , % Total 216, , , % 2, Capital source for derivative Self-owned funds of the Company investment Cases involving lawsuit (if N/A applicable) Disclosure date of the board announcement approving the 27 Mar derivative investment (if any) Disclosure date of the general meeting announcement approving the derivative investment (if any) Analysis on risks and 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 control government securities regulatory authorities, if there were no standard operation procedures measures of derivative products held and strict approval procedures, it was easy to cause compliant and regulatory risks existing in the reporting period (including but in the validity and feasibility of contract, commitments and other legal documents signed. not limited to market risk, liquidity Precautionary measures: The Company carefully studied and mastered laws, regulations and risk, credit risk, operation risk, law policies relevant to derivative products transaction, formulated internal control rules for the risk, etc.) 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 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 11

12 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 2013 approved at the 7 th Session of the 7 th Board of Directors on 25 Mar. 2014, 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 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 30 Sep. 2014, the Company held 8 undue financial derivative product contracts, values in the reporting period of the totaling US$ 33,523,600, of which the forward settlement of exchange was of US$ 23 invested derivatives. And the analysis million, the foreign exchange option of US$ 8 million and the forward foreign trading of on the fair value of the derivatives US$ 2,523,600 (the latest expiration before Dec. 2014). The above financial derivative should include the specific use products accounted for 3.09% of the closing net assets. methods and the relevant assumptions 2. From Jan to Sep. 2014, the due financial derivative products of the Company and parameters. totally equaled to US$ 314,951,000, all of which were delivered on time and generated a 12

13 gain of RMB 24,781,800. The due forward settlement was US$ million, all of which were delivered on time and generated a gain of RMB 24,576,700. The due forward foreign exchange trading amount equaled to US$ 40,351,000 million, all of which were delivered on time and generated a gain of RMB 205,100. Whether significant changes occurred to the Company s accounting policy and specific accounting principles of No significant change derivatives in the reporting period compared to the previous reporting period independent directors Zhou Zhiji, Zhang Chengzhu, Wang Lei, Xu Jianjun and Zhao Yao concerning conducting derivatives business, have issued the following professional advice: we were of the opinion that it would strengthen the Company s Specific opinion from independent competitiveness to use derivative transactions with focus on forward settlement and directors on the Company s purchase as an effective tool to avoid foreign exchange risks, to strengthen the relevant derivatives investment and risk internal control and to carry out the loss and risk prevention measures so as to improve the control 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. VII. Researches, visits and interviews received in the reporting period Applicable Inapplicable Main discussion Time Place Way of reception Visitor type Visitor and materials provided by the Company 13 Aug By phone Institution Everbright Securities Co., Ltd. Li Jie, Tang Shuangshuang 13 Aug By phone Institution Morgan Stanley Huaxin Fund Liu Hong 13 Aug By phone Institution Industrial Securities Huang Wei 13 Aug By phone Institution Rui Gu, Lu Jie 13 Aug By phone Institution Shanghai Chengshi Assets Dong Tao 13 Aug By phone Institution Centrum Capital Hu Binghan 13 Aug By phone Institution CCB International Zhan Jia 13

14 13 Aug By phone Institution Milestone Asset Weng Di 13 Aug By phone Institution Dan Shuiquan Liu Xiaoyu 13 Aug By phone Institution Taikang Asset Jin Ge 13 Aug By phone Institution Shenzhen Qing Shui Yuan Dai Qiubin 13 Aug By phone Institution Congrong Investment Cheng Chunyan 13 Aug By phone Institution UBS SDIC Li Yanrong 13 Aug By phone Institution China Post Fund Liu Xiaohan 13 Aug By phone Institution ChinaAMC Wang Zhipeng 13 Aug By phone Institution Yong An Insurance Wang Shuting 13 Aug By phone Institution China Universal Fund Xu Lijun 13 Aug By phone Institution SSGA-Fund Zhang Zhidong 13 Aug By phone Institution Shanghai Xiangming Investment Co.,Ltd. Li Dan 3 Sep Conference room of the Company Field research Institution Changjiang Securities Company Limited Leiyu 3 Sep Conference room of the Company Field research Institution Northeast Securities Co.,Ltd. Zhou Yubin VIII. Influence of the newly promulgated or amended accounting standards on our consolidated financial statements Applicable Inapplicable 1. According to the amended <Accounting Standard No. 2 for Business Enterprises Long-term Equity Investments>, we recorded long-term equity investments where we did not have control or joint control over or significant influence on and of which the fair value could not be measured reliably under the available-for-sale financial assets item as per the < Accounting Standard No. 22 for Business Enterprises Recognition and Measurement of Financial Instruments>. As such, our investments in Yantai Rongchang Pharmacy Co., Ltd., Gaoqing Hongqiao Thermoelectric Co., Ltd. and Zibo Chengshun Heating Power Co., Ltd. were restated as available-for-sale financial assets, and the year-beginning consolidated data were also restated adopting the retrospective adjustment method. The said restatement affected only the two statement items of available-for-sale financial assets and long-term equity 14

15 investments, not our total assets, net assets and current gains and losses. 2. According to the amended <Accounting Standard No. 30 for Business Enterprises Financial Statement Preparation>, we restated the foreign-currency statement translation difference under the other comprehensive incomes item, and the year-beginning consolidated amount was also restated. The said restatement affected only the two statement items of other comprehensive incomes and foreign-currency statement translation difference, not our total assets, net assets and current gains and losses. 3. According to the <Accounting Standard No. 9 for Business Enterprises Employees Compensation> amended in 2014, we divided the payroll payable into short-term emoluments, welfare after resignation, dismissal welfare and other long-term employees welfare. The amendment involved only division, but not affected the amount of the payroll payable. And particulars about the employees compensation were to be disclosed in the coming annual report. Apart from the above-mentioned, the amended accounting standards had no other influence on our financial situation, operating results and consolidated financial statements. Section IV. Financial Statements I. Financial statements 1. Consolidated balance sheet Prepared by Luthai Textile Co., Ltd. Unit: RMB Yuan Item Closing balance Opening balance Current Assets: Monetary funds 537,907, ,461, Financial assets measured at fair value and of which changes are recorded into current gains and losses 1,973, ,949, Notes receivable 85,053, ,106, Accounts receivable 213,015, ,434, Accounts paid in advance 127,381, ,003, Dividend receivable Other accounts receivable 53,793, ,608, Financial assets purchased under agreements to resell Inventories 1,633,917, ,645,070, Assets held for sale Non-current assets due within 1 year Other current assets 8,485, ,030, Total current assets 2,661,528, ,193,664, Non-current assets: 15

16 Loans by mandate and advances granted Available-for-sale financial assets 67,442, ,442, Held-to-maturity investments Long-term accounts receivable Long-term equity investment Fixed assets 4,569,302, ,454,201, Construction in progress 277,728, ,959, Engineering materials 234,437, ,094, Disposal of fixed assets Production biological assets 356,652, ,846, Oil-gas assets Goodwill 20,613, ,613, Long-term deferred expenses 2,075, ,711, Deferred income tax assets 53,930, ,158, Other non-current assets 12,781, ,255, Total of non-current assets 5,594,964, ,218,283, Total assets 8,256,492, ,411,948, Current liabilities: Short-term borrowings 511,596, ,664, Financial liabilities measured at fair value and of which changes are recorded into current gains and losses Notes payable 10,818, ,213, Accounts payable 292,422, ,053, Accounts received in advance 83,307, ,793, Employee s compensation payable 290,034, ,062, Tax payable 39,039, ,248, Interest payable 2,543, ,499, Dividend payable 441, , Other accounts payable 68,965, ,445, Non-current liabilities due within 1 year 27,455, ,356, Other current liabilities Total current liabilities 1,326,623, ,818,779, Non-current liabilities: Long-term borrowings 97,516, ,550,

17 Bonds payable Long-term payables 9,735, ,735, Specific payables Estimated liabilities Deferred income tax liabilities 2,370, ,550, Other non-current liabilities 65,917, ,733, Total non-current liabilities 175,539, ,569, Total liabilities 1,502,163, ,997,348, Owners equity (or shareholders equity) Paid-up capital (or share capital) 955,758, ,800, Capital reserves 1,006,826, ,000,854, Less: Treasury stock Specific reserves Other Comprehensive income -7,023, ,494, Surplus reserves 659,538, ,538, Provisions for general risks Retained profits 3,726,290, ,379,354, Total equity attributable to owners of the Company 6,341,390, ,988,054, Minority interests 412,938, ,545, Total owners (or shareholders ) equity 6,754,329, ,414,599, Total liabilities and owners (or shareholders ) equity 8,256,492, ,411,948, Legal representative: Liu Shizhen Chief of the accounting work: Zhang Hongmei Chief of the accounting organ: 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 361,218, ,709, Financial assets measured at fair value and of which changes are recorded into current gains and losses 1,973, ,057, Notes receivable 67,436, ,356, Accounts receivable 234,036, ,740, Accounts paid in advance 213,150, ,115,

18 Dividend receivable Other accounts receivable Financial assets purchased under agreements to resell 30,482, ,075, Inventories 1,111,203, ,892, Assets held for sale Non-current assets due within 1 year Other current assets 3,711, Total current assets 2,019,500, ,065,659, Non-current assets: Loans by mandate and advances granted 55,282, ,282, Available-for-sale financial assets Held-to-maturity investments Long-term accounts receivable 1,163,788, ,046,654, Long-term equity investment Fixed assets 2,776,855, ,652,488, Construction in progress 178,500, ,973, Engineering materials 232,711, ,040, Disposal of fixed assets Intangible assets 224,230, ,829, R&D expense Goodwill Long-term deferred expenses Deferred income tax assets 32,725, ,041, Other non-current assets 5,406, ,406, Total of non-current assets 4,669,500, ,220,716, Total assets 6,689,001, ,286,375, Current liabilities: Short-term borrowings 297,019, ,638, Financial liabilities measured at fair value and of which changes are recorded into current gains and losses Notes payable 5,257, ,474, Accounts payable 276,249, ,146, Accounts received in advance 43,704, ,413, Employee s compensation payable 234,194, ,548,

19 Tax payable 24,610, ,282, Interest payable 2,406, , Dividend payable 441, , Other accounts payable 18,245, ,956, Liabilities held for sale Non-current liabilities due within 1 year 27,455, ,356, Other current liabilities Total current liabilities 929,584, ,940, Non-current liabilities: Long-term borrowings 97,516, ,550, Bonds payable Long-term payables Specific payables Estimated liabilities Deferred income tax liabilities 296, ,758, Other non-current liabilities 30,638, ,144, Total non-current liabilities 128,450, ,453, Total liabilities 1,058,035, ,394, Owners equity (or shareholders equity) Paid-up capital (or share capital) 955,758, ,800, Capital reserves 1,013,179, ,007,207, Less: Treasury stock Specific reserves Other comprehensive income Surplus reserves 659,538, ,538, Provisions for general risks Retained profits 3,002,489, ,695,434, Total owners (or shareholders ) equity 5,630,966, ,317,981, Total liabilities and owners (or shareholders ) equity 6,689,001, ,286,375, Legal representative: Liu Shizhen Chief of the accounting work: Zhang Hongmei Chief of the accounting organ: Zhang Keming 3. Consolidated income statement for the reporting period Prepared by Luthai Textile Co., Ltd. Unit: RMB Yuan 19

20 Item Jul.-Sept Jul.-Sept I. Total operating revenues 1,459,299, ,578,162, Including: Sales income 1,459,299, ,578,162, II. Total operating cost 1,229,616, ,294,078, Including: Cost of sales 1,016,099, ,093,479, Interest expenses Handling charge and commission expenses Surrenders Net claims paid Net amount withdrawn for the insurance contract reserve Expenditure on policy dividends Reinsurance premium Taxes and associate charges 11,637, ,711, Selling and distribution expenses 38,911, ,667, Administrative expenses 160,259, ,495, Financial expenses 3,058, ,400, Asset impairment loss -348, , Add: Gain/(loss) from change in fair value ( - means loss) 3,023, ,243, Gain/(loss) from investment ( - means loss) 3,622, ,590, Including: share of profits in associates and joint ventures Foreign exchange gains ( - means loss) III. Business profit ( - means loss) 236,328, ,918, Add: non-operating income 38,684, ,983, Less: non-operating expense 1,003, ,208, Including: loss from non-current asset disposal 823, ,067, IV. Total profit ( - means loss) 274,009, ,693, Less: Income tax expense 39,474, ,436, V. Net profit ( - means loss) 234,534, ,257, Including: Net profit achieved by combined parties before the combinations Attributable to owners of the Company 233,259, ,965, Minority shareholders income 1,275, ,291, VI. Earnings per share (I) Basic earnings per share (II) Diluted earnings per share

21 VII. Other comprehensive incomes 474, , Including: Other comprehensive incomes items that cannot be reclassified as gains and losses in the subsequent accounting periods Other comprehensive incomes items that will be reclassified as gains and losses in the subsequent accounting periods as relevant requirements are met 474, , VIII. Total comprehensive incomes 235,008, ,023, Attributable to owners of the Company 233,733, ,732, Attributable to minority shareholders 1,275, ,291, Legal representative: Liu Shizhen Chief of the accounting work: Zhang Hongmei Chief of the accounting organ: Zhang Keming 4. Income statement of the Company for the reporting period Prepared by Luthai Textile Co., Ltd. Unit: RMB Yuan Item Jul.-Sept Jul.-Sept I. Total sales 1,146,630, ,233,216, Less: cost of sales 806,314, ,674, Business taxes and surcharges 7,586, ,470, Distribution expenses 17,703, ,945, Administrative expenses 114,683, ,905, Financial costs 31, ,077, Impairment loss 1,537, ,395, Add: gain/(loss) from change in fair value ( - means loss) 2,722, ,168, Gain/(loss) from investment ( - means loss) 63,208, , Including: income form investment on associates and joint ventures II. Business profit ( - means loss) 264,706, ,854, Add: non-business income 37,341, ,123, Less: non-business expense 388, ,137, Including: loss from non-current asset disposal 301, ,059, III. Total profit ( - means loss) 301,659, ,840, Less: income tax expense 29,849, ,737, IV. Net profit ( - means loss) 271,809, ,103, V. Earnings per share (I) Basic earnings per share (II) Diluted earnings per share

22 VI. Other comprehensive income Including: Other comprehensive incomes items that cannot be reclassified as gains and losses in the subsequent accounting periods Other comprehensive incomes items that will be reclassified as gains and losses in the subsequent accounting periods as relevant requirements are met VII. Total comprehensive income 271,809, ,103, Legal representative: Liu Shizhen Chief of the accounting work: Zhang Hongmei Chief of the accounting organ: Zhang Keming 5. Consolidated income statement for Jan.-Sept Prepared by Luthai Textile Co., Ltd. Unit: RMB Yuan Item Jan.-Sept Jan.-Sept I. Total operating revenues 4,573,525, ,638,658, Including: Sales income 4,573,525, ,638,658, Interest income Premium income Handling charge and commission income II. Total operating cost 3,781,257, ,874,437, Including: Cost of sales 3,153,949, ,278,054, Interest expenses Handling charge and commission expenses Surrenders Net claims paid Net amount withdrawn for the insurance contract reserve Expenditure on policy dividends Reinsurance premium Taxes and associate charges 35,180, ,446, Selling and distribution expenses 132,019, ,479, Administrative expenses 455,191, ,317, Financial expenses 10,500, ,737, Asset impairment loss -5,584, ,597, Add: Gain/(loss) from change in fair value ( - means loss) -27,975, ,524, Gain/(loss) from investment ( - means loss) 24,901, ,240, Including: share of profits in associates and joint ventures 22

23 Foreign exchange gains ( - means loss) III. Business profit ( - means loss) 789,194, ,985, Add: non-operating income 58,510, ,053, Less: non-operating expense 4,098, ,092, Including: loss from non-current asset disposal 2,878, ,189, IV. Total profit ( - means loss) 843,606, ,946, Less: Income tax expense 127,534, ,129, V. Net profit ( - means loss) 716,071, ,817, Including: Net profit achieved by combined parties before the combinations Attributable to owners of the Company 710,139, ,141, Minority shareholders income 5,931, ,675, VI. Earnings per share (I) Basic earnings per share (II) Diluted earnings per share VII. Other comprehensive incomes 470, ,046, Including: Other comprehensive incomes items that cannot be reclassified as gains and losses in the subsequent accounting periods Other comprehensive incomes items that will be reclassified as gains and losses in the subsequent accounting periods as relevant requirements are met 470, ,046, VIII. Total comprehensive incomes 716,542, ,770, Attributable to owners of the Company 710,610, ,095, Attributable to minority shareholders 5,931, ,675, Legal representative: Liu Shizhen Chief of the accounting work: Zhang Hongmei Chief of the accounting organ: Zhang Keming 6. Income statement of the Company for Jan.-Sept Prepared by Luthai Textile Co., Ltd. Unit: RMB Yuan Item Jan.-Sept Jan.-Sept I. Total sales 3,464,830, ,459,398, Less: cost of sales 2,403,442, ,464,801, Business taxes and surcharges 25,674, ,666, Distribution expenses 59,880, ,967, Administrative expenses 322,513, ,102,

24 Financial costs -4,693, ,691, Impairment loss 387, ,890, Add: gain/(loss) from change in fair value ( - means loss) -23,083, ,108, Gain/(loss) from investment ( - means loss) 81,329, ,672, Including: income form investment on associates and joint ventures II. Business profit ( - means loss) 715,871, ,059, Add: non-business income 53,629, ,634, Less: non-business expense 3,083, ,766, Including: loss from non-current asset disposal 2,354, ,147, III. Total profit ( - means loss) 766,417, ,927, Less: income tax expense 96,158, ,713, IV. Net profit ( - means loss) 670,259, ,213, V. Earnings per share (I) Basic earnings per share (II) Diluted earnings per share VI. Other comprehensive income Including: Other comprehensive incomes items that cannot be reclassified as gains and losses in the subsequent accounting periods Other comprehensive incomes items that will be reclassified as gains and losses in the subsequent accounting periods as relevant requirements are met VII. Total comprehensive income 670,259, ,213, Legal representative: Liu Shizhen Chief of the accounting work: Zhang Hongmei Chief of the accounting organ: Zhang Keming 7. Consolidated cash flow statement for Jan.-Sept Prepared by Luthai Textile Co., Ltd. Unit: RMB Yuan Item Jan.-Sept Jan.-Sept I. Cash flows from operating activities: Cash received from sale of commodities and rendering of service 4,739,038, ,677,517, Net increase of deposits from customers and dues from banks Net increase of loans from the central bank Net increase of funds borrowed from other financial institutions Cash received from premium of original insurance contracts 24

25 Net cash received from reinsurance business Net increase of deposits of policy holders and investment fund Net increase of disposal of tradable financial assets Cash received from interest, handling charges and commissions Net increase of intra-group borrowings Net increase of funds in repurchase business Tax refunds received 147,836, ,470, Other cash received relating to operating activities 77,348, ,886, Subtotal of cash inflows from operating activities 4,964,223, ,876,875, Cash paid for goods and services 2,615,548, ,733,786, Net increase of customer lendings and advances Net increase of funds deposited in the central bank and amount due from banks Cash for paying claims of the original insurance contracts Cash for paying interest, handling charges and commissions Cash for paying policy dividends Cash paid to and for employees 1,019,650, ,798, Various taxes paid 285,300, ,727, Other cash payment relating to operating activities 201,143, ,493, Subtotal of cash outflows from operating activities 4,121,643, ,978,805, Net cash flows from operating activities 842,580, ,069, II. Cash flows from investing activities: Cash received from withdrawal of investments Cash received from return on investments 120, Net cash received from disposal of fixed assets, intangible assets and other long-term assets 10,003, ,597, Net cash received from disposal of subsidiaries or other business units Other cash received relating to investing activities 30,237, ,643, Subtotal of cash inflows from investing activities 40,361, ,240, Cash paid to acquire fixed assets, intangible assets and other long-term assets 617,521, ,765, Cash paid for investment Net increase of pledged loans Net cash paid to acquire subsidiaries and other business units Other cash payments relating to investing activities 25

26 Subtotal of cash outflows from investing activities 617,521, ,765, Net cash flows from investing activities -577,159, ,525, III. Cash Flows from Financing Activities: Cash received from capital contributions 500, Including: Cash received from minority shareholder investments by subsidiaries Cash received from borrowings 875,003, ,692, Cash received from issuance of bonds Other cash received relating to financing activities 12,000, ,760, Subtotal of cash inflows from financing activities 887,503, ,024,453, Repayment of borrowings 1,071,424, ,319,051, Cash paid for interest expenses and distribution of dividends or profit 408,680, ,114, Including: dividends or profit paid by subsidiaries to minority shareholders Other cash payments relating to financing activities 37,633, ,785, Sub-total of cash outflows from financing activities 1,517,739, ,919,952, Net cash flows from financing activities -630,235, ,498, IV. Effect of foreign exchange rate changes on cash and cash equivalents 4,837, ,999, V. Net increase in cash and cash equivalents -359,976, ,954, Add: Opening balance of cash and cash equivalents 869,909, ,182, VI. Closing balance of cash and cash equivalents 509,932, ,227, Legal representative: Liu Shizhen Chief of the accounting work: Zhang Hongmei Chief of the accounting organ: Zhang Keming 8. Cash flow statement of the Company for Jan.-Sept Prepared by Luthai Textile Co., Ltd. Unit: RMB Yuan Item Jan.-Sept Jan.-Sept I. Cash flows from operating activities: Cash received from sale of commodities and rendering of service 3,510,456, ,425,325, Tax refunds received 116,413, ,499, Other cash received relating to operating activities 51,225, ,637, Subtotal of cash inflows from operating activities 3,678,095, ,540,461, Cash paid for goods and services 2,009,520, ,191,814, Cash paid to and for employees 770,902, ,156,

27 Various taxes paid 175,084, ,159, Other cash payment relating to operating activities 114,263, ,287, Subtotal of cash outflows from operating activities 3,069,770, ,088,417, Net cash flows from operating activities 608,324, ,044, 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 other long-term assets 9,663, ,504, Net cash received from disposal of subsidiaries or other business units Other cash received relating to investing activities 25,833, ,077, Subtotal of cash inflows from investing activities 35,497, ,582, Cash paid to acquire fixed assets, intangible assets and other long-term assets 477,924, ,433, Cash paid for investment 87,406, Net cash paid to acquire subsidiaries and other business units Other cash payments relating to investing activities 1,100, Subtotal of cash outflows from investing activities 565,331, ,533, Net cash flows from investing activities -529,833, ,951, III. Cash Flows from Financing Activities: Cash received from capital contributions Cash received from borrowings 308,716, ,371, Cash received from issuance of bonds Other cash received relating to financing activities 35,410, Subtotal of cash inflows from financing activities 308,716, ,782, Repayment of borrowings 158,232, ,748, Cash paid for interest expenses and distribution of dividends or profit 378,078, ,785, Other cash payments relating to financing activities 25,633, ,985, Sub-total of cash outflows from financing activities 561,945, ,043,519, Net cash flows from financing activities -253,229, ,737, IV. Effect of foreign exchange rate changes on cash and cash equivalents 4,824, , V. Net increase in cash and cash equivalents -169,913, ,314, Add: Opening balance of cash and cash equivalents 503,157, ,095, VI. Closing balance of cash and cash equivalents 333,244, ,781,