The 2015 Annual Report of Lu Thai Textile Co., Ltd. LU THAI TEXTILE CO., LTD.
THE 2015 ANNUAL REPORT
March 2016
The 2015 Annual Report of Lu Thai Textile Co., Ltd. Section I Important Statements, Contents& Terms
The Board of Directors, the Supervisory Committee as well as the directors, supervisors and senior management staff of Lu Thai Textile Co., Ltd. (hereinafter referred to as the “Company”) warrant that this Report is factual, accurate and complete without any false information, misleading statements or material omissions. And they shall be jointly and severally liable for that.
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 Report enclosed in this Report is factual, accurate and complete.
Except for the following directors, all the other directors attended in person the board meeting for the review of this Report.
|||||
|-|-|-|-|
|||Reason for not attending in||
|Name|Office title||Proxy|
|||person||
|Wang Lei|Independent Director|For reason of work|Zhou Zhiji|
|Xu Jianjun|Independent Director|For reason of work|Zhao Yao|

The Company has described in detail in this Report the possible risks. Please refer to the contents about the major risks and countermeasures in “Outlook of theCompany’s future development” in “Section IV Discussion& Analysis by the Management” of this Report. Securities Times, Shanghai Securities News, China Securities Journal, Ta Kung Pao (HK) and www.cninfo.com.cn have been designated by the Company for its information disclosure in 2016. And all information about the Company shall be subject towhat’s disclosed on the aforesaid media. Investors are kindly reminded to pay attention to investment risks.
TheCompany’s preliminary plan for profit distribution upon review and approval at the board meeting: Based on the total shares of 954,407,896, a cash dividend of RMB5 (tax included) will be distributed to all the shareholders for every 10 shares that they hold. No bonus shares will be granted and no capital reserves will be turned into share capital.
This Report is prepared in both Chinese and English. Should there be any understanding discrepancy between the two versions, the Chinese version shall prevail.
The 2015 Annual Report of Lu Thai Textile Co., Ltd. Contents
Section I Important Statements, Contents& Terms ....................................................................... 2 Section II Company Profile& Financial Highlights ....................................................................... 5 Section III Business Profile ............................................................................................................... 9 Section IV Discussion& Analysis by the Management ................................................................ 12 Section V Significant Events ........................................................................................................... 30 Section VI Changes in Shares& Shareholders ............................................................................. 41 Section VII Preference Shares......................................................................................................... 48 Section VIII Directors, Supervisors, Senior Management Staff& Employees .......................... 49 Section IX Corporate Governance ................................................................................................. 63 Section X Financial Report ............................................................................................................. 72 Section XI Documents Available for Reference ........................................................................... 222
The 2015 Annual Report of Lu Thai Textile Co., Ltd. Terms
|||
|-|-|
|Term|Specific 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 Supervisory Committee|The Supervisory Committee of Lu Thai Textile Co., Ltd.|
|CSRC|China Securities Regulation Commission|
|Yuan, Ten thousand|RMB Yuan, RMB Ten thousand|
|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 Jan. 2015-31 Dec. 2015|

The 2015 Annual Report of Lu Thai Textile Co., Ltd. Section II Company Profile& Financial Highlights
I. Basic information of the Company
|||||
|-|-|-|-|
|Stock abbr.|Lu Thai A, Lu Thai B|Stock code|000726, 200726|
|Stock abbr. after change (if any)|No changes|||
|Stock exchange|Shenzhen Stock Exchange|||
|Company name in Chinese|鲁泰纺织股份有限公司|||
|Abbr. of Company name in Chinese|鲁泰纺织|||
|Company name in English (if any)|LU THAI TEXTILE CO., LTD|||
|Abbr. of Company name in English (if any)|LTTC|||
|Legal representative|Liu Zibin|||
||No. 11, Mingbo Road, High-tech Industry Development Zone, Zibo, Shandong,|||
|Registered address||||
||P.R.China|||
|Zip code|255086|||
||No. 81, Songling East Road, Zichuan District, Zibo, Shandong, P.R.China; No. 11,|||
|Office address||||
||Mingbo Road, High-tech Industry Development Zone, Zibo, Shandong, P.R.China|||
|Zip code|255100; 255086|||
|Company website|www.lttc.com.cn|||
|Email address|lttc@lttc.com.cn|||

II. Contact information
||||
|-|-|-|
||Company Secretary|Securities Affairs Representative|
|Name|Qin Guiling|Zheng Weiyin|
||No. 81, Songling East Road, Zichuan District, Zibo,|No. 81, Songling East Road, Zichuan District, Zibo,|
|Contact address|||
||Shandong, P.R.China|Shandong, P.R.China|
|Tel.|0533-5266188|0533-5285166|
|Fax|0533-5418805；5282188-234|0533-5418805|
|E-mail address|qinguiling@lttc.com.cn|wyzheng@lttc.com.cn|

III. About information disclosure and where this Report is placed
|||
|-|-|
|Newspapers designated by the Company for|Securities Times, Shanghai Securities News, China Securities Journal and|
|information disclosure|Ta Kung Pao (HK)|
|Internet website designated by CSRC for disclosing|www.cninfo.com.cn|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
|this Report||
|Where this Report is placed|The Securities Department of the Company|

IV. Changes in the registered information
|||
|-|-|
|Organizational code|91370300613281175K|
|Changes in main business since listing (if any)|No changes|
|Changes of controlling shareholder (if any)|No changes|

V. Other information
The CPAs firm hired by the Company
|||
|-|-|
|Name|Ruihua Certified Public Accountants LLP|
||5-11F, West Tower, China Overseas Property Plaza, Block No. 7, Compound No. 8, Xibinhe|
|Office address||
||Road, Yongdingmen, Dongcheng District, Beijing, P.R.C.|
|Signing accountants|He Feng, Cui Xiaoli|

Sponsor engaged by the Company to conduct consistent supervision during the reporting period
□ Applicable√ Inapplicable
Financial consultant engaged by the Company to conduct consistent supervision during the reporting period
□ Applicable√ Inapplicable
VI. Accounting and financial highlights
Does the Company adjust retrospectively or restate the accounting data of previous years due to changes in the accounting policy or correction of accounting errors?
□ Yes√ No
||||||
|-|-|-|-|-|
||||Increase/decrease of current||
||2015|2014||2013|
||||year over last year||
|Operating revenues (RMB Yuan)|6,173,322,778.61|6,169,688,792.53|0.06%|6,478,245,029.16|
|Net profits attributable to shareholders of|712,193,243.19|958,725,402.84|||
||||-25.71%|999,256,730.65|
|the Company (RMB Yuan)|||||
|Net profits attributable to shareholders of|||||
||718,263,125.89|876,095,180.42|-18.02%|929,001,764.94|
|the Company after extraordinary gains and|||||
|losses (RMB Yuan)|||||
|Net cash flows from operating activities|1,027,595,404.34|1,112,095,349.02|||
||||-7.6%|1,453,925,021.59|
|(RMB Yuan)|||||
|Basic EPS (RMB Yuan/share)|0.750|1.000|-25.00%|1.04|
|Diluted EPS (RMB Yuan/share)|0.750|1.000|-25.00%|1.04|
|Weighted average ROE (%)|10.66%|15.39%|-4.73%|17.90%|
||As at 31 Dec.|As at 31 Dec.|Increase/decrease of current|As at 31 Dec.|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
||2015|2014|year-end than last year-end|2013|
|Total assets (RMB Yuan)|9,091,170,499.22|8,627,671,393.88|5.37%|8,411,948,561.49|
|Net assets attributable to shareholders of the|6,837,113,075.58|6,588,772,245.55|||
||||3.77%|5,988,054,133.73|
|Company (RMB Yuan)|||||

VII. Differences of the accounting data under the domestic and the overseas accounting standards
1. Differences of the net profits and the net assets disclosed in the financial reports prepared under the international and the Chinese accounting standards
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Net profits attributable to shareholders of the||Net assets attributable to shareholders of the||
||Company||Company||
||2015|2014|Closing amount|Opening amount|
|According to Chinese accounting|712,193,243.19|958,725,402.84|6,837,113,075.58|6,588,772,245.55|
|standards|||||
|Items and amounts adjusted according to international accounting standards|||||
|Impact on domestic equipment tax|||||
|credit recognized as deferred|||||
||1,015,000.00|1,225,000.00|-1,054,000.00|-2,069,000.00|
|income under international|||||
|accounting standards|||||
|According to international|713,208,243.19|959,950,402.84|6,836,059,075.58|6,586,703,245.55|
|accounting standards|||||

2. Differences of the net profits and the net assets disclosed in the financial reports prepared under the overseas and the Chinese accounting standards
□ Applicable√ Inapplicable
No such differences for the reporting period
3. Reason for any differences in the accounting data under the domestic and the overseas accounting standards
√ Applicable□ Inapplicable
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.
The 2015 Annual Report of Lu Thai Textile Co., Ltd. VIII. Financial highlights by quarter
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Q1|Q2|Q3|Q4|
|Operating revenues|1,428,557,406.74|1,513,278,490.42|1,569,500,236.21|1,661,986,645.24|
|Net profits attributable to|||||
||152,714,080.35|191,807,436.37|204,342,167.24|163,329,559.23|
|shareholders of the Company|||||
|Net profits attributable to|||||
||131,929,166.88|176,675,290.53|188,913,906.19|220,744,762.29|
|shareholders of the Company after|||||
|extraordinary gains and losses|||||
|Net cash flows from operating|||||
||-97,329,127.52|457,602,609.70|473,236,649.61|194,085,272.55|
|activities|||||

Any material differences between the financial indicators above or their summations and those which have been disclosed in quarterly or semi-annual reports?
□ Yes√ No
IX. Extraordinary gains and losses
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|2015|2014|2013|Note|
|Gains/losses on disposal of non-current assets (including offset part of|-4,666,157.56||||
|||-3,316,012.55|432,380.47||
|asset impairment provisions)|||||
|Government grants recognized in current period, except for those|43,266,788.43||||
|acquired in ordinary course of business or granted at certain quotas or||99,126,878.52|51,990,074.84||
|amounts according to government’s unified standards|||||
|Gains and losses on change in fair value from tradable financial assets|-29,145,915.85||||
|and tradable financial liabilities, as well as investment income from|||||
|disposal of tradable financial assets and tradable financial liabilities and||-5,319,435.30|33,746,810.30||
|financial assets available for sales except for effective hedging related|||||
|with normal businesses of the Company|||||
|Non-operating income and expense other than above|3,432,535.47|21,173,199.30|1,991,154.72||
|Less: Income tax effects|12,302,309.25|22,913,850.04|12,701,157.60||
|Minority interests effects (after tax)|6,654,823.94|6,120,557.51|5,204,297.02||
|Total|-6,069,882.70|82,630,222.42|70,254,965.71|--|

 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 thePublic—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.
The 2015 Annual Report of Lu Thai Textile Co., Ltd. Section III Business Profile
I. Main business during the reporting period
(I) Lu Thai, unremittingly taking “creating wealth, contributing to the society, clothing the country and boosting the development of the world” as its mission, has been practicing the value of “people foremost policy, rigorous scientific attitude, client oriented principle and integrity for win-win outcome” for a long time. It is devoted to improving and expanding its industrial chain, making it a renowned textile and garment business group combing cotton breeding, spinning, bleaching and dyeing, neatening, testing, garment making and marketing. Lu Thai produces and sells middle and high-grade yarn-dyed fabric and dyeing fabric for shirts and garment. It claimed its fame for its comprehensive management,R&D ability, advanced technology, international development plan and stable quality. Moreover, it also attaches great importance to improve the added value of its products, explore the emerging market and renew its service philosophy. With natural fabric as its flagship, multi-component functional fiber fabric as its spearhead and wash-and-wear non-ironing technology as its core competency, the company kept a watchful eye on the latest consumption trend. Great attention was paid to improve its healthy product series so as to satisfy the needs from the diversified and personalized market. (II) At the current stage, the textile industry of China is encircled by transnational development and is gaining its strength to be become mature. Lu Thai had already become the largest world renowned manufacturer for high-grade yarn dyed fabric and premium-brand shirts. It had paved its development pattern featured in going green, low-carbon growth, science and technology and humanism. Its operation performance was always among the top comparing to its peers.80% of LuThai’s products were exported over 30 countries and regions in the world, including America, EU and Japan. The export percentage for high-grade yarn dyed fabric--a self-owned brand attained70% of its export volume, accounting for18% of theworld’s export market share.
II. Significant changes in the main assets
1. Significant changes in the main assets
|||
|-|-|
|Main asset|Reason for any significant change|
||RMB205,094,029.50 as at 31 Dec. 2015, up 65.95% from opening amount, mainly|
|Construction in progress|because of new inputs to Lu Thai (Burma) Garment project and Lu Thai (Vietnam)|
||Yarn-Dyed Fabric project|

2. Main assets overseas
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Control||||
||||||||In the|Major|
|||||Operating|measures to||||
|Asset|Formation|Asset size|Location|||Earnings|Company’s|impairment|
|||||model|ensure asset||||
||||||||net assets (%)|risk|
||||||safety||||
|Lu Thai|Incorporated|180,789,341.|Hong Kong|Marketing|Main||2.48%|No|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|(Hong Kong)||72|||management|-16,409,743.2|||
|Textile Co.,|||||personnel|3|||
|Ltd.|||||sent by the||||
||||||Company||||
||||||Main||||
|Lu Thai|||||||||
||||||management||||
|(America)|||||||||
||Incorporated|3,378,019.21|New York|Marketing|personnel|-1,323,176.68|0.05%|No|
|Textile Co.,|||||||||
||||||sent by the||||
|Ltd.|||||||||
||||||Company||||
||||||Main||||
|Lu Thai|||||||||
||||||management||||
|(Cambodia)||126,607,849.|||||||
||Incorporated||Svay Rieng|OEM|personnel|-3,635,621.46|1.74%|No|
|Textile Co.,||74|||||||
||||||sent by the||||
|Ltd.|||||||||
||||||Company||||
||||||Main||||
|Lu Thai|||||||||
||||||management||||
|(Burma)||64,795,506.1|||||||
||Incorporated||Rangoon|OEM|personnel|-2,179,265.92|0.89%|No|
|Textile Co.,||6|||||||
||||||sent by the||||
|Ltd.|||||||||
||||||Company||||
||||||Main||||
|Lu Thai|||||||||
||||||management||||
|(Vietnam)||220,124,832.||||-11,603,294.8|||
||Incorporated||Tay Ninh|OEM|personnel||3.03%|No|
|Textile Co.,||04||||4|||
||||||sent by the||||
|Ltd.|||||||||
||||||Company||||

III. Core competitiveness analysis
The comprehensive management ability, research and development ability, technological accumulation and global planning of theCompany’s whole industry chain are the Company's core competitiveness, which did not change during the reporting period. 1. A complete industrial chain and a global network: The Company boasts a complete industrial chain from cotton planting, yarning, dyeing, weaving and post-processing to cloth manufacturing, and thus enjoys the cost advantage brought by complete steps for producing high-end dyed textile. The Company has set up production bases in Cambodia, Burma, Vietnam, etc., a design agency in Italy and a market service agency in America, which helps give full play to its international resources, form a global business network and solidify its internationally leading position as a yarn-dyed fabric maker.
2. The sound comprehensive management capacity and an efficient quality control system: The Company has passed ISO9000 quality management system, ISO14000 environmental management system, OHSAS18000 occupational health safety management system, and SA8000 social accountability management system successively from 1995. Ever since 2007, the Company has also passed WRAP: 1999 global garment production social accountability standard, C-TPAT: 2004 anti-terrorism standard, OE100 and GOTS organic cotton system certification and CNAS national laboratory recognition, to realize the internationalization and standardization of theCompany’s management. In order to pursue the operational management of performance excellence and better
theCompany’s performance and capability, the Company has gradually introduced GB/T19580-2004 -Standards for Performance
Excellence Evaluation, created “Great Quality” system and promoted management innovation, to ensure theCompany’s business
quality.
The 2015 Annual Report of Lu Thai Textile Co., Ltd. 3. It enjoyed strongR&D capability and high-end technological platform for cooperation. The company highly valued self-dependent innovation and made full use of various technology platforms, inclusive of the National Enterprise Technical Center, National Talent-indraught Demonstration Base and Shandong Engineering and Technological Research Center. Moreover, Lu Thai also reinforced its technical cooperation with scientific research institutes, colleges and universities, strategic clines and major suppliers. It was committed to cutting-edge technical research, and transformed itself from product development to technical researches step by step.What’s more, the company also upgraded itself from overcoming key technological difficulties to master technical principles and set up industrial standards. In the past, it only focused on technical innovation, but now, it is exploring new technology on one hand and boosting innovation on the other for better growth. Consequently, the company pushed forward its development in a green, low-carbon and cyclic manner and strengthened its vitality and growing momentum. Meanwhile, the share of technology to its development was also increased, which could push forward industrial upgradation.
4. It boasted considerate and efficientcustomer’s service. With customer-oriented principle as its guidance, the company comprehensively enhanced its quality control so as to persistently provide high standard service and set up an industry-leading brand image, which, in return, could help to wincustomer’s satisfaction and market recognition. Quality awareness was weaved into every step of the manufacturing process and the impeccable quality traceability ensured product reputation. Objective analysis and thinking in thecustomer’s perspective was thecompany’s service rule, which also helped to win thecustomers’ trust.
The 2015 Annual Report of Lu Thai Textile Co., Ltd. Section IV Discussion& Analysis by the Management
I. Summary
In 2015, the textile industry faced a complicated external situation characteristic of weak market demand, rising costs of production factors and a significant cutdown in the cotton import quota. These unfavorable factors further brought up the production costs of enterprises and weakened the competitiveness in export. Meanwhile, the textile and garment processing industries in Southeast Asia rose quickly. The Company felt the double pressures from the market and costs. Under the circumstances, the Company, based on its actual situation and that of the industry, continued to deepen the excellent performance management model, vigorously promoted the Lu Thai Production System (LTPS), proactively implemented its global planning, accelerated the industrial and informatization fusion, pushed forward innovation and enhanced corporate culture improvement. As such, the Company managed to maintain a healthy and steady development trend.
For the reporting period, the Company achieved operating revenues of RMB6.173 billion, operating profits of RMB841 million, net profits of RMB712 million attributable to shareholders of the Company, and net profits of RMB718 million after deducting non-recurring gains and losses, up by0.06%,-19.09%,-25.71% and-18.02% respectively as compared with last year. During the reporting period, the main business and profit sources of the Company, as well as their composition, remained unchanged.
During the reporting period, substantial promotion had been made in its internationalization layout, management upgradation, innovation-driven development and qualified service. In 2015, the company won the title of “Pilot Enterprise for Informationalization Reform of the Textile Industry”, and successively claimed the fame as the “Five-star Enterprise” who had fulfilled its social responsibility, “National Demonstration Zone for Enterprise Cultural Construction”, “National Benchmarking Enterprise for Quality and Integrity”, “Demonstration Enterprise for International Layout” and “National Demonstration Enterprise for Technical Innovation”. It sought its way to go abroad to improve its global layout. With the development of global resource integration getting momentum with each passing day, the Chinese textile industry goes abroad is an inevitable trend. In order to give full play to the technology and brand in dyed textile and shirt processing, the company effectively integrated advantageous resources at home and abroad, efficiently avoided the impacts of potential trade barriers, attained overall international industrial layout and maintained thecompany’s leading position in global dyed textile industry. In 2014, the Company successively established Lu Thai (Milan) Office, Lu Thai (America) Co., Ltd., Lu Thai (Cambodia) Company, Lu Thai (Myanmar) Company and Lu Thai (Vietnam) Company. By doing so, the company was able to compete fairly in product design, market information gathering, after-sales service and product manufacturing. During the report period, the 2nd stage of Lu Thai (Cambodia) Company was put into production successfully and now is under operation, and the Lu Thai (Myanmar) Company was also on its production phase. The 1st stage spinning production line of the Vietnam yarn-dyed fabric totaled 30,000 spindles, which had been officially put into production at the end of the reporting period. The weaving project and production line arrangement are being handled orderly and it is expected to put into production in the second half year of 2016.What’s more, the production line for shirts in Vietnam is under construction according to the plan. Lu Thai implemented supreme performance management to improve its production mode (LTPS). The company continuously took the market as its guidance and qualified service as its center to optimize theR&D process. With integrated resources, the company managed to provide one-to-one service for strategic clients to win their credibility. Besides, it pushed forward the supreme performance management broadly for the sake of improving its production mode and polishing the management in a scientific and systemic manner. By doing so, thecompany’s system was enhanced, working process was standardized and internal control was improved. During the reporting period, it passed the management system certification for Integrating IT application with Industrialization. Its subsidiaries passed the ISO 9000 QMSC and BIC Fine Cotton Planting Certificate. Moreover, Lufeng Weaving Dye Company and Lu Thai (Cambodia) Company passed the SA8000 Social Responsibility Certificate successively, which pushed
The 2015 Annual Report of Lu Thai Textile Co., Ltd. its management to a higher level. Great attention was paid to employee relation management, quality training and “craftsmanship” spirit cultivation. 10 outstanding staff was selected to group a talent pool in the 1st “Lu Thai Golden Craftman” campaign. The company also created platforms for the development of its working staff, through which, their mental health and stability could be maintained. By integrating resources from the supply chain and unremittingly polishing its quality, Lu Thai had made great achievements in shortening production period, reducing product inventory and improving first pass yield (FPY) through oneyear’s hard work.
Lu Thai gave full play toR&D and implemented the innovation-driven policy. Investment inR&D was unceasingly increased, which currently, occupies4.87% of its operation revenue. In 2015, its key manufacturing process, major equipment and special working stages had been automated and intelligentialized. “Automated digital polyester yarn dyeing technology and equipment”, which had won the first prize of the National Scientific and Technological Awards, is promoted throughout the company. Meanwhile, garment 3D measurement, MTM automatic sample making technology and CAM automate tailor system were brought in by the company to boost upgradation for each and every producing step. As for new product development, the company maintained one-to-oneR&D matchmaking with TMW, PVH in America and Uniqlo and Ltochu in Japan. Thus, a series of Lu Thai-style engraved products, featuring high technology content cropped out by making full use of the upstream and downstream resources, and integrated innovation of the whole product chain was achieved. In 2015, itsR&D for technology of warp yarn foam sizing and industrial application won the “First Prize of Scientific and Technological Development” awarded by China Textile Industry Association. During the reporting period, the company won one first prize and one second prize of scientific and technological development awarded by the China Textile Industry Association, one second prize of this sort in the provincial level. Besides, 78 patents were declared and accepted. The company also participated in enacting 1 national standard. Up till now, it altogether won 42 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. 333 patents were applied and accepted, of which, 208 were authorized ones.What’s more, the company also involved in or taking over 26 standards.
It upgraded itself from “made in Lu Thai” to “created in Lu Thai” to improve its brand influence. The company took full advantage of its Milan Office in Italy and the subsidiary in America to internationalize its creativity and design and advance its upgradation from “made in Lu Thai” to “created in Lu Thai”. Now, the sales for self-designed fabric takes up to9.95% of its total production. Owning to the product promotion conferences convened in Milan, New York andTokyo, Lu Thai established the long-term strategic cooperation with world-renowned clients, including Burberry (U.K.), Oxford (USA), Armani and Gucci(Italy), Uniqlo (Japan) and TAL (Hong Kong), which escalated its brand influence and popularity with time passing by. In 2015, its work “Flower Shadowing” won the only gold prize in the “International Fabric Design Competition (China) and the 33rd (2016 Spring& Summer) Chinese Fashionable Fabric Contest”.
Beijing Lutai Youxian E-Commerce Co., Ltd, a subsidiary of Lu Thai, was established in 2014. It is equipped with the O2O mode featuring “place order online and conduct measurement by visiting the customers”. Customers can make an appointment and order conveniently through Utailor, Vshop, Jingdong Flagship Store or dial 400 telephone. The company provides customized service for clients ordering high-grade shirts. Since “UTAILORE”, one of its high-endmen’s clothing was pushed to the market, repeat purchase rate from its customers, old and new, is rising consistently. Now, its business covers the first-tire cities, inclusive of Beijing, Shanghai, Shenzhen and Guangzhou, which paves the way for the promotion of its garment brands.
At the current stage, Lu Thai, with natural fabric as its flagship, multi-component functional fiber fabric as its spearhead, wash-and-wear non-ironing technology as its core competency, the latest consumption trend as its guidance and internationalized industrial manufacturing as its basis, is sparing every effort to attain a global integrated development, so as to ensure its leading position in the yarn-dyed shirt fabric sector.
The 2015 Annual Report of Lu Thai Textile Co., Ltd. II. Main business analysis
1. Summary
For the reporting period, the Company achieved operating revenues of RMB6.173 billion, up0.06% from last year, with operating costs being RMB4.341 billion, up2.51% from last year; selling expenses being RMB192 million, up7.66% from last year; andR&D expenses being RMB295 million, up2.05% from last year. And the net cash flows from operating activities stood at RMB10.28 billion, down7.60% from last year.
2. Revenues and costs
(1) Breakdown of the operating revenues
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||2015||2014|||
||||||+/-|
|||In operating||In operating||
||Amount||Amount|||
|||revenues||revenues||
|Operating revenues|6,173,322,778.61|100%|6,169,688,792.53|100%|0.06%|
|By segment||||||
|Textile and apparel|5,666,835,971.98|91.80%|5,491,403,490.30|89.01%|3.19%|
|Cotton|36,667,302.61|0.59%|169,177,438.50|2.74%|-78.33%|
|Electricity and steam|130,561,983.84|2.11%|193,169,049.60|3.13%|-32.41%|
|Other|339,257,520.18|5.50%|315,938,814.13|5.12%|7.38%|
|By product||||||
|Fabric products|4,497,661,649.68|72.86%|4,398,270,311.79|71.29%|2.26%|
|Shirts|1,169,174,322.30|18.94%|1,093,133,178.51|17.72%|6.96%|
|Cotton|36,667,302.61|0.59%|169,177,438.50|2.74%|-78.33%|
|Electricity and steam|130,561,983.84|2.11%|193,169,049.60|3.13%|-32.41%|
|Other|339,257,520.18|5.50%|315,938,814.13|5.12%|7.38%|
|By area||||||
|Hong Kong|319,142,637.77|5.17%|415,169,226.47|6.73%|-23.13%|
|Japan and South||||||
||404,101,936.72|6.55%|363,024,424.30|5.88%|11.32%|
|Korea||||||
|Southeast Asia|1,877,255,492.74|30.41%|1,486,896,361.41|24.10%|26.25%|
|Europe and America|1,002,515,150.25|16.24%|1,020,006,777.63|16.53%|-1.71%|
|Other|486,694,905.10|7.88%|803,797,996.36|13.03%|-39.45%|
|China Mainland|2,083,612,656.03|33.75%|2,080,794,006.36|33.73%|0.14%|

The 2015 Annual Report of Lu Thai Textile Co., Ltd. (2) Segments, products or areas contributing over10% of the operating revenues or profits
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||||Operating||Gross profit|
||Operating||Gross profit||Operating cost:||
|||Operating cost||revenue: YoY||margin: YoY|
||revenue||margin||YoY +/-%||
|||||+/-%||+/-%|
|By segment|||||||
|Textile and|||||||
||5,666,835,971.98|3,991,647,481.25|29.56%|3.19%|6.54%|-2.21%|
|apparel|||||||
|By product|||||||
|Fabric products|4,497,661,649.68|3,169,035,497.16|29.54%|2.26%|5.24%|-2.00%|
|Shirts|1,169,174,322.30|822,611,984.09|29.64%|6.96%|11.85%|-3.08%|
|By area|||||||
|Southeast Asia|1,877,255,492.74|1,322,693,477.95|29.54%|26.25%|26.88%|-0.35%|
|Europe and|||||||
||1,002,515,150.25|705,727,873.56|29.60%|-1.71%|0.98%|-1.88%|
|America|||||||
|China Mainland|2,083,612,656.03|1,460,389,306.07|29.91%|0.14%|4.99%|-3.24%|

 Main business data of the previous year restated according to the changed statistical caliber for the reporting period
□ Applicable√ Inapplicable
(3) Product sales revenue higher than the service revenue
√ Yes□ No
|||||||
|-|-|-|-|-|-|
|Business segment|Item|Unit|2015|2014|+/-|
||Sales volume|(0,000 meters)|22,207.14|22,459|-1.12%|
|Textile and fabric|Output|(0,000 meters)|25,468.85|25,202|1.06%|
||Stock|(0,000 meters)|3,104.67|2,513|23.54%|
||Sales volume|(0,000 pieces)|1,837.08|1,758.74|4.45%|
|Textile and apparel|Output|(0,000 pieces)|1,859.32|1,751.19|6.17%|
||Stock|(0,000 pieces)|126.46|108.8|16.23%|
||Sales volume|(ton)|2,903.68|9,119.35|-68.16%|
|Cotton|Output|(ton)|13,634|23,469.35|-41.91%|
||Stock|(ton)|4,683|4,926.94|-4.95%|
||Sales volume|(000 KWH)|108,044.04|244,997.45|-55.90%|
|Electricity|Output|(000 KWH)|383,485.09|362,383.79|5.82%|
||Stock|(000 KWH)||||

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
||Sales volume|(ton)|307,894.71|338,604.87|-9.07%|
|Steam|Output|(ton)|1,241,941.61|1,222,788.48|1.57%|
||Stock|(ton)||||

Reason for any over30% YoY movements in the data above
√ Applicable□ Inapplicable
1. The sales volume of cotton stood at 2,903.68 tons in 2015, down68.16% over last year, which was mainly because the Lu Thai subsidiary in Xinjiang sold less reserved cotton. The cotton output stood at 13,634 tons in 2015, down41.91% over last year, which was mainly because the output of the unginned cotton decreased due to the weather.
2. 108,044,040 KWH of electricity was sold in 2015, down55.90% from last year, mainly because the electricity sold by Xinsheng Thermal Power to the Company increased by 158,054,720 KWH from last year.
(4) Execution progress of major signed sales contracts in the reporting period
□ Applicable√ Inapplicable
(5) Breakdown of the operating costs
By segment and product
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||2015||2014|||
|Segment|Item|||||+/-|
|||Amount|In operating costs|Amount|In operating costs||
|Textile and|||||||
||Operating cost|3,991,647,481.25|91.95%|3,746,686,521.54|88.48%|6.54%|
|apparel|||||||
|Cotton|Operating cost|30,736,539.86|0.71%|160,183,463.13|3.78%|-80.81%|
|Electricity and|||||||
||Operating cost|92,038,888.21|2.12%|131,997,341.43|3.12%|-30.27%|
|steam|||||||
|Other|Operating cost|226,611,967.72|5.22%|195,717,092.68|4.62%|15.79%|

 Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||2015||2014|||
|Product|Item|||||+/-|
|||Amount|In operating costs|Amount|In operating costs||
|Fabric products|Operating cost|3,169,035,497.16|73.00%|3,011,215,500.88|71.11%|5.24%|
|Shirts|Operating cost|822,611,984.09|18.95%|735,471,020.66|17.37%|11.85%|
|Cotton|Operating cost|30,736,539.86|0.71%|160,183,463.13|3.78%|-80.81%|
|Electricity and|||||||
||Operating cost|92,038,888.21|2.12%|131,997,341.43|3.12%|-30.27%|
|steam|||||||
|Other|Operating cost|226,611,967.72|5.22%|195,717,092.68|4.62%|15.79%|

Note:
|||||||||
|-|-|-|-|-|-|-|-|
|Product|Period|Raw material|Labor cost|Depreciation|Energy|Manufacture|Total|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|||||||expenses||
|Fabric|2015|55.56%|17.50%|4.91%|12.92%|9.11%|100.00%|
||2014|54.36%|17.44%|5.10%|12.70%|10.40%|100.00%|
|Shirts|2015|55.71%|39.10%|1.61%|0.74%|2.84%|100.00%|
||2014|58.76%|37.33%|1.07%|0.68%|2.16%|100.00%|

 (6) Changes in the consolidation scope for the reporting period
√ Yes□ No
Lu Thai (Vietnam), a new wholly-funded subsidiary, was incorporated in the current year, which was thus included in the consolidation scope.
(7) Major changes in the business, products or services in the reporting period
□ Applicable√ Inapplicable
(8) Main customers and suppliers
Main customers
|||
|-|-|
|Total sales to top 5 customers (RMB Yuan)|1,344,639,213.27|
|Ratio of total sales to top 5 customers to annual total sales||
||21.78%|
|(%)||

Information about the top 5 customers
|||||
|-|-|-|-|
|Serial No.|Name of customer|Sales (RMB Yuan)|Proportion in annual total sales (%)|
|1|TAL|456,970,643.83|7.40%|
|2|OLYMP|329,683,575.10|5.34%|
||CHENFENG (JIANGSU) GARMENT CO.,|||
|3||207,401,266.16|3.36%|
||LTD.|||
|4|THE MEN’S WEARHOUSE|189,583,188.61|3.07%|
|5|OXFORD|161,000,539.57|2.61%|
|Total|--|1,344,639,213.27|21.78%|

 Other information about the main customers
□ Applicable√ Inapplicable
Main suppliers
|||
|-|-|
|Total purchases from top 5 suppliers (RMB Yuan)|699,746,240.69|
|Ratio of total purchases from top 5 suppliers to annual||
||17.78%|
|total purchases (%)||

Information about the top 5 suppliers
The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||
|-|-|-|-|
|Serial No.|Name of supplier|Purchase amount (RMB Yuan)|Proportion in annual total purchases (%)|
||ZIBO POWER SUPPLY COMPANY OF|||
|1|STATE GRID SHANDONG ELECTRIC|251,015,073.29|6.37%|
||POWER COMPANY|||
||XINJIANG PRODUCTION AND|||
|2|CONSTRUCTION CORPS COTTON|141,854,898.37|3.61%|
||AND LINEN COMPANY|||
||AKESU YONGXING COTTON|||
|3||115,594,056.29|2.94%|
||INDUSTRY CO., LTD.|||
|4|ALLENBERG COTTON CO.|96,911,258.97|2.46%|
|5|SAN YANG TEXTILE CO., LTD.|94,370,953.77|2.40%|
|Total|--|699,746,240.69|17.78%|

 Other information about the main suppliers
□ Applicable√ Inapplicable
3. Expense
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||2015|2014|+/-|Reason for any significant change|
|Selling expenses|191,933,295.19|178,283,494.87|7.66%||
|Administrative expenses|670,704,384.29|634,545,131.08|5.70%||
|Financial expenses|16,481,023.89|15,462,783.19|6.59%||

4.R&D input
√ Applicable□ Inapplicable
With leading the technology development in the industry as the goal, the research staff of the Company work hard in new product development, new technology promotion and transformation of new technological results to productivity to explore ways for transforming the business mode, adjusting the structure and extending the industrial chain. These efforts will promote theCompany’s development towards an energy-saving and environment-friendly enterprise and truly achieve the sustainable development. Particulars about theR&D input
|||||
|-|-|-|-|
||2015|2014|+/-%|
||1,693|1,876|-9.75%|
|Number of R&D personnel||||
|R&D personnel in total|10.17%|11.15%|-0.98%|
|employees||||
||294,928,756.29|289,005,271.10|2.05%|
|R&D input (RMB Yuan)||||
|R&D input in operating|4.78%|4.68%|0.10%|
|revenues||||
|Capitalized R&D input (RMB|0.00|0.00|0.00%|
|Yuan)||||
|Capitalized R&D input in total|0.00%|0.00%|0.00%|
|R&D input||||

The 2015 Annual Report of Lu Thai Textile Co., Ltd. Reasons for any marked YoY change of the proportion of theR&D input in the operating revenues
□ Applicable√ Inapplicable
Reasons for any sharp variation of the capitalization rate on theR&D input and rationale
□ Applicable√ Inapplicable
5. Cash flows
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|2015|2014|+/-|
|Subtotal of cash inflows from operating activities|6,298,613,072.87|6,463,160,275.90|-2.55%|
|Subtotal of cash outflows from operating activities|5,271,017,668.53|5,351,064,926.88|-1.50%|
|Net cash flows from operating activities|1,027,595,404.34|1,112,095,349.02|-7.60%|
|Subtotal of cash inflows from investing activities|53,217,989.19|45,718,485.58|16.4%|
|Subtotal of cash outflows from investing activities|572,981,769.64|756,763,199.57|-24.29%|
|Net cash flows from investing activities|-519,763,780.45|-711,044,713.99|26.90%|
|Subtotal of cash inflows from financing activities|1,535,434,022.24|950,315,336.83|61.57%|
|Subtotal of cash outflows from financing activities|1,948,641,555.44|1,576,552,414.64|23.60%|
|Net cash flows from financing activities|-413,207,533.20|-626,237,077.81|34.02%|
|Net increase in cash and cash equivalents|116,301,675.35|-220,515,707.59|152.74%|

 Main influence factors for any significant YoY changes in the items above
√ Applicable□ Inapplicable
For the reporting period, net cash flows from financing activities stood at RMB-413,207,533.20, up34.02% over last year, which was mainly because the cash received as borrowings increased. Net increase in cash and cash equivalents stood at RMB116,301,675.35, up152.74% over last year, which was mainly because the net cash flows from financing activities increased as the Company repurchased its B-shares and invested in storage funds .
Reasons for any big difference between the net operating cash flows and the net profits in the reporting period
□ Applicable√ Inapplicable
III. Non-core business analysis
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Amount|In total profits (%)|Source/reason|Continuity|
||||Gains on delivery of financial assets such as||
|Investment gains|31,540,015.51|3.57%||No|
||||forward exchange settlement||
|Gains/losses on fair value|||Losses on fair value changes of financial assets||
||-60,685,931.36|-6.87%||No|
|changes|||and liabilities||
|Asset impairment|27,297,445.74|3.09%|Inventory falling price provision, bad-debt|No|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
||||provision, etc.||
|Non-business revenue|52,201,733.84|5.91%|Governmental subsidies|No|
|Non-business expense|10,168,567.50|1.15%|Losses on disposal of non-current assets|No|

 IV. Asset and liability analysis
1. Significant changes in the asset composition
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||As at 31 Dec. 2015||As at 31 Dec. 2014||Proportion|Reason for|
|||In totalassets (%)||In total assets|change|significant|
||Amount||Amount||||
|||||(%)|（%）|change|
|Monetary funds|795,501,196.07|8.75%|666,293,798.30|7.72%|1.03%||
|Accounts receivable|262,848,042.62|2.89%|211,970,554.10|2.46%|0.43%||
|Inventories|1,743,963,973.24|19.18%|1,752,570,382.21|20.31%|-1.13%||
|Investing real estate||0.00%||0.00%|0.00%||
|Long-term equity|||||||
|||0.00%||0.00%|0.00%||
|investment|||||||
|Fixed assets|4,907,575,469.84|53.98%|4,930,848,056.04|57.15%|-3.17%||
|Construction in progress|205,094,029.50|2.26%|123,585,226.80|1.43%|0.83%||
|Short-term borrowings|802,766,318.90|8.83%|517,452,946.24|6.00%|2.83%||
|Long-term borrowings||0.00%|9,904,645.59|0.11%|-0.11%||

2. Assets and liabilities measured at fair value
√ Applicable□ Inapplicable
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Gain/loss on|Cumulative fair||Purchasedamount incurrent period|||
|||||Impairment||||
||Opening|fair value|value changes|||Sold amount in|Closing|
|Item||||provisions in||||
||amount|changes in|recorded into|||current period|amount|
|||||current period||||
|||current period|equity|||||
|Financial assets||||||||
|1. Financial||||||||
|assets measured||||||||
|at fair value of||||||||
|which changes|||||||71,696,678.7|
||0.00|-17,296,256.36|||100,348,429.28|7,196,971.33||
|are recorded||||||||
||||||||0|
|into current||||||||
|gains/losses||||||||
|(excluding||||||||
|derivative||||||||

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|financial assets)||||||
||||||71,696,678.7|
|Total of above|0.00|-17,296,256.36|100,348,429.28|7,196,971.33||
||||||0|
|Financial|||4,319,714,200.|3,013,340,900.|46,695,875.0|
||3,306,200.00|43,389,675.00||||
|liabilities|||00|00|0|

 Significant changes in the measurement attributes of the main assets in the reporting period
□ Yes√ No
V. Investment analysis
1. Total investments
□ Applicable√ Inapplicable
2. Significant equity investments made in the reporting period
□ Applicable√ Inapplicable
3. Significant non-equity investments ongoing in the reporting period
□ Applicable√ Inapplicable
4. Financial investments
(1) Securities investments
√ Applicable□ Inapplicable
Unit: RMB Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Variety||||||Gain/los|Cumulat|||||||
||Code of|Name of|Initial|Account||s on fair|ive fair|Purchas||Gain/los||||
|of||||ing|Opening|value|value||Sold in||Closing|Account|Source|
||securitie|securitie|investm|measure|book|changes|changes|ed in|current|s in|book|||
|securitie||||||||current||current||ing title|of funds|
||s|s|ent cost|ment|value|in|recorde|period|period|period|value|||
|s||||model||current|d into|||||||
|||||||period|equity|||||||
|||Guotai||||||||||Transact||
|Domesti||||Fair||||||||||
|||Junan|56,047,|||-17,857,||56,047,|1,939,1|-8,228,1|27,576,|ional|Own|
|c/overse|01788|||value|0.00||0.00|||||||
|||Internati|956.99|||878.38||956.99|45.60|10.00|964.80|financia|funds|
|as stock||||method||||||||||
|||onal||||||||||l asset||
|||||||||||||Transact||
|Domesti||||Fair||||||||||
||||14,918,|||-1,216,6||14,918,|||13,692,|ional|Own|
|c/overse|02883|COSL||value|0.00|||||||||
||||675.44|||20.88||675.44|||542.85|financia|funds|
|as stock||||method||||||||||
|||||||||||||l asset||
|Domesti||Lianhua|10,354,|Fair||513,605||10,354,|||10,872,|Transact|Own|
||00980||||0.00|||||||||
|c/overse||Superma|818.47|value||.66||818.47|||439.58|ional|funds|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|as stock||rket||method||||||||financia||
|||||||||||||l asset||
|||||||||||||Transact||
|Domesti||||Fair||||||||||
|||Jinjiang|8,286,1|||967,284||8,286,1|||9,260,9|ional|Own|
|c/overse|02006|||value|0.00|||||||||
|||Hotel|27.16|||.02||27.16|||73.54|financia|funds|
|as stock||||method||||||||||
|||||||||||||l asset||
|||||||||||||Transact||
|Domesti||Guangsh||Fair||||||||||
||||3,559,2|||-796,71||3,559,2|||2,756,2|ional|Own|
|c/overse|00525|en||value|0.00|||||||||
||||14.86|||3.99||14.86|||72.05|financia|funds|
|as stock||Railway||method||||||||||
|||||||||||||l asset||
|||Tong||||||||||||
|||||||||||||Transact||
|Domesti||Ren||Fair||||||||||
||||3,019,6|||176,423||3,019,6|||3,197,4|ional|Own|
|c/overse|01666|Tong||value|0.00|||||||||
||||24.02|||.08||24.02|||26.40|financia|funds|
|as stock||Technol||method||||||||||
|||||||||||||l asset||
|||ogies||||||||||||
|||||||||||||Transact||
|Domesti||||Fair||||||||||
|||Wongtee|1,740,3|||436,485||1,740,3|||2,180,2|ional|Own|
|c/overse|200056|||value|0.00|||||||||
|||B|18.30|||.00||18.30|||15.80|financia|funds|
|as stock||||method||||||||||
|||||||||||||l asset||
|||||||||||||Transact||
|Domesti||||Fair||||||||||
|||Chiwan|671,995|||159,213||671,995|||832,453|ional|Own|
|c/overse|200053|||value|0.00|||||||||
|||Base B|.80|||.10||.80|||.65|financia|funds|
|as stock||||method||||||||||
|||||||||||||l asset||
|||||||||||||Transact||
|Domesti||||Fair||||||||||
|||Shenzhe|546,310|||-76,488.||546,310|||469,224|ional|Own|
|c/overse|200058|||value|0.00|||||||||
|||n SEG B|.80|||80||.80|||.00|financia|funds|
|as stock||||method||||||||||
|||||||||||||l asset||
|||||||||||||Transact||
|Domesti||Chow||Fair||||||||||
||||429,038|||-1,363.5||429,038|||427,664|ional|Own|
|c/overse|00116|Sang||value|0.00|||||||||
||||.32|||0||.32|||.16|financia|funds|
|as stock||Sang||method||||||||||
|||||||||||||l asset||
|Other securities||||||||||||||
||||774,349||774,349|399,798||774,349|5,257,8|1,860,0|430,501|||
|investments held at||||--|||0.00|||||--|--|
||||.12||.12|.33||.12|25.73|81.11|.87|||
|period-end||||||||||||||
||||100,348||100,348|-17,296,||100,348|7,196,9|-6,368,0|71,696,|||
|Total||||--|||0.00|||||--|--|
||||,429.28||,429.28|256.36||,429.28|71.33|28.89|678.70|||
|Disclosure date of board||||||||||||||
|announcement on approval||||||||||||||
|of securities investment||||||||||||||
|Disclosure date of general||||||||||||||
|meeting announcement on||||||||||||||

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
||
|-|
|approval of securities|
|investment (if any)|

(2) Investment in financial derivatives
√ Applicable□ Inapplicable
Unit: RMB Ten thousand
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Proporti||
|||||||||||||on of||
|||||||||||||closing||
||||||||||||||Actua|
|||||||||||||investm||
|||Related-|Type of|||||Amount||Impairm||||
|||||Initial|||Opening||Amount||Closing|ent|l|
|Operato||party|derivativ||Beginni|Ending||purchas||ent||amount|gain/l|
||Relation|||investm|||investm||sold in||investm|||
|||t ransacti|e|||||ed inreportin||provisio||in the|oss in|
|r||||ent|ng date|date|ent||reportin||ent|||
|||on ornot|investment|amount|||amount|g period|g period|n (ifany)|amount|Company’s|reporting|
|||||||||||||closing|period|
|||||||||||||net||
|||||||||||||assets||
|||||||||||||(%)||
||||Forward|||||||||||
|Commer||||||||||||||
||Non-rel||exchange|249,144.|2014-11|2016-06|21,213.8|227,930.|169,758.||79,386.2||2,827.|
|cial||No||||||||||10.91%||
||ated||settleme|24|-14|-28|8|36|03||1||33|
|bank||||||||||||||
||||nt|||||||||||
|Commer|||Foreign|||||||||||
||Non-rel||||2015-02|2015-11||||||||
|cial||No|exchange|7,123.75|||0|7,123.75|7,123.75||0||11.33|
||ated||||-11|-13||||||||
|bank|||trading|||||||||||
|Commer||||||||||||||
||Non-rel||Option|228,752.|2014-10|2016-07||196,917.|124,452.||||952.1|
|cial||No|||||31,835||||104,300|14.33%||
||ated||portfolio|31|-21|-10||31|31||||4|
|bank||||||||||||||
|||||485,020.|||53,048.8|431,971.|301,334.||183,686.||3,790.|
|Total|||||--|--||||||25.24%||
|||||3|||8|42|09||21||8|
|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 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
||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 control measures: The Company carefully studied and mastered laws, regulations and|
||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|
|Risk analysis and risk control||
||liquidity, and the counterparty or the Company couldn’t fulfill the contract due to other|
|measures for derivative products held||
||aspects except the liquidity, which would cause credit risk and further economic losses for|
|in reporting period (including but not||
||the Company.|
|limited to market risk, liquidity risk,||
||Risk control measures: the Company chose the powerful financial institutions with good|
|credit risk, operation risk, legal risk,||
||reputation as the counterparty, and signed standard derivative products transaction contract,|
|etc.)||
||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 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|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
||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 Dec. 2015, the Company held 55 undue financial derivative product contracts,|
||totaling USD326 million, including 26 forward settlement contracts worth USD125.50|
||million and 29 foreign exchange option contracts worth USD200.50 million (the latest|
||expiration before Jul. 2016). The financial derivative products above accounted for 25.24%|
|Changes in market prices or fair value||
||of the closing net assets.|
|of invested derivatives in reporting||
||2. From Jan. 2015 to Dec. 2015, the due financial derivative products of the Company|
|period (fair value analysis should||
||totally equaled to USD483.2572 million, and the gain generated was RMB37.9080 million.|
|include specific analysis methods as||
||To be specific, the due forward settlement was USD269.6270 million, generating gain of|
|well as relevant assumptions and||
||RMB28.2733 million; the due forward foreign exchange trading amount equaled to|
|parameters)||
||USD11.6302 million, which generated gain of RMB0.1133 million; and the due foreign|
||exchange options equaled to USD202 million, of which USD172 million was delivered on|
||time upon satisfaction of the delivery conditions, generating gain of RMB9.5214 million,|
||and USD30 million was undelivered due to dissatisfaction of the delivery conditions.|
|Significant changes in the Company’s||
|accounting policy and specific||
|accounting principles for derivatives|No significant changes|
|in reporting period when compared to||
|last period||
|Specific opinion from independent|The Company’s independent directors Zhou Zhiji, Zhang Chengzhu, Wang Lei, Xu Jianjun|
|directors on the Company’s|and Zhao Yao, concerning conducting derivatives business, have issued the following|

The 2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
|derivatives investment and risk|professional advice: We are of the opinion that it will strengthen the Company’s|
|control|competitiveness to use derivative transactions with focus on forward settlement and|
||purchase as an effective tool to avoid foreign exchange risks, to strengthen the relevant|
||internal control and to carry out the loss and risk prevention measures so as to improve the|
||operation and management. 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.|

5. Utilization of raised funds
□ Applicable√ Inapplicable
No such cases in the reporting period
VI. Sale of major assets and equity interests
1. Sale of major assets
□ Applicable√ Inapplicable
No such cases in the reporting period
2. Sale of major equity interests
□ Applicable√ Inapplicable
VII. Main controlled and joint stock companies
√ Applicable□ Inapplicable
Main subsidiaries and joint stock companies with an over10% influence on theCompany’s net profits
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Relationship||||||||
|Company||Main|Registered|||Operating|Operating||
|||||Total assets|Net assets|||Net profits|
||with the||||||||
|||business|||||||
|name|||capital|||revenues|profits||
||Company||||||||
|Zibo|||||||||
|Xinsheng|||||||||
|||Electricity,|162,435,600.|420,309,415.|345,285,885.|416,575,363.|142,174,769.|111,757,613.|
|Thermal|Subsidiary||||||||
|||steam|00|52|64|30|09|29|
|Power Co.,|||||||||
|Ltd.|||||||||

Subsidiaries obtained or disposed in the reporting period
□ Applicable√ Inapplicable
Particulars about the main controlled and joint stock companies
The 2015 Annual Report of Lu Thai Textile Co., Ltd. VIII. Structured bodies controlled by the Company
□ Applicable√ Inapplicable
IX. Outlook of theCompany’s future development
1. Competition and development trends in the sector
At present, the global production capacity of high-ended dyed fabric is about 0.8 billion meters, which was the largest production base of yarn-dyed fabric. The pure cotton yarn-dyed fabric has characters of dyed fastness, clear striped weave, abundant color, comfort and strong gas permeability, which was always the main shell fabric of medium and high end shirts. In the recent years, accompanied with the increase of the domestic environmental protection stress, the increasingly improvement of the production factors and the guiding of the national transformation upgrade strategy, part of the low end and small scale yarn-dyed capacity which quit the market had been inexorable trend.
The yarn-dyed fabric falls into three categories, i.e. the top, the high-end, and the middle /low end, which have formed a triangular structure. To be specific, the top-grade yarn dyed fabric is mainly produced by few manufacturers in Italy, France, Germany, etc., and it mainly targets at the fashion and top-brand shirt market. The high-end yarn dyed fabric was characterized of high-density and high-counts, and delicateness after-finishing. Though inferior to the top-grade yarn dyed fabric in terms of the pattern design and fashion, it requires an advanced manufacturing technology and a high product quality, which does not differ much from the former. In the long run, along with the recovery of the global economy, as well as improvement of urbanization,residents’ incomes and consumption in China, the market requirements of the future medium and high end yarn dyed fabric would constantly increased and at the same time would appear the tendency that the market concentrate towards to the medium and large enterprises.
2. Development strategies of the Company
China’s textile industry enjoys outstanding advantages in the world and mainly in the aspects such as the capital, technology and labor efficiency, and although the cost of the factor cost is increasing day by day, the prominent comprehensive advantage ofChina’s textile industry remains unchanged. The Company is a large textile enterprise that boasts a complete industrial chain from cotton planting, yarning, dyeing, weaving and post-processing to cloth manufacturing. It is the largest production base for dyed textile for shirts in the world. Now, it has developed three series textiles for shirts, including pure cotton, cotton and natural fiber, and cotton and functional fiber mixture. At present, the Company has speeded up the integration of internationally advantageous resources while promoting the upgrading of Luthai manufacturing to Luthai creation as well as improving its product quality and increasing its production efficiency. This helps realize a reasonable layout for theCompany’s international capacity, further improves its internationalization, and maintains its outstanding edges in global dyed materials for shirts. In terms of brand, the Company will crave out a new marketing mode through the Internet and mobile terminals, and continuously enhance high-end shirt custom service, to balance the development of domestic and international markets. Also, the Company will increase its investment in technologyR&D, design and energy saving& emission reduction, to offer more green and low-carbon products to the market.
3. Operating plan (The contents set forth herein do not form any commitment of the Company.)
(1) As for the Company government: The Company will strengthen the system construction of the enterprise internal control, constantly perfect the organization structure and the legal person government structure as well as the prevention mechanism of the risks, and guarantee the Company to realize the healthy, stable and sustainable development in the system level.
(2) As for the market expansion: The Company will adhere to the philosophy of attaching equal importance to both the domestic and overseas markets, vigorously conduct activities for the “Year for Market Service Improvement”, proactively expand emerging markets on the basis of stabilizing the existing markets, further enlarge the domestic market share, and promote a balanced development of the domestic and overseas markets.
(3) As for the enterprise management: The Company will follow the guideline of improving its product quality and increasing its production efficiency, refine management responsibility, deepen promoting excellent performance management mode in all-round,
The 2015 Annual Report of Lu Thai Textile Co., Ltd. carry forward LTPS, further deepen and refine comprehensive budget management, and keep pushing forward management upgrading.
(4) As for the brand construction: The Company will make great efforts to promote the innovation marketing mode, gain more customers with quality and service, further optimize resource allocation as well as perfect the integration of the online and offline marketing mode. Depend on the internet and the mobile terminal means, provide the advanced customization service and satisfy the individual needs of the market.
(5) Concerning global planning, the Company will let Lu Thai Milan and Lu Thai America play their roles in market expansion, design andR&D, customer service, talent cultivation, etc. so as to increase the proportion of independently designed products in the total sales. It will push forward the construction of its production bases in Southeast Asia step by step, integrate its resources at home and abroad and avoid potential trade barriers to enlarge its international production scale and maintain a leading position in the global yarn-dyed industry.
4. Fund demand, source and using plan
During the reporting period, the Lu Thai (Cambodia) Phase II project and the Lu Thai (Burma) project were successfully put into production. The Company incorporated Lu Thai (Vietnam) Textile Co., Ltd. to carry out the 60,000-spindle spinning and 30-million-meter yarn-dyed fabric/year production lines projects. Currently, the first phase of the 60,000-spindle spinning project has been put into operation, and the 30-million-meter yarn-dyed fabric project is going on as planned. The capital resources of the whole projects were the self-owned and self-raised funds of the Company. At present, the Company is also preparing to incorporate a garment factory in Vietnam (Lu An Garments Co., Ltd.) with a designed annual capacity of 6 million pieces of shirts. The funds for the aforesaid projects all come from the self-owned and self-raised funds of the Company.
5. Risk of reverse effect and countermeasures for the company to achieve development strategy and business goal
(1) Economic environment impact: Compact of persistence of slow resurging of developed economic entity market and domestic industrial structure deep adjustment on the whole consumption market may possibly cause uncertain for market environment of the company, and that may possibly influence on increase of oversees sales. The Company will try the best to stabilize the domestic and international market and actively expand domestic market at the same time, to achieve a balanced development between domestic and foreign sales.
(2) As the cost for production elements in China increases day by day, and the processing trade for textile garment especially garment processing has been transferred to countries in southeastern Asia, it seems to be a must for top textile enterprise to go abroad. The Company will, based on its comprehensive research on production elements, promote the comprehensive utilization of internationally advantageous resources to create a reasonable layout for processing bases.
(3) The Company mainly uses long-staple cotton as its raw materials, whose price may be affected by market supply-demand, climate, policy, exchange rate and quota. In 2016, when thegovernment’s cotton quota policy stayed unchanged, the cotton cost will be mainly affected by domestic market. Therefore, except ensuring stable supply of long-staple cotton from Xinjiang subsidiary, the Company must carefully study on market developments, and make every effort to reduce the influences of raw material price fluctuation on its business performance, through actively effective manners and methods.
(4) Change of exchange rate: at present and in the future for a long time, products of the Company are mainly exported to the international market, and sales income mainly settled with USD; meanwhile, major equipments used in the Company was imported, part foreign exchange paid for import was not USD. And the overseas production bases of the Company make it more sensitive to exchange rate changes. Our country executed directional system on fluctuated exchange rate, so the exchange rate fluctuated with changes of domestic and foreign policy and environment. When exchange rates experienced a great fluctuation, it might cause a negative influence on the Company. In order to reduce adverse influence of exchange rate fluctuation, the Company adopted the following measures: firstly, the Company proactively conducted foreign exchange hedging, using forward FX sales and purchase, forward foreign exchange trading and option portfolios to avoid some risks as well as making reasonable arrangement on settlement day and currency structure and conclusion of agreements on fixed foreign exchange rate to avoid exchange rate-related risks.
Secondly, the Company actively adjusted the Renminbi and foreign-currency liabilities structure to control financial costs. Thirdly,
The 2015 Annual Report of Lu Thai Textile Co., Ltd. according to the fluctuation trend of exchange rates, the Company properly adjusted imports of raw and auxiliary materials to partially offset the influence of exchange rate fluctuations on the Company. Fourthly, the Company tried to settle with its customers in Renminbi whenever was possible.
X. Visits paid to the Company for purposes of research, communication, interview, etc. 1. In the reporting period
√ Applicable□ Inapplicable
||||||
|-|-|-|-|-|
|Date|Way of visit||Type of visitor|Main inquiry information|
|2015-03-31|By phone||Institution|About basic information of the Company|
|2015-07-21|One-on-one meeting||Institution|Ditto|
|2015-08-27|By phone||Institution|Ditto|
|2015-09-09|One-on-one meeting||Institution|Ditto|
|2015-09-22|Other||Other|Ditto|
|2015-09-25|One-on-one meeting||Institution|Ditto|
|2015-09-25|One-on-one meeting||Institution|Ditto|
|2015-10-29|By phone||Institution|Ditto|
|Times of visit||8|||
|Number of visiting institutions||30|||
|Number of visiting individuals||0|||
|Number of other visiting entities||1|||
|Significant undisclosed information disclosed,|||||
|||No|||
|revealed or leaked|||||

2015 Annual Report of Lu Thai Textile Co., Ltd. Section V Significant Events
I. Profit distribution to the common shareholders& increase of the share capital from the capital reserves
Formulation, execution or adjustments of the profit distribution policy for the common shareholders, especially the cash dividend policy, in the reporting period
□ Applicable√ Inapplicable
Profit distribution plans (or preliminary plans) for the common shareholders and plans (or preliminary plans) for turning capital reserves into share capital for the recent three years (including the reporting period)
1. The 2015 annual profit allocation pre-plan reviewed and approved at the 31st Session of the 7th Board of Directors:
Based on the 954,407,896 shares (the total shares of 955,758,496 as at 31 Dec. 2015 minus the 1,350,600 B-shares repurchased in the year), the Company is to distribute a cash dividend of RMB5.00 for every 10 shares (including tax). The individual income tax for Share A shall be subject to related regulations under CS[2012] No. 85 Notice on Certain Question about the Implementation of Differentiated Individual Income Tax Policy for Share Dividend of Listed Companies jointly issued by Ministry of Finance, SAT, and CSRC; and that for Share B shall be conversed to HKD based on the central parity rate on interbank exchange market released by thePeople’s Bank of China on the following day aftershareholder’s meeting (for foreign shareholders, tax is free pursuant to CSZ (1994) No. 020 regulations; and non-residential corporate shareholders is entitled to a10% reduction of enterprise income tax according to related regulations under Enterprise Income Tax Law of thePeople’s Republic of China).
Based on the 954,407,896 shares, the Company should distribute cash dividends of RMB477,203,948.00 in total. However, for the Company is repurchasing its A-shares and B-shares, the repurchased but uncanceled shares in the special securities account for repurchase on the book closure date shall be excluded in the actual distribution of dividends. As such, the dividends for 2015 shall be subject to the actually distributed, and the retained profits shall be carried forward to the future. Such plan may only be implemented after the review and approval on 2015shareholder’s meeting.
2. The 2014 annual profit allocation pre-plan reviewed and approved at the 19th Session of the 7th Board of Directors:
By December 31 of 2014, theCompany’s registered capital was based on 955,758,496 shares, with a cash dividend of RMB5.00 distributed for every 10 shares (including tax). The individual income tax for Share A was subject to related regulations under CS[2012] No. 85 Notice on Certain Question about the Implementation of Differentiated Individual Income Tax Policy for Share Dividend of Listed Companies jointly issued by Ministry of Finance, SAT, and CSRC; and that for Share B shall be conversed to HKD based on the central parity rate on interbank exchange market released by thePeople’s Bank of China on the following day aftershareholder’s meeting (for foreign shareholders, tax was free pursuant to CSZ (1994) No. 020 regulations; and non-residential corporate shareholders were entitled to a10% reduction of enterprise income tax according to related regulations under Enterprise Income Tax Law of thePeople’s Republic of China).
Based on the above distribution plan, the Company actually distributed RMB477,879,248.00 dividends. The aforesaid profit distribution plan was implemented in Jun. 2015 after being reviewed and approved by theShareholders’ General Meeting 2014 held on 21 May 2015.
3. 2013 profit distribution plan has been approved on the 7th session of the seventh board meeting: By December 31 of 2013, theCompany’s registered capital is based on 955,800,496 shares, with RMB3.80 distributed for every 10 shares (including tax). The individual income tax for Share A shall be subject to related regulations under CS[2012] No. 85 Notice on Certain Question about the Implementation of Differentiated Individual Income Tax Policy for Share Dividend of Listed Companies jointly issued by Ministry of Finance, SAT, and CSRC; and that for Share B shall be conversed to HKD based on the central parity rate on interbank
2015 Annual Report of Lu Thai Textile Co., Ltd. exchange market released by thePeople’s Bank of China on the following day aftershareholder’s meeting (for foreign shareholders, tax is free pursuant to CSZ (1994) No. 020 regulations; and non-residential corporate shareholders is entitled to a10% reduction of enterprise income tax according to related regulations under Enterprise Income Tax Law of thePeople’s Republic of China). Based on the above distribution plan, the Company actually distributed RMB363,204,188.48 dividends. Such plan was implemented in May of 2014 after the review and approval on 2013shareholder’s meeting convened on April 29 of 2014.
Cash dividends distributed to the common shareholders in the recent three years (including the reporting period)
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Net profits|Proportion in net|||
|||attributable to|profits attributable|||
||Cash dividend (tax|shareholders of the|to shareholders of||Ratio of cash|
|Year||||Cash dividend in||
||||||dividend in other|
||included)|Company in|the Company in|other forms||
||||||forms|
|||consolidated|consolidated|||
|||statements|statements (%)|||
|2015|477,203,948.00|712,193,243.19|67.00%|0.00|0.00%|
|2014|477,879,248.00|958,725,402.84|49.85%|0.00|0.00%|
|2013|363,204,188.48|999,256,730.65|36.35%|0.00|0.00%|

 The Company made profits in the reporting period and the profits distributable to the common shareholders of the Company was positive, but it did not put forward a preliminary plan for cash dividend distribution:
□ Applicable√ Inapplicable
II. Preliminary plan for profit distribution and turning capital reserves into share capital for the reporting period
√ Applicable□ Inapplicable
|||
|-|-|
|Bonus shares for every 10 shares (share)|0|
|Dividend for every 10 shares (RMB Yuan) (tax||
||5|
|included)||
|Increased shares for every 10 shares (share)|0|
|Total shares as basis for preliminary distribution||
||954,407,896|
|plan (share)||
|Total cash dividends (RMB Yuan) (tax included)|477,203,948.00|
|Distributable profits (RMB Yuan)|3,259,342,039.15|
|Percentage of cash dividends in total distributed||
||100.00%|
|profits (%)||
|About cash dividends||
|If the Company is in a growth stage and has any plan for significant expenditure, in profit distribution, the proportion of cash||
|dividends shall be 20% or above.||
|Details about preliminary plan for profit distribution and turning capital reserves into share capital||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||
|-|
|Based on the 954,407,896 shares (the total shares of 955,758,496 as at 31 Dec. 2015 minus the 1,350,600 B-shares repurchased in|
|the year), the Company is to distribute a cash dividend of RMB5.00 for every 10 shares (including tax). The individual income tax|
|for Share A shall be subject to related regulations under CS [2012] No. 85 Notice on Certain Question about the Implementation of|
|Differentiated Individual Income Tax Policy for Share Dividend of Listed Companies jointly issued by Ministry of Finance, SAT,|
|and CSRC; and that for Share B shall be conversed to HKD based on the central parity rate on interbank exchange market released|
|by the People’s Bank of China on the following day after shareholder’s meeting (for foreign shareholders, tax is free pursuant to|
|CSZ (1994) No. 020 regulations; and non-residential corporate shareholders is entitled to a 10% reduction of enterprise income tax|
|according to related regulations under Enterprise Income Tax Law of the People’s Republic of China).|
|Based on the 954,407,896 shares, the Company should distribute cash dividends of RMB477,203,948.00 in total. However, for the|
|Company is repurchasing its A-shares and B-shares, the repurchased but uncanceled shares in the special securities account for|
|repurchase on the book closure date shall be excluded in the actual distribution of dividends. As such, the dividends for 2015 shall|
|be subject to the actually distributed, and the retained profits shall be carried forward to the future. Such plan may only be|
|implemented after the review and approval on 2015 shareholder’s meeting.|

III. Fulfillment of commitments
1. Commitments of the Company, its shareholders, actual controller, acquirer, directors, supervisors, senior management staff or other related parties fulfilled in the reporting period or ongoing at the period-end
√ Applicable□ Inapplicable
||||||||
|-|-|-|-|-|-|-|
|||||Date of|||
||Commitment|Type of|||Period of||
|Commitment|||Contents|making||Fulfillment|
||maker|commitment|||commitment||
|||||commitment|||
|Commitments made in share reform|||||||
|Commitments made in acquisition|||||||
|reports or reports on equity changes|||||||
|Commitments made in asset|||||||
|reorganization|||||||
|Commitments made in IPO or|||||||
|refinancing|||||||
|Commitments concerning stock|||||||
|ownership incentive|||||||
||Zibo Lucheng||The biggest|||Up to 10 Jan.|
||Textile||shareholder|||2016, Zibo|
||Investment||Zibo Lucheng|||Lucheng|
||Co., Ltd. and||Textile||10 Jul. 2015|Textile|
|Other commitments made to minority||Other|||||
||directors,||Investment|10 Jul. 2015|to 10 Jan.|Investment|
|shareholders||commitment|||||
||supervisors||Co., Ltd. and||2016|Co., Ltd. and|
||and senior||the directors,|||the directors,|
||executives of||supervisors|||supervisors|
||the Company||and senior|||and senior|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||
|-|-|-|-|
|||executives of|executives of|
|||the Company|the Company|
|||committed|did not reduce|
|||that the shares|their|
|||of the|shareholdings|
|||Company held|in the|
|||by them|Company. As|
|||would not be|such, the|
|||decreased|commitment|
|||within the six|has been|
|||months|fulfilled.|
|||starting from||
|||10 Jul. 2015.||
|Executed on time|Yes|||
|Specific reasons for failing to fulfill||||
|commitments on time and plans for|Inapplicable|||
|next step||||

2. Where there had been an earnings forecast for an asset or project and the reporting period was still within the forecast period, explain why the forecast has been reached for the reporting period.
□Applicable√ Inapplicable
IV. Occupation of theCompany’s funds for non-operating purposes by the controlling shareholder or its related parties
□ Applicable√ Inapplicable
No such cases in the reporting period.
V. Explanations given by the Board of Directors, the Supervisory Committee and the independent directors (if any) regarding the “non-standardauditor’s report” issued by the CPAs firm for the reporting period
□ Applicable√ Inapplicable
VI. YoY changes in the accounting policy, estimation and methods
□ Applicable√ Inapplicable
No such cases in the reporting period.
VII. Retrospective restatement due to correction of material accounting errors in the
reporting period
□ Applicable√ Inapplicable
2015 Annual Report of Lu Thai Textile Co., Ltd. No such cases in the reporting period.
VIII. YoY changes in the consolidation scope
√ Applicable□ Inapplicable
The Company incorporated a new wholly-fundedsubsidiary—Lu Thai (Vietnam) Textile Co.,Ltd.—in the current year.
IX. Engagement and dismissal of the CPAs firm
The CPAs firm at present
|||
|-|-|
|Name of domestic CPAs firm|Ruihua Certified Public Accountants (LLP)|
|Remuneration of domestic CPAs firm (RMB ten||
||158.5|
|thousand)||
|Consecutive years of audit services provided by||
||3|
|domestic CPAs firm||
|Name of certified public accountants from domestic||
||He Feng, Cui Xiaoli|
|CPAs firm||

The CPAs firm changed in the current period or not
□ Yes√ No
CPAs firm, financial accountant or sponsor engaged for internal control audit
√ Applicable□ Inapplicable
On 28 Mar. 2015, the Company held the 19th Session of the 7th Board of Directors, which reviewed and approved the Proposal on Engaging Ruihua Certified Public Accountants (LLP) as the 2015 Financial Report and Internal Control Auditor. The Company paid RMB435,000 in total for the internal control audit.
X. Listing suspension or termination after the disclosure of this Report
□ Applicable√ Inapplicable
XI. Bankruptcy& reorganization
□ Applicable√ Inapplicable
No such cases in the reporting period.
XII. Significant litigations and arbitrations
□ Applicable√ Inapplicable
No such cases in the reporting period.
2015 Annual Report of Lu Thai Textile Co., Ltd. XIII. Punishments and rectifications
□ Applicable√ Inapplicable
No such cases in the reporting period.
XIV. Credit conditions of the Company as well as its controlling shareholder and actual controller
□ Applicable√ Inapplicable
XV. Implementation of any equity incentive plan, employee stock ownership plan or other incentive measures for employees
□ Applicable√ Inapplicable
No such cases in the reporting period.
XVI. Significant related-party transactions
1. Related-party transactions relevant to routine operation
□ Applicable√ Inapplicable
No such cases in the reporting period.
2. Related-party transactions regarding the purchase or sale of assets or equity interests
□ Applicable√ Inapplicable
No such cases in the reporting period.
3. Related-party transitions regarding joint investments
□ Applicable√ Inapplicable
No such cases in the reporting period.
4. Credits and liabilities with the related parties
□ Applicable√ Inapplicable
No such cases in the reporting period.
5. Other significant related-party transactions
□ Applicable√ Inapplicable
No such cases in the reporting period.
2015 Annual Report of Lu Thai Textile Co., Ltd. XVII. Significant contracts and execution
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable√ Inapplicable
No such cases in the reporting period.
(2) Contract
□ Applicable√ Inapplicable
There was no any contract of the Company in the reporting period.
(3) Lease
□ Applicable√ Inapplicable
There was no any lease of the Company in the reporting period.
2. Significant guarantee
√ Applicable□ Inapplicable
(1) Guarantees provided by the company
Unit: RMB Ten Thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Particulars on external guarantee of the Company and its subsidiaries (excluding guarantees for subsidiaries)|||||||||
||Date of||||||||
||disclosure||||||Whether|Whether|
||||Date of making||||||
||of relevant|||Actual|||the|guarantee|
|Name of guarantee||Guarantee|guarantee (date||Type of|Guarantee|||
||announcem|||amount of|||guarantee|ing for|
|object||limit|of signing||guarantee|period|||
||ents on|||guarantee|||has been|related|
||||agreement)||||||
||guarantee||||||fulfilled|parties|
||limit||||||||
|Particulars about guarantee of the Company for subsidiaries|||||||||
||Date of||||||||
||disclosure||||||||
||||||||Whether|Whether|
||of relevant||Date of making|Actual|||||
||||||||the|guarantee|
|Name of guarantee|announcem|Amount of|guarantee (date|amount of|Type of|Guarantee|||
||||||||guarantee|ing for|
|object|ents on|guarantee|of signing|guarantee|guarantee|period|||
||||||||has been|related|
||guarantee||agreement)||||||
||||||||fulfilled|parties|
||limit||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||From the|||
|||||||date of|||
|||||||implementin|||
||||||Guarantee of|g loan within|||
|Lu Feng Weaving &|13 May||||joint and|credit line to|||
|||30,000|10 May 2011|343.76|||No|Yes|
|Dyeing Co., Ltd.|2011||||several|the date of|||
||||||liability|clearing off|||
|||||||loan|||
|||||||principal and|||
|||||||interest|||
|||||||Two years|||
||||||Guarantee of||||
|||||||since the|||
|Lu Thai (Hong Kong)|27 Mar.||||joint and||||
|||18,300|25 Mar. 2014|1,560.74||approval of|No|Yes|
|Textile Co., Ltd.|2014||||several||||
|||||||the board of|||
||||||liability||||
|||||||the Company|||
|||||||Three year|||
||||||Guarantee of||||
|||||||since the|||
|Lufeng Weaving &|10 Dec.||||joint and||||
|||25,000|9 Dec. 2014|0||approval of|No|Yes|
|Dyeing Co., Ltd.|2014||||several||||
|||||||the board of|||
||||||liability||||
|||||||the Company|||
|||||||Two years|||
||||||Guarantee of||||
|||||||since the|||
|Lu Thai (Vietnam)|27 Aug.||||joint and||||
|||36,681.6|26 Aug. 2015|8,703.62||approval of|No|Yes|
|Textile Co., Ltd.|2015||||several||||
|||||||the board of|||
||||||liability||||
|||||||the Company|||
|||||Total amount of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries|||||
|guarantee for subsidiaries during||36,681.6||||10,264.36|||
|||||during the reporting period|||||
|the reporting period (B1)|||||||||
|||||(B2)|||||
|||||Total amount of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||109,981.6||||9,047.38|||
|||||the end of the reporting|||||
|end of the reporting period (B3)|||||||||
|||||period (B4)|||||
|Guarantees provided by subsidiaries for subsidiaries|||||||||
||Disclosure||||||||
||date on|||||||Guarante|
||||Actual||||||
||relevant|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|announcem|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||ent of|||amount||||party or|
||||agreement)||||||
||guaranteed|||||||not|
||amount||||||||
|Xinjiang Lu Thai|9 Sep. 2015|10,000|8 Sep. 2015|5,000|Guarantee of|12 months|No|Yes|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|Textile Co., Ltd.|||||joint and||||
||||||several||||
||||||liability||||
||||||Guarantee of||||
|Xinjiang Lu Thai|10 Dec.||||joint and||||
|||10,000|8 Dec. 2015|||1 months|No|Yes|
|Textile Co., Ltd.|2015||||several||||
||||||liability||||
|||||Total actual occurred|||||
|Total guarantee line approved for|||||||||
|||||amount of guarantee for the|||||
|the subsidiaries during the||20,000||||5,000|||
|||||subsidiaries during the|||||
|reporting period (C1)|||||||||
|||||reporting period (C2)|||||
|||||Total actual guarantee|||||
|Total guarantee line that has been|||||||||
|||||balance for the subsidiaries|||||
|approved for the subsidiaries at the||20,000||||5,000|||
|||||at the end of the reporting|||||
|end of the reporting period (C3)|||||||||
|||||period (C4)|||||
|Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)|||||||||
|||||Total actual occurred|||||
|Total guarantee line approved|||||||||
|||||amount of guarantee during|||||
|during the reporting period||56,681.6||||15,264.36|||
|||||the reporting period|||||
|(A1+B1+C1)|||||||||
|||||(A2+B2+C2)|||||
|||||Total actual guarantee|||||
|Total guarantee line that has been|||||||||
|||||balance at the end of the|||||
|approved at the end of the||129,981.6||||14,047.38|||
|||||reporting period|||||
|reporting period (A3+B3+C3)|||||||||
|||||(A4+B4+C4)|||||
|Proportion of total guarantee amount (A4+B4+C4) to the net|||||||||
|||||2.05%|||||
|assets of the Company|||||||||
|Of which:|||||||||
|Amount of guarantee provide for shareholders, actual controller|||||||||
|||||0|||||
|and related parties (D)|||||||||
|Amount of guarantee provided directly or indirectly for guarantee|||||||||
|||||0|||||
|objects with asset-liability ratio reaching over 70% (E)|||||||||
|Balance between 50% of net assets and total amount of guarantee|||||||||
|||||0|||||
|which exceeds 50% of net assets (F)|||||||||
|Sum total of the above three guaranteed amounts (D+E+F)||||0|||||
|||||According to “Agreement on Counter Guarantee” signed on 12|||||
|||||May 2011 between Lu Thai Company and Lu Feng Company,|||||
|Explanations about joint and several liability for repayment in||||Lu Feng Company, the warrantee Lu Feng Company provided|||||
|respect of undue guarantee (if any)||||the corresponding amount of counter guarantee for Lu Thai|||||
|||||Company. According to “Agreement on Counter Guarantee”|||||
|||||signed on 9 Dec. 2014 between Lu Thai Company and Xinjiang|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
||Lu Thai Company, Xinjiang Lu Thai Company, the warrantee|
||Xinjiang Lu Thai Company provided the corresponding amount|
||of counter guarantee for Lu Thai Company.|
|Explanation about external guarantee violating established|The Company never provided guarantees for companies except|
|procedure (if any)|controlling subsidiaries.|

Explanations about guarantees provided with complex methods
(2) Particulars about illegal external guarantee
□ Applicable√ Inapplicable
There was no particular about illegal external guarantee of the Company in the reporting period.
3. Cash assets management entrustment
(1) Wealth management entrustment
□ Applicable√ Inapplicable
No such situation of the Company during the reporting period.
(2) Entrustment loans
□ Applicable√ Inapplicable
No such situation of the Company during the reporting period.
4 Other significant contracts
□ Applicable√ Inapplicable
No such situation of the Company during the reporting period.
XVIII. Other significant events
√ Applicable□ Inapplicable
On 5 Aug. 2015, the Company held the 2015 1st Extraordinary General Meeting, which reviewed and approved the Proposal on Repurchasing Part of the A Share and B Share of the Company and had public disclosed the Report of Repurchasing Part of the A Share and B Share of the Company on 10 Oct. 2015 and as for the details, please refer to theCompany’s announcement (No.: 2015-029) and the report of the shares repurchasing that be disclosed on www.cninfo.com.cn respectively on 6 Aug. 2015 and 10 Oct. 2015. Since 10 Nov. 2015, the Company began to execute the repurchasing proposal and up to 31 Dec. 2015, the Company had accumulatively repurchased the B Share of 1.3506 million shares and as for the specific situation of the event, please refer to theCompany’s announcement (No.: 2016-001) that be be disclosed on www.cninfo.com.cn on 5 Jan. 2016.
XIX. Significant events of subsidiaries
□ Applicable√ Inapplicable
2015 Annual Report of Lu Thai Textile Co., Ltd. XX. Social responsibilities
√ Applicable□ Inapplicable
The Company had compiled the 2015 Social Responsibilities Report and as for the details, please refer to the Social Responsibilities Report that be disclosed at the same time with the 2015 Annual Report of the Company.
Does the listed company or its subsidiaries belong to the heavily polluting industries stipulated by the environmental protection authorities of the country?
√ Yes□ No□ Inapplicable
The major pollutant emission of the Company reached the Water Quality Standards of the Sewage Discharged into Urban Sewage CJ343-2010 with the sewage discharged into the Zibo Limin Purified Water Co., Ltd., of which the effluent quality was higher than the national level A discharge standards as well as the major pollutant had completely realized the up-to-standard release with the total volume of the COD emission gradually declined. The Company constantly invested and improved the environmental protection facilities according to the requirements of the customers and the government and the development strategies, and in 2015, the Company invested and completed the water reuse project as well as realized the reutilization of the water resources with each environmental indicators higher than that of the companies in the same industry. The Company vigorously promoted the cleaning production and did well in the Company environmental protection according to the mode of source control, process governance, and end treatment. And the Company will upload the testing index of the major pollutant on the website of ZHB for publicity monthly according to the EIDM (trial). The Company will constantly improve the environmental pollution accident emergency preplan and will compile the plan for executing the emergency exercise. The Company received the title of “National Water Conservation Benchmarking Enterprise” successively by the MIIT and the MWR in 2015 and be evaluated as the “Energy Saving Outstanding Enterprise in Shandong Province” by Shandong Government.
XXI. Corporation bonds
There was no corporation bond public issued and listed in Stock Exchange and maturity or maturity but not fully paid on the approval report date of annual report of the Company.
2015 Annual Report of Lu Thai Textile Co., Ltd. Section VI. Change in Shares& Shareholders
I. Changes in shares
I. Changes in shares
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease (+/-)|||||After the change||
||||||Capitaliza|||||
||||Newly|||||||
|||Proportio||Bonus|tion of||||Proportio|
||Amount||issue|||Other|Subtotal|Amount||
|||n||shares|public||||n|
||||share|||||||
||||||reserves|||||
||119,553,9|||||||119,398,4||
|I. Restricted shares||12.51%||||-155,423|-155,423||12.49%|
||13|||||||90||
|3. Shares held by other||||||||||
||1,321,513|0.14%||||-155,423|-155,423|1,166,090|0.12%|
|domestic corporations||||||||||
|Shares held by domestic||||||||||
||1,321,513|0.14%||||-155,423|-155,423|1,166,090|0.12%|
|natural persons||||||||||
|4. Shares held by foreign|118,232,4|||||||118,232,4||
|||12.37%|||||||12.37%|
|investors|00|||||||00||
|Among which: Shares held|118,232,4|||||||118,232,4||
|||12.37%|||||||12.37%|
|by foreign corporations|00|||||||00||
|Shares held by foreign natural|836,204,5|||||||836,360,0||
|||87.49%||||155,423|155,423||87.51%|
|persons|83|||||||06||
||560,643,7|||||||560,799,2||
|||58.66%||||155,423|155,423||58.68%|
|II. Non-restricted shares|87|||||||10||
||275,560,7|||||||275,560,7||
|||28.83%||||0|0||28.83%|
|1. Renminbi ordinary shares|96|||||||96||
|2. Domestically listed foreign|955,758,4|||||||955,758,4||
|||100.00%||||0|0||100.00%|
|shares|96|||||||96||

Reasons of changes in shares
√ Applicable□ Inapplicable
The “Shares subject to trading moratorium-shares held by domestic individuals” decreased 155,423 shares owning to the resignation of the former Supervisory Board Chairman Zhu Lingwen that the shares had been unlocked and the adjustment on the locked shares of the Senior Executives by the Shenzhen Branch of CSDCC at the year-begin.
Approval of share changes
□ Applicable√ Inapplicable
Transfers in share changes
2015 Annual Report of Lu Thai Textile Co., Ltd.□ Applicable√ Inapplicable
Influence of share changes towards financial indexes in the latest year and latest period such as basic EPS and diluted EPS, and net assets per share belonging to shareholder with ordinary share
□ Applicable√ Inapplicable
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
□ Applicable√ Inapplicable
2. Changes in restricted shares
√ Applicable□ Inapplicable
Unit: share
||||||||
|-|-|-|-|-|-|-|
|||Number of the|Number of the||||
||Number of the||||||
|||restricted shares|restricted shares|Number of the|||
||restricted shares||||||
|Name||unlocked during|increased during|restricted shares|Reason|Unlocked date|
||at the||||||
|||the reporting|the reporting|at the period-end|||
||period-begin||||||
|||period|period||||
||||||Locked the||
|Qin Guiling (Lu|||||shareholding of||
||46,989|11,747||35,242||5 Jan. 2015|
|Thai A)|||||the Senior||
||||||Executives||
||||||Locked the||
|Lv Yongchen (Lu|||||shareholding of||
||45,000|11,250||33,750||5 Jan. 2015|
|Thai A)|||||the Senior||
||||||Executives||
||||||Locked the||
|Wang Changzhao|||||shareholding of||
||22,500|5,625||16,875||5 Jan. 2015|
|(Lu Thai A)|||||the Senior||
||||||Executives||
||||||Locked the||
|Wang Fangshui|||||shareholding of||
||95,653|23,913||71,740||5 Jan. 2015|
|(Lu Thai A)|||||the Senior||
||||||Executives||
||||||Locked the||
|Zhang Jianxiang|||||shareholding of||
||45,000|11,250||33,750||5 Jan. 2015|
|(Lu Thai A)|||||the Senior||
||||||Executives||
||||||Locked the||
|Zhu Lingwen (Lu|||||shareholding of||
||91,638|91,638||0||27 Mar. 2015|
|Thai A)|||||the resigned||
||||||Supervisors||
|Total|346,780|155,423|0|191,357|--|--|

2015 Annual Report of Lu Thai Textile Co., Ltd. II. Issuance and listing of securities
1. Issuance of securities (excluding preferred stock) in reporting period
□ Applicable√ Inapplicable
2. Explanation on changes in share capital& the structure of shareholders, the structure of assets and liabilities
□ Applicable√ Inapplicable
3. Existent shares held by internal staffs of the Company
□ Applicable√ Inapplicable
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: share
||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Total number of|||
|||||||||||||preferred|||
|||||||||||||stockholder with|||
||||Total number of||||Total number of||||||||
|||||||||||||vote right|||
|Total number|||shareholders on||||preferred||||||||
|||||||||||||restored on the|||
|of shareholders|||the 30th trading||||stockholder with||||||||
||72,743||||70,414|||||0||30th trading day||0|
|at the reporting|||day before the||||vote right restored||||||||
|||||||||||||before the|||
|period|||disclosure date of||||(if any) (see notes||||||||
|||||||||||||disclosure date of|||
||||the annual report||||8)||||||||
|||||||||||||the annual report|||
|||||||||||||(if any) (see|||
|||||||||||||notes 8)|||
|Shareholding of shareholders holding more than 5% shares|||||||||||||||
||||||Number|Increase||Number|Number||Pledged or frozen shares||||
||||||of|and||of shares|of shares||||||
|||||Holding|sharehold|decrease||held|held not||||||
|Name of||Nature of|||||||||||||
|||||percentag|ing at the|of shares||subject to|subject to||||||
|shareholder||shareholders|||||||||Status of shares||Amount||
|||||e (%)|end of the|during||trading|trading||||||
||||||reporting|reporting||moratoriu|moratoriu||||||
||||||period|period||m|m||||||
|Zibo LuchengTextile InvestmentCo., Ltd.||Domesticnon-state-ownedcorporation||14.69%|140,353,583||||140,353,583||||||
|Tailun (Thailand)||Foreign||12.37%|118,232,4|0||118,232,4|||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|Textile Co., Ltd.|corporation||00||00||
|Central HuijinAssetsManagement Co.,Ltd.|State-ownedcorporation|2.13%|20,315,300|20,315,300||20,315,300|
|T.ROWE PRICEINTLDISCOVERYFUND|Foreigncorporation|1.99%|18,972,618|18,972,618||18,972,618|
|China SecuritiesFinanceCorporationLimited|State-ownedcorporation|1.64%|15,679,091|15679091||15,679,091|
|LYNAS ASIAFUND|Foreigncorporation|1.64%|15,664,475|-1700000||15,664,475|
|FIRST STATEINVESTMENTSICVC-FIRSTSTATE GREATERCHINA GROWTHFUND|Foreigncorporation|1.12%|10,714,368|10714368||10,714,368|
|Hua’an New SilkRoad ThemeEquity SecuritiesInvestment Fund|DomesticNon-stated-ownedcorporation|1.06%|10,110,000|10110000||10,110,000|
|VALUEPARTNERSCLASSIC FUND|Foreigncorporation|0.85%|8,156,383|0||8,156,383|
|First State China AShares Fund|Foreigncorporation|0.77%|7,382,120|-754852||7,382,120|
|Particulars about strategic investors or|||||||
|common legal persons who became|||||||
|the top ten shareholders because of the||N/A|||||
|issuance of additional shares (if any)|||||||
|(Notes 3)|||||||
|||Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder of the Company and|||||
|Explanations about associated||the actual controller. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder as|||||
|relationship or concerted action among||well as sponsor of foreign capital of the Company. All of other shareholders are people|||||
|the above shareholders||holding circulating A share or circulating B share and the Company is not able to confirm|||||
|||whether there is associated relationship or concerted action among other shareholders.|||||
|Shareholdings of the top ten shareholders not subject to trading moratorium|||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||
|-|-|-|-|
|||Type of shares||
|Name of shareholders|Name of shareholders|||
|||Type|Amount|
|Zibo Lucheng Textile Investment Co.,Ltd.|140,353,583|RMB common||
||||140,353,583|
|||shares||
|Central Huijin Assets ManagementCo., Ltd.|20,315,300|RMB common||
||||20,315,300|
|||shares||
|T.ROWE PRICE INTL DISCOVERYFUND|18,972,618|Domestically||
|||listed foreign|18,972,618|
|||shares||
|China Securities Finance CorporationLimited|15,679,091|RMB common||
||||15,679,091|
|||shares||
|LYNAS ASIA FUND|15,664,475|Domestically||
|||listed foreign|15,664,475|
|||shares||
|FIRST STATE INVESTMENTSICVC-FIRST STATE GREATERCHINA GROWTH FUND|10,714,368|Domestically||
|||listed foreign|10,714,368|
|||shares||
|Hua’an New Silk Road Theme EquitySecurities Investment Fund|10,110,000|RMB common||
||||10,110,000|
|||shares||
|VALUE PARTNERS CLASSICFUND|8,156,383|Domestically||
|||listed foreign|8,156,383|
|||shares||
|First State China A Shares Fund|7,382,120|RMB common||
||||7,382,120|
|||shares||
|HTHK-MANULIFE CHINA VALUEFUND|6,858,138|Domestically||
|||listed foreign|6,858,138|
|||shares||
|Explanation about associated||||
|relationship and concerted action|Zibo Lucheng Textile Investment Co., Ltd. is the largest shareholder of the Company and|||
|among the top ten shareholders not|the actual controller. Tailun (Thailand) Textile Co., Ltd. is the second largest shareholder as|||
|subject to trading moratorium as well|well as sponsor of foreign capital of the Company. All of other shareholders are people|||
|as between the top ten shareholders|holding circulating A share or circulating B share and the Company is not able to confirm|||
|not subject to trading moratorium and|whether there is associated relationship or concerted action among other shareholders.|||
|the top ten shareholders||||
|Particulars about the top 10 common||||
|shareholders participating in margin|N/A|||
|trading (if any) (Notes 4)||||

Did any shareholder of the Company carry out an agreed buy-back in the reporting period?
□ Yes√ No
No shareholder of the Company carried out any agreed buy-back in the reporting period.
2015 Annual Report of Lu Thai Textile Co., Ltd. 2. Particulars about controlling shareholders of the Company
Nature of controlling shareholder: community collective holding
Type of controlling shareholder: corporation
||||||
|-|-|-|-|-|
|Name of controlling|Legal representative||||
|||Date of establishment|Organization code|Business scope|
|shareholder|/ company principal||||
|||||Investment on textile,|
|Zibo Lucheng Textile||||electricity and chemical;|
||Liu Shizhen|25 Sep. 1998|16420039-1||
|Investment Co., Ltd.||||purchase, process and sale|
|||||of cotton; retail service etc.|
|Particulars about shareholding|||||
|of controlling shareholders|||||
|controlling and holding shares|N/A||||
|of other listed companies|||||
|during the reporting period|||||

Changes in controlling shareholders during the reporting period
□ Applicable√ Inapplicable
There was no change in controlling shareholders during the reporting period of the Company.
3. Particulars about the actual controller
Nature of actual controller: domestic nature person
Type of actual controller: nature person
||||
|-|-|-|
|||Whether gain the right of residence in other countries or|
|Name of the actual controller|Nationality||
|||regions or not|
|Liu Shizhen|China|No|
|Professions and titles over the past five years|Chairman of the Board of Lu Thai Textile Co., Ltd.||
|Particulars about listed companies with|||
|shares ever held by the actual controller over|N/A||
|the past 10 years|||

Changes in the actual controller during the reporting period
□ Applicable√ Inapplicable
There was no change in the actual controller during the reporting period of the Company.
Block diagram of property rights and controlling relationship between the Company and the actual controller
2015 Annual Report of Lu Thai Textile Co., Ltd. Liu Shizhen
21%
Zibo Lucheng Textile Investment Co., Ltd.
14.69%
Lu Thai Textile Co., Ltd.
The actual controller controls the company in the means of entrustment or other means of assets management□ Applicable√ Inapplicable
4. Particulars about other corporate shareholders with shareholding proportion over10%
□ Applicable√ Inapplicable
5. Particulars about restriction of reducing holding-shares of controlling shareholders, actual controller, restructuring parties and other commitment entities
□ Applicable√ Inapplicable
2015 Annual Report of Lu Thai Textile Co., Ltd. Section VII. Preference Shares
□ Applicable√ Inapplicable
There was no preferred stock during reporting period.
2015 Annual Report of Lu Thai Textile Co., Ltd. Section VIII. Directors, Supervisors, Senior Management Staff& Employees
I. Changes in shareholding of directors, supervisors and senior management staff
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||Shares|||||
||||||||||||Shares|
||||||||held at|Increase|Decrease|||
|||||||||||Other|held at|
||||||Starting|Closing|the|of shares|of shares|||
|||||||||||increase/d|the end of|
|||Incumben|||date of|date of|beginning|in this|in this|||
|Name|Title||Gender|Age||||||ecrease|the|
|||t or not|||office|office|the|reporting|reporting|||
|||||||||||changes|reporting|
||||||term|term|reporting|period|period|||
|||||||||||(share)|period|
||||||||period|(share)|(share)|||
||||||||||||(share)|
||||||||(share)|||||
||Director/|||||||||||
|||Incumben|||6 Jun.|5 Jun.||||||
|Liu Zibin|General||Male|51|||148,290||||148,290|
|||t|||2007|2016||||||
||Manager|||||||||||
||Chairman|||||||||||
|Liu||Incumben|||19 Aug.|5 Jun.||||||
||of the||Male|76|||437,295||||437,295|
|Shizhen||t|||1997|2016||||||
||Board|||||||||||
||Vice|||||||||||
|Xu|Chairman|Incumben|||6 May|5 Jun.||||||
||||Male|86||||||||
|Zhinan|of the|t|||2004|2016||||||
||Board|||||||||||
||Director/|||||||||||
|Fujiwara|Senior|Incumben|||7 May|5 Jun.||||||
||||Male|76||||||||
|Hidetoshi|Consultan|t|||1998|2016||||||
||t|||||||||||
|Chen||Incumben|||16 Apr.|5 Jun.||||||
||Director||Male|72||||||||
|Ruimou||t|||2000|2016||||||
|Zeng||Incumben|||6 Jun.|5 Jun.||||||
||Director||Male|65||||||||
|Facheng||t|||2007|2016||||||
||Director/|||||||||||
|Wang||Incumben|||7 May|5 Jun.||||||
||Chief||Male|55|||151,353||4,600||146,753|
|Fangshui||t|||1998|2016||||||
||Engineer|||||||||||
||Director/|||||||||||
|Qin|Secretary|Incumben|||7 May|5 Jun.||||||
||||Female|50|||108,789||1,747||107,042|
|Guiling|to the|t|||1998|2016||||||
||Board of|||||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Vice||||||||||
||General||||||||||
||Manager||||||||||
||Independ||||||||||
|Zhou||Incumben|||5 Jun.|5 Jun.|||||
||ent||Male|53|||||||
|Zhiji||t|||2010|2016|||||
||Director||||||||||
||Independ||||||||||
|||Incumben|||5 Jun.|5 Jun.|||||
|Wang Lei|ent||Female|46|||||||
|||t|||2010|2016|||||
||Director||||||||||
||Independ||||||||||
|Xu||Incumben|||6 Jun.|5 Jun.|||||
||ent||Male|42|||||||
|Jianjun||t|||2013|2016|||||
||Director||||||||||
||Independ||||||||||
|Zhang||Incumben|||29 Apr.|5 Jun.|||||
||ent||Male|65|||||||
|Chengzhu||t|||2014|2016|||||
||Director||||||||||
||Independ||||||||||
|||Incumben|||19 Sep.|5 Jun.|||||
|Zhao Yao|ent||Male|46|||||||
|||t|||2014|2016|||||
||Director||||||||||
||Superviso||||||||||
|Li||Incumben|||19 Sep.|5 Jun.|||||
||ry Board||Male|60|||176,164|||176,164|
|Tongmin||t|||2014|2016|||||
||Chairman||||||||||
|Liu|Superviso|Incumben|||6 Jun.|5 Jun.|||||
||||Male|48|||||||
|Zilong|r|t|||2007|2016|||||
|Dong|Superviso|Incumben|||6 Jun.|5 Jun.|||||
||||Male|47|||5,000|||5,000|
|Shibing|r|t|||2007|2016|||||
||Vice||||||||||
|Zhang||Incumben|||6 Jun.|5 Jun.|||||
||General||Male|48|||63,400||11,250|52,150|
|Jianxiang||t|||2007|2016|||||
||Manager||||||||||
||Chief||||||||||
|Zhang||Incumben|||6 Jun.|5 Jun.|||||
||Accounta||Female|46|||88,100|4,400||92,500|
|Hongmei||t|||2007|2016|||||
||nt||||||||||
||Assistant||||||||||
||General||||||||||
|Wang|Manager,|Incumben|||6 Jun.|5 Jun.|||||
||||Male|53|||83,700|||83,700|
|Jiabin|Productio|t|||2007|2016|||||
||n||||||||||
||Manager||||||||||
||Assistant||||||||||
|Zhang|General|Incumben|||6 Jun.|5 Jun.|||||
||||Male|46|||83,100||10,000|73,100|
|Shougang|Manager,|t|||2007|2016|||||
||Garment||||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Division|||||||||
||Manager|||||||||
||Assistant|||||||||
||General|||||||||
||Manager,|||||||||
||Deputy|||||||||
|Zhang|General|Incumben|||6 Jun.|5 Jun.||||
||||Male|44|||80,300||80,300|
|Zhanqi|Manager|t|||2007|2016||||
||of Lufeng|||||||||
||Weaving|||||||||
||& Dyeing|||||||||
||Co., Ltd.|||||||||
||Manager|||||||||
|Zhang|of|Incumben|||6 Jun.|5 Jun.||||
||||Male|48|||95,200|17,500|77,700|
|Keming|Financial|t|||2007|2016||||
||Dep.|||||||||
||Manager|||||||||
||of|||||||||
|Pan|Internatio|Incumben|||6 Jun.|5 Jun.||||
||||Male|48|||126,096||126,096|
|Pingli|nal|t|||2007|2016||||
||Business|||||||||
||Dep. III|||||||||
||Deputy|||||||||
||General|||||||||
||Manager|||||||||
|Lv||Incumben|||6 Jun.|5 Jun.||||
||of Lufeng||Male|48|||52,900|19,150|33,750|
|Yongchen||t|||2007|2016||||
||Weaving|||||||||
||& Dyeing|||||||||
||Co., Ltd.|||||||||
||Manager|||||||||
|Yu||||||||||
||of Energy|Incumben|||6 Jun.|5 Jun.||||
|Shouzhen|||Male|48|||83,100||83,100|
||Business|t|||2007|2016||||
|g||||||||||
||Dep.|||||||||
||Marketin|||||||||
|Quan||Incumben|||6 Jun.|5 Jun.||||
||g||Male|49|||37,000|9,250|27,750|
|Peng||t|||2013|2016||||
||Manager|||||||||
||Manager|||||||||
||of the|||||||||
|Wang||||||||||
||First|Incumben|||6 Jun.|5 Jun.||||
|Changzha|||Male|42|||22,500||22,500|
||Departme|t|||2013|2016||||
|o||||||||||
||nt of|||||||||
||Internatio|||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||nal||||||||||
||Business||||||||||
||Manager||||||||||
||of the||||||||||
|Fujiwara|Second||||||||||
|Matsuzak|Departme|Incumben|||9 Dec.|5 Jun.|||||
||||Male|43|||||||
|a|nt of|t|||2014|2016|||||
||Internatio||||||||||
||nal||||||||||
||Business||||||||||
||Manager||||||||||
||of||||||||||
||Enterprise||||||||||
|Shang|||||||||||
||s|Incumben|||6 Jun.|5 Jun.|||||
|Chenggan|||Male|43|||30,000|||30,000|
||Managem|t|||2013|2016|||||
|g|||||||||||
||ent||||||||||
||Departme||||||||||
||nt||||||||||
|Total|--|--|--|--|--|--|1,872,287|4,400|73,497|1,803,190|

 II. Particulars about changes of Directors, Supervisors and Senior Executives
||||||
|-|-|-|-|-|
|Name|Position|Type|Date|Reason|
|||||Proposed to resign from the position of Chairman of the|
|||||Board to the Board of the Directors on 28 Oct. 2015|
||Chairman of the|||while still acted as the Director of the Company and be|
|Liu Shizhen||Former|28 Oct. 2015||
||Board|||nominated as the committee members and the Chairman|
|||||of the Strategic Decision-making Committee and the|
|||||Compensation Committee member.|
|||||Be selected as the Chairman of the Board of the 7th Board|
||Chairman of the|Appointed and|||
|Liu Zibin|||28 Oct. 2015|of the Directors through the 26th Session of the 7th Board|
||Board|dismissed|||
|||||of the Directors.|

III. Resumes of important personnel
Main working experience of current directors, supervisors and senior management staff
1. Mr. Liu Zibin: Director and concurrently General Manager of the Company. He was born in 1965, and achieved Master Degree. From Oct. 2004 to Jun. 2007, he acted as Chairman of the Board of Zibo Lucheng Textile Investment Co., Ltd, now concurrently was Chairman of the Board of Xinsheng Power, Luqun Textile, Xinjiang Lu Thai and the President of Lu Thai (America), Director of Beijing Innovative, Supervisory Board Chairman of Beijing Lu Thai Youxian and GM of Shanghai Lu Thai.
2. Mr. Liu Shizhen: Chairman of the Board. He was born in 1940, graduated from technical secondary school. From Oct. 1993 to Jun.
2007, he was Chairman of the Board and General Manager of the Company; from Jun. 2007 to Oct. 2015, he acted as Chairman of
2015 Annual Report of Lu Thai Textile Co., Ltd. the Board of the Company. He now acts as the Chairman of the Board of Lucheng Company, Lu Feng Textile and Beijing Innovative, Director of Xinsheng Power, Luqun Textile and Hong Kong Textile (Lu Thai), Chairman of the Board of Stanluian and Taimei Tie Company.
3. Mr. Xu Zhinan: Vice Chairman of the Board of the Company. He was born in 1930, Thailand Nationality. Since 2004, he has been acting as Director and Vice Chairman of the Board of the Company, and General Manager of Tailun (Thailand) Textile Co., Ltd. 4. Mr. Fujiwara Hidetoshi: Director of the Company. He was born in 1940, Japanese Nationality. Since 1998, he has been holding post of Director and Senior Consultant of Lu Thai Company, and concurrently was Director of Lufeng Weaving& Dyeing Co., Ltd. 5. Mr. Chen Ruimou: Director of the Company. He was born in 1944, and holder of bachelor degree. From 1998 to now, he has been Director of the Company.
6. Mr. Zeng Facheng, Director of the Company, was born in 1951, Thailand nationality. He acts as Chairman of the Board of GOLD MINE GARMENT CO., LTD. and BLOSSOM GARMENT MANUFACTURING (THAILAND) CO., LTD.
7. Mr. Wang Fangshui: Director, Vice General Manager and Chief Engineer of the Company. He was born in 1961, holder of MBA degree. Since 1998, he has been Director and Chief Engineer of the Company, and concurrently is Director and General Manager of Lufeng Weaving& Dyeing, Director of Xinjiang Lu Thai and Director of Luqun Textile as well as the Executive Director of Lu Thai (Burma).
8. Ms. Qin Guiling: Director, Vice General Manager and Secretary to the Board of the Company. She was born in 1966, holder of MBA degree. Since 1998, she has been Director and Secretary to the Board of the Company, and Director of Beijing Lu Thai Youxian, Supervisory Board Chairman of Xinjiang Lu Thai, Director of Luqun Textile, and Director of Beijing Innovative.
9. Mr. Zhou Zhiji, Independent Director of the Company, was born in 1963 and holder of bachelor degree of accounting. From Aug. 1986 to Jan. 1989, he has acted as cadre of Shandong Provincial Department of Finance; from Jan. 1989 to Jan. 1999, he took the post as Director of Shandong Certified Public Accountants Co., Ltd; from Jan. 1999 to Jul. 2000, he was Director Accountant in Shandong Zhengyuan Certified Public Accountants Co., Ltd; from Jul. 2000 to Jan. 2008, he was Director and Mmanager of Shandong Yingshida Enterprise Management Consulting Co., Ltd. Since Jan. 2008 to now, he was Executive Director and Manager of Shandong Jinheng Consulting Co., Ltd.
10. Ms. Wang Lei, Independent Director of the Company, was born in 1970 and doctor degree holder. From Jul. 1994 to Sep. 2001, he was an assistant to General Manager of Investment Bank Department in Tiantong Securities Co., Ltd; from Sep. 2001 to Nov. 2004, he took the post as General Manager of Liaocheng Business Department of Tiantong Securities; since Nov. 2004 up to now, he has been General Manager of Chaowai Street Operating Department of Tiantong Securities; from Apr. 2005 to Dec. 2006, he was the General Manager of Investment Bank Department of Tiantong Securities; from Jan. 2009 to Jun. 2011, he was the General Manager of Beijing United Cooperation Center as well as Chaowai Street Operating Department in Qilun Securities Co., Ltd.; from Jun. 2011 to now, he has been the General Manager of OTC Marketing Department, and concurrently Director of Beijing United Cooperation Center as well as General Manager of SME Financing Department in Qilun Securities Co., Ltd.
11. Xu Jianjun: Independent Director of the company, born in 1974, master degree holder. Once took the post of Senior Staff Member of Head Office of Bank of China, Legal Counsel, lawyer at Beijing Jingtian Gongsheng Law Firm. From August of 2004 up to now, serves as a partner of Beijing Deheng Law Firm. Now he is taking a post of partner and Deputy Director of Beijing Deheng Law Firm.
12. Mr. Zhang Chengzhu: Independent Director of the Company, born in 1951, senior economist. Once took the post of Principal Staff Member, Deputy Director of Production System Department and Department Head of Structural Reforms commission of Shangdong Province from 1986 to 1996; as Department Head of Distribution Department of Shandong Securities Management Office from 1996 to 1998; as Department Head of CSRC Jinan Securities Management Office, Department Head of General Office, Associate Counsel, Senior Vice Chairman of Shandong Listed Companies Association; and retired in Mar. 2011.
13. Mr. Zhao Yao: Independent Director of the Company, born in 1970, master degree holder, associate professor of accounting, master tutor and successively acted as member of a council of Accounting Association in Shandong Province, executive member of
the council of Shandong Province Institute of CPAs, member of Shandong Province internal control consultant experts, member of
2015 Annual Report of Lu Thai Textile Co., Ltd. Shandong Province accounting criterion consultant experts and currently act as Director of Department of Accounting of Shandong University of Technology.
14. Mr. Li Tongmin: Supervisory Board Chairman of the Company, born in 1956, graduated from technical secondary school and currently as the Union President of the Company. From Oct. 1993 to 2010, he held the post of Supervisor, Manager of production department and Vice General Manager of the Company.
15. Mr. Liu Zilong: Supervisor of the Company. He was born in 1968. From 2002 to present, he was General Manager of Lu Thai (Hong Kong).
16. Mr. Dong Shibing: Supervisor of the Company. He was born in 1969, graduated from technical secondary school. He ever took the post of Deputy Director of the General Manager Office of the Company, and now holds post of Manager of Property Management Company.
17. Mr. Zhang Jianxiang: Vice General Manager and Vice-president of Lu Thai Textile Garment Engineering Research Institute as well as office director. He was born in 1968, and MBA degree holder. He once worked as Manager of Quality Management Department and Director of Fabric Finishing Plant.
18. Ms. Zhang Hongmei: Chief Accountant. She was born in 1970; holder of MBA degree and senior accountant. She had served successively as Chief of cost section of financial department of Lu Thai Textile Co., Ltd., director of the accounting department and deputy chief accountant. Now she serves as Chief Accountant of the Company.
19. Mr. Wang Jiabing: General Manager Assistant and Manager of Production Department of the Company, head of security checkpoint of production department. He was born in 1963, MBA and once acted as Manager of Dyeing Business Department. 20. Mr. Zhang Shougang: Assistant General Manager, Garment Division Manager of the Company. He was born in 1970, MBA and senior engineer, once was Director of Weaving Factory, Manager of Weaving Business Department and Manager of Quality Control Department in the Company.
21. Mr. Zhang Zhanqi: General Manager Assistant and deputy General Manager in Lufeng Weaving& Dyeing of the Company. He was born in 1972, MBA, once worked as Director of Fabric Finishing Plant and Manager of Quality Control Department.
22. Mr. Zhang Keming: Manager of Financial Department of the Company. He was born in 1968, MBA and senior accountant. From 2002 to 2006, he held the post of Deputy Manager of Financial Department; from Apr. 2006 to present, he has acted as General Manager of Financial Department.
23. Mr. Pan Pingli: Manager of International Business Department II. He was born in 1968 and MBA degree holder. He ever acted as General Manager of International Business Department of the Company.
24. Mr. Lv Yongchen: Deputy General Manager of Lufeng Weaving and Dyeing Co., Ltd. He was born in 1968 and MBA degree holder. From 2002 to 2010, he acted as Deputy Manager of International Business Department in the Company.
25. Mr. Yu Shouzheng: Energy Business Manager of the Company. He was born in 1968, MBA degree holder and engineer. He once worked as Director of Dynamic Department in the Company. From 2007 to present, he has acted as Manager of Energy Business Department in the Company.
26. Mr. Quan Peng: Marketing Manager of the Company. He was born in 1967, MBA degree holder. From 2004 to prese nt, he has acted as Marketing Manager.
27. Mr. Wang Changzhao: General Manager of International Business Department I of the Company. He was born in 1974 and had acted as General Manger Assistant of International Business Department.
28. Mr. Fujiwara Matsuzaka: General Manager of International Business Department II of the Company. He was born in 1973 and had acted as General Manager of International Business Department I of the Company.
29. Mr. Shang Chenggang: Manager of Enterprise Management Department and Management Representative. He was born in 1973 and had acted as Vice President of General Manager Office and Present.
Employment inshareholders’ companies
2015 Annual Report of Lu Thai Textile Co., Ltd.√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
|||||ExpirationDate of tenure|Whether receiving|
|||Posts held inshareholders’companies|||subsidies and|
|Name of|||Start date of|||
||Name of shareholders’ companies||||remuneration in|
|employers|||tenure|||
||||||shareholders’|
||||||companies|
|||Chairman of||||
|Liu Shizhen|Zibo Lucheng Textile Investment Co., Ltd.|the Board of|28 Sep. 1998||No|
|||Directors||||
|||Chairman of||||
|Xu Zhinan|Tailun (Thailand) Textile Co., Ltd.|the Board of|29 Jan. 1985||No|
|||Directors||||
||Mr. Liu Shizhen is the legal representative of Zibo Lucheng Textile Investment Co., Ltd., holding 21% equities of|||||
|Explanations||||||
||Zibo Lucheng Textile Investment Co., Ltd. and he is the largest shareholder as well as the actual controller. Basic|||||
|about holding||||||
||information about Mr. Liu Shizhen: Chinese, no right of residence in other countries or regions. Mr. Xu Zhinan is|||||
|posts in||||||
||the sponsor of foreign capital of the Company, shareholder of Tailun (Thailand) Textile Co., Ltd. and Tailun|||||
|shareholders’||||||
||(Thailand) Textile Co., Ltd. is the second largest shareholder of the Company. Basic information about Mr. Xu|||||
|companies||||||
||Zhinan: Thai.|||||

Employment in other companies
√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
||||||Whetherreceivingsubsidies andremuneration inother companies|
|||Posts held in||||
|Name of|||Start date oftenure|Expiration Date||
||Name of other companies|shareholders’||||
|employers||||of tenure||
|||companies||||
||Beijing Sichuang Adornments Co., Ltd.,|C hairman of||||
|Liu Shizhen|Lu Thai (Hong Kong) Textile Co., Ltd.|the Board of|11 Jul. 2000||No|
||Lufeng Weaving & Dyeing Co., Ltd.|Directors||||
||Zibo Xinsheng Power Co., Ltd., Zibo Luqun|||||
||Textile Co., Ltd., Xinjiang Lu Thai Harvest|Director,||||
||Cotton Co., Ltd., Xinjiang Lu Thai Textile|Supervisor,||||
||Co., Ltd., Beijing Sichuang Adornments|Supervisory||||
|Liu Zibin|||7 Dec. 2015||No|
||Co., Ltd., Beijing Lu Thai Youxian|Board||||
||E-commerce Co., Ltd., Lu Thai (America)|Chairman,||||
||Textile Co., Ltd., Shanghai Lu Thai Textile|GM||||
||Garment Co., Ltd.|||||
||Xinjiang Lu Thai Harvest Cotton Co., Ltd.,|||||
||Xinjiang Lu Thai Textile Co., Ltd., Lufeng|||||
|Wang Yongshui|Weaving & Dyeing Co., Ltd. Zibo Luqun|Director|17 Jun. 2003||No|
||Textile Co., Ltd., Lu Thai (Burma) Textile|||||
||Co., Ltd.|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
|||Director,|||
||Beijing Lu Thai Youxian E-commerce Co.,||||
|||Supervisory|||
||Ltd., Xinjiang Lu Thai Harvest Cotton Co.,||||
|Qin Guiling||Board|17 Jun. 2003|No|
||Ltd., Zibo Luqun Textile Co., Ltd., Beijing||||
|||Chairman,|||
||Sichuang Adornments Co., Ltd.||||
|||Director|||
|||Executive|||
|Zhou Zhiji|Shandong Jinheng Consulting Co., Ltd.|Director,|1 Jan. 2008|Yes|
|||Manager|||
|||General|||
|||Manager and|||
|||Director of|||
||OTC Marketing Department of Qilun|Beijing|||
|Wang Lei|Securities Co., Ltd., SME Financing|United|1 Jun. 2011|Yes|
||Department in Qilun Securities Co., Ltd.|Cooperation|||
|||Center,|||
|||General|||
|||Manager|||
|Xu Jianjun|Beijing Deheng Law Offices|Partner|1 Aug. 2004|Yes|
|||Associate|||
|Zhao Yao|Shandong University of Technology||1 Mar. 2001|Yes|
|||Professor|||
|Explanations|||||
|about|||||
||Except independent directors, other companies directors, supervisors, senior executives are holding posts in are all||||
|employment in|||||
||controlling subsidiaries of the Company.||||
|other|||||
|companies|||||

Particulars about the Company's current directors, supervisors and senior executives‘punishments from Securities Regulatory Institution of recent three years in reporting period
□ Applicable√ Inapplicable
IV. Remuneration for directors, supervisors and senior management
Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior management
|||
|-|-|
|Decision-making|Remuneration committee under the board of directors is responsible for formulating assessment|
|procedures of|standards of directors and senior executives and conducting assessment; for formulating and reviewing|
|remuneration of directors,|remuneration policy and program of directors and senior executives; it is responsible for the board of|
|supervisors, senior|directors. The remuneration committee, according to appraisal results of position performance and|
|executives|motivation and restriction plan for senior executives, proposes amount of payment and methods of|
||reward for directors and senior executives and submits the above resolutions to the board of directors for|
||ratification after the approval by voting.|
|Determinate basis of|The Chief Accountant Office, the Corporate Management Department and the HR Department of the|
|remuneration of directors,|Company was responsible for preparations for the decision-making of the Remuneration and Appraisal|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
|supervisors, senior|Committee by providing relevant information of the Company as follows: (I) accomplishment of main|
|executives|financial and business objectives; (II) accomplishment of relevant indicators of other listed companies in|
||the sector; (III) work scope and main responsibilities of senior management staff.|
||The remuneration committee appraised directors and senior management staff according to the|
||completion situation of the Company’s performance and the annual appraisal results of senior|
||management staff were put forward according to the performance appraisal results and the senior staff|
||incentive and disciplinary plan. Upon approval by voting, the results were reported to the Board of|
||Directors for approval.|
|Actual payment of|The number of incumbent directors, supervisors and senior executives is 29, among which there are 28|
|remuneration of directors,|persons actually receiving remuneration from the Company. Till 31 Dec. 2015, the total amount of|
|supervisors, senior|annual payment drawn from the Company by directors, supervisors and senior executives is|
|executives|RMB22.4557 million (before tax).|

Remuneration of the directors, supervisors and senior management of the Company during the reporting period is as follow: Unit: RMB Thousand Yuan
||||||||
|-|-|-|-|-|-|-|
|||||||Whether gained|
||||||Total before-tax||
|||||||remuneration|
||||||remuneration||
|Name|Position|Gender|Age|Current/former||from the related|
||||||gained from the||
|||||||parties of the|
||||||Company||
|||||||Company|
||Director/General|||Incumbent|||
|Liu Zibin||Male|51||141.64|No|
||Manager||||||
||Chairman of the|||Incumbent||No|
|Liu Shizhen|Board of|Male|76||133.78||
||Directors||||||
||Vice chairman of|Male||Incumbent||No|
|Xu Zhinan|the Board of||86||30.85||
||Directors||||||
|Fujiwara|Director/Senior|Male||Incumbent||No|
||||76||387.5||
|Hidetoshi|Consultant||||||
|Chen Ruimou|Director|Male|72|Incumbent|30.85|No|
|Zeng Facheng|Director|Male|65|Incumbent|1.19|No|
||Director/Vice|Male||Incumbent||No|
|Wang Fangshui|Director/Chief||55||141.28||
||Engineer||||||
||Director/Vice Dir|||Incumbent||No|
|Qin Guiling|ector/ Chairman|Female|50||140.42||
||Secretary||||||
||Independent|||Incumbent||No|
|Zhou Zhiji||Male|53||4.8||
||Director||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||Independent|||Incumbent||No|
|Wang Lei||Female|46||4.8||
||Director||||||
||Independent|Male||Incumbent||No|
|Xu Jianjun|||42||4.8||
||Director||||||
||Independent|Male||Incumbent||No|
|Zhang Chengzhu|||65||||
||Director||||||
||Independent|Male||Incumbent||No|
|Zhao Yao|||46||4.8||
||Director||||||
||Supervisory|Male||Incumbent||No|
|Li Tongmin|||60||140.61||
||Board Chairman||||||
|Liu Zilong|Supervisor|Male|48|Incumbent|63.42|No|
|Dong Shibing|Supervisor|Male|47|Incumbent|61.88|No|
||Deputy General|Male||Incumbent||No|
|Zhang Jianxiang|||48||96.94||
||Manager||||||
|Zhang Hongmei|Chief Accountant|女|46|Incumbent|88.67|No|
||General Manager|Male||Incumbent||No|
||Assistant,||||||
|Wang Jiabin|Manager of||53||84.01||
||Production||||||
||Department||||||
||Assistant General|Male||Incumbent||No|
||Manager,||||||
|Zhang Shougang|||46||73.83||
||Garment Division||||||
||Manager||||||
||Assistant General|Male||Incumbent||No|
||Manager, Deputy||||||
||General Manager||||||
|Zhang Zhanqi|||44||75.5||
||of Lufeng||||||
||Weaving &||||||
||Dyeing Co., Ltd.||||||
||Manager of|Male||Incumbent||No|
|Zhang Keming|||48||61.61||
||Financial Dep.||||||
||Manager of|Male||Incumbent||No|
|Pan Pingli|International||48||61.89||
||Business Dep. III||||||
||Deputy General|Male||Incumbent||No|
||Manager of||||||
|Lv Yongchen|Lufeng Weaving||48||61.52||
||& Dyeing Co.,||||||
||Ltd.||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||Manager of|Male||Incumbent||No|
|Yu Shouzheng|Energy Business||48||61.35||
||Dep.||||||
||Marketing|Male||Incumbent||No|
|Quan Peng|||49||61.68||
||Manager||||||
||Manager of the|Male||Incumbent||No|
||First Department||||||
|Wang Changzhao|||42||59.99||
||of International||||||
||Business||||||
||Manager of the|Male||Incumbent||No|
||Second||||||
|Fujiwara|||||||
||Department of||43||106.26||
|Matsuzaka|||||||
||International||||||
||Business||||||
||Manager of|Male||Incumbent||No|
|Shang|Enterprises||||||
||||43||59.7||
|Chenggang|Management||||||
||Department||||||
|Total|--|--|--|--|2,245.57|--|

 Situations of equity incentives awarded to the directors, supervisors and senior management of the Company during the reporting period
□ Applicable√ Inapplicable
V. About employees
1. Number of the employees, component difference and educational background
|||
|-|-|
|Number of the serving employees of the parent company||
||16,653|
|(person)||
|Number of the serving employees of the major subsidiaries||
||5,792|
|(person)||
|Total number of the serving employees (person)|22,445|
|Total number of the employees receiving the salary of the||
||22,445|
|reporting period (person)||
|Number of the left and retired employees that the parent||
|company and the major subsidiaries should undertake the|0|
|expenses (person)||
|Component difference||
|Category|Number (person)|
|Production personnel|15,621|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
|Sales personnel|644|
|Technical personnel|5,714|
|Financial personnel|86|
|Administrative personnel|380|
|Total|22,445|
|Educational background||
|Category|Number (person)|
|Doctor|2|
|Master|80|
|Bachelor|988|
|College|5,555|
|High school and below|15,820|
|Total|22,445|

 2. Remuneration policy
The Company has formulated a remuneration management system with its principle being “payment according toone’s work and more pay for more work”. Through post evaluation and through researches of Social salary levels carried out as multi-faceted, as well as the formulation of the reasonable salary management system, fully demonstrates the internal fairness, self fairness and external fairness. It has greatly motivated the employees and enhanced the corporate management.
3. Training plan
Trainings will be carried out according to requirements of theCompany’s strategic development planning, improvement ofemployees’ capability, performance management,employees’ career planning, etc. The annual training plan is determined by carrying out researches on training needs. And the training courses fall into three major categories, i.e. management, technical skills and general knowledge. Through these trainings, the Company will improve the knowledge structure of its employees, improve their job skills and increase their comprehensive quality to provide excellent human resources for the long-term, sustained and stable development of the Company. 4. Labor outsourcing
□ Applicable√ Inapplicable
2015 Annual Report of Lu Thai Textile Co., Ltd. Section IX. Corporate Governance
I. Basic condition of corporate governance
1. The Company continued to perfect the corporate governance structure, establish and perfect the modern enterprise system and ensure the efficient and standardized operation of theCompany’sShareholders’ General Meeting, Board of Directors, Board of Supervisors and Senior Executives strictly according to Company Law, Securities Law and Governing Rules for Listed Company as well as relevant stipulations and requirements from CSRC. It formed a relationship of clear division of rights and responsibilities, assuming each own functions and check and balance each other between the management organ, decision-making organ, supervisory organ and management layer, so as to provide a good internal operational environment for theCompany’s standardized and efficient operation. At present, there is no difference between the actual situation of theCompany’s corporate governance structure and the requirements on the corporate governance of CSRC and Shenzhen Stock Exchange.
2. About shareholders andShareholders’ General Meeting
The Company convened and held theShareholders’ General Meeting in strict accordance with the requirements from the Rules forShareholders’ General Meeting in Listed Companies and the stipulation of the Rules of Procedure forShareholders’ General Meeting. During the reporting period, as for the contents such as providing the internet voting platform and the individual voting calculation as well as the disclosure of the medium and small shareholders, the Company revised part of the regulations of the Articles of Association and Rules of Procedure of the Shareholders' General Meeting of Lu Thai Textile Co., Ltd. according to the requirements of the Rules of Procedure of the Shareholders' General Meeting of Listed Companies (revised in 2014) and Articles of Association of Listed Companies (revised in 2014), which ensured all shareholders especially medium to small shareholders to enjoy equal rights and fully exercise their own rights.
3. About the relationship between the principal shareholders and the Company
TheCompany’s principal shareholders acted according to relevant standards without directly or indirectly intervening theCompany’s decision-making and operating activities over theShareholders’ General Meeting; the Company was independent with its principal shareholders in business, personnel, assets, organization, finance, and theCompany’s Board of Directors, Supervisory Committee and Internal Organs could completely independent to operate. There was no situation about annexing the assts or occupation of funds of the Company by principal shareholders or other events on infringing the interest of the Company and other shareholders. 4. About the directors and Board of Directors
The Company nominated and elected directors in strict accordance with the Articles of Association, the structure of the Board of Directors and the number of independent directors was in compliance with the requirement of laws and regulations. Besides, it established four special committees such as Strategy Committee, Nomination Committee, Audit Committee and Remuneration& Appraisal Committee in accordance with the Rules of Procedure for the Board of Directors, and accordingly promulgated the work rules for the committees. The committees clearly understood their responsibilities and operated well. The directors and independent directors completely enjoyed the rights stipulated in Company Law and Articles of Association, which ensure the scientific and impartial decision made by the Board of Directors of the Company. During the reporting period, the Company revised the Rules of Procedure of the Board of Directors of Lu Thai Textile Co., Ltd. according to the actual situation and revised the number of the Directors.
5. About supervisors and Supervisory Committee
TheCompany’s Supervisory Committee and supervisors conscientiously performed their duties by strictly implementing relevant regulations of Articles of Association and the Rules of Procedure for Supervisory Committee, and conducted effective supervision on theCompany’s finance, the legal and regulatory compliance of directors and senior executive in duty performance.
6. About information disclosure and the transparency
2015 Annual Report of Lu Thai Textile Co., Ltd. The Company authentically, accurately, completely and timely performed its information disclosure responsibility in strict accordance with the stipulations of the Stock Listing Rules of Shenzhen Stock Exchange and relevant laws and regulations. Moreover, it ensured all shareholders have equal opportunity to gain information by disclosing information in strict accordance with Management System on Information Disclosure and Management System on Information Insiders as well as relevant stipulations. 7. Investors relationship management
The Company has established the Management System on Investor Relationship, and it paid special attention to the management of investor relationship and continued to maintain good communication with investors during executing the said system. During the reporting period, through attending the investor exchanging fair, acceptinginvestors’ on-site visit and consultant by way of on-site research and phone, the Company introduced its situation of production and operation and development strategy to the investors, so as to enhance their under standing of the Company and increase theCompany’s market transparency, as well as establish a good corporate image in the capital market. Meanwhile, it fully took advantage of the investor interactive platform of Shenzhen Stock Exchange to answer the questions and consultant from investors, and accepted the advices and opinion proposed by them, so as to maintain a healthy and good relationship between the Company and the investors.
8. About relevant beneficiaries
The Company fully respected and protected the legal rights of its customers, banks, suppliers, other creditors, staffs and consumers, etc., as well as paid special attention to the active cooperation with the said relevant beneficiaries, so as to mutually promote the sustainable and healthy development of the Company.
Whether it exists any difference between the corporate governance and the Company Law and relevant rules of CSRC or not?□ Yes√ No
There is no difference between the corporate governance and the Company Law and relevant rules of CSRC.
II. Particulars about theCompany’s separation from the controlling shareholder in respect of business, personnel, assets, organization and financial affairs
1. As for the business: the Company completely separates from the controlling shareholders in the business that possesses the entirely independent production, supply and sales system and the autonomous operating ability.
2. As for the personnel: the Company remains completely independent in the Human Resources aspects such as the labor, the personnel and the wages with entirely independent self-controlling ability .
3. As for the assets: the Company possesses the entire and independent legal person property right with independent and perfect the production system, auxiliary production systems and supporting facilities; and possesses the independent ownership of the intangible assets such as the i Industrial property, trademarks, non-patented technology.
4. As for the institution: the organizations and institutions of the Company are all independent and perfect that there is no any situation of working with the controlling shareholders.
5. As for the finance: the Company possesses independent financial departments with normative financial accounting system and financial management system as well as internal control system with independent bank account.
III. Horizontal competition
□ Applicable√ Inapplicable
2015 Annual Report of Lu Thai Textile Co., Ltd. IV. Particulars about annualshareholders’ general meetings and temporaryshareholders’ general meetings held during the reporting period
1. Particulars about annualshareholders’ general meetings during the reporting period
|||||||
|-|-|-|-|-|-|
|||Proportion of||||
||||||Index to the|
|Session|Type|investors'|Convening date|Disclosure date||
||||||disclosed|
|||participation||||
||||||Announcement on|
||||||the Resolution of the|
||||||Meeting (No.:|
||||||2015-020) disclosed|
|2014 Annual General|Annual General||||on 21 May 2015 on|
|||0.00%|20 May 2015|21 May 2015||
|Meeting|Meeting||||Securities Times, Ta|
||||||Kung Pao, Shanghai|
||||||Securities News and|
||||||http://www.cninfo.co|
||||||m.cn|
||||||Announcement on|
||||||the Resolution of the|
||||||Meeting (No.:|
||||||2015-029) disclosed|
|2015 1st||||||
||Extraordinary||||on 6 Aug. 2015 on|
|Extraordinary||0.00%|5 Aug. 2015|6 Aug. 2015||
||General Meeting||||Securities Times, Ta|
|General Meeting||||||
||||||Kung Pao, Shanghai|
||||||Securities News and|
||||||http://www.cninfo.co|
||||||m.cn|
||||||Announcement on|
||||||the Resolution of the|
||||||Meeting (No.:|
||||||2015-043) disclosed|
|2015 2nd||||||
||Extraordinary||||on 30 Sep. 2015 on|
|Extraordinary||0.00%|29 Sep. 2015|30 Sep. 2015||
||General Meeting||||Securities Times, Ta|
|General Meeting||||||
||||||Kung Pao, Shanghai|
||||||Securities News and|
||||||http://www.cninfo.co|
||||||m.cn|
||||||Announcement on|
|2015 3rd|||||the Resolution of the|
||Extraordinary|||||
|Extraordinary||0.00%|30 Dec. 2015|31 Dec. 2015|Meeting (No.:|
||General Meeting|||||
|General Meeting|||||2015-055) disclosed|
||||||on 31 Dec. 2015 on|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||
|-|
|Securities Times, Ta|
|Kung Pao, Shanghai|
|Securities News and|
|http://www.cninfo.co|
|m.cn|

2. SpecialShareholders’ General Meeting applied by the preferred stockholder with restitution of voting right
□ Applicable√ Inapplicable
V. Performance of the Independent Directors
1. Particulars about the independent directors attending the board sessions and theshareholders’ general meetings
||||||||
|-|-|-|-|-|-|-|
|Particulars about the independent directors attending the board sessions|||||||
||Sessions required||Attendance by|||Non-attendance|
||to attend during|Attendance in|way of|Entrusted||in person for two|
|Independent director|||||Absence rate||
||the reporting|person|telecommunicati|presence (times)||consecutive|
||period||on|||times|
|Zhou Zhiji|12|2|10||0|No|
|Wang Lei|12|0|11|1|0|No|
|Xu Jianjun|12|1|11||0|No|
|Zhang Chengzhu|12|1|11||0|No|
|Zhao Yao|12|5|7||0|No|
|General meetings sat in on by|||||||
|||2|||||
|independent directors|||||||

Notes to non-attendance in person for two consecutive times
2. Particulars about independent directors proposing objection on relevant events
Whether independent directors propose objection on relevant events or not?
□ Yes√ No
During the reporting period, no independent directors proposed any objection on relevant events of the Company.
3. Other explanations about the duty performance of independent directors
Whether advices to the Company from independent directors were adopted or not
√ Yes□ No
Explanation on the advices of independent directors for the Company being adopted or not adopted
2015 Annual Report of Lu Thai Textile Co., Ltd. The Independent Directors of the Company had not raised any objection to the proposals and other events approved and reviewed by the Board of the Directors while executed the carefully review on the events needed advices and put forward the professional suggestion and advice as well as stated 13 independent advices which improved the scientificity and objectivity of the decision-making that exerted the due role on the supervision mechanism for improving the Company.
VI. Performance of the Special Committees under the Board during the reporting period I. Duty fulfillment of Audit Committee under the Boar
1. The Audit Committee of the 7th Board of the Directors held the 1st Meeting of Y2015 on 22 Apr. 2015, which reviewed and approved the 2015 Derivatives Trading Plan of Lu Thai Textile Co., Ltd. and stated the writtenadvice：the Company faced with the pressure of the enlarged fluctuation rage of the exchange rate of the foreign currency market Renminbi to the US dollar and the derivatives trading plan raised by the Finance Department was the efficient instrument for avoiding the exchange rate risks, and through the strengthen of the internal control as well as the execution of stop loss processing and the risk prevention measures could improve the operating and management level and benefit to the fully exertion of the competition advantage of the Company. Under the premises of guaranteeing the normal operation, the Company used the self-owned funds to execute the derivatives trading, which was benefit for the avoiding of the changes risks of the Renminbi exchange rate and for improving the prevention ability of the Company against the exchange rate fluctuation and the operating level as well as for fully exerting the competition advantage of the Company without any situation that harm the benefits of the Company and the whole shareholders. We believed the derivatives trading plan was feasible and necessary with the risks were controllable. And we agreed to submit the 2015 Derivatives Trading Plan of Lu Thai Textile Co., Ltd. to the 20th Session of the 7th Board of the Directors for review and approval.
2. The Audit Committee of the 7th Board of the Directors held the1st Meeting of Y2016 on 3 Mar. 2016, which reviewed and the approved the Proposal on the Withdrawal of the Assets Impairment Provision and stated the writtenadvice：for fairly reflected the value of each asset of the Company and according to the relevant regulations of the ASBE and Management System of the Withdrawal of the Assets Impairment Provision of Lu Thai Textile Co., Ltd. and the Company had executed the examination of each asset at the year-end of 2015 as well as the impairment test of the assets with impairment indication and when the estimated recoverable amount of each asset was lower than its book value should execute the withdrawal of the assets impairment provision through recognition or measurement. We considered that the events of the withdrawal of the assets impairment provision met with the ASBE and the relevant accounting policies of the Company with sufficient evidence as well as indicated the accounting conservation principles and met with the actual situation of the Company. After the withdrawal of the assets impairment provision, the events could more fair to reflect the financial condition, assets value and operating results of the Company up to 31 Dec. 2015, which made the accounting information of the Company more reasonable. The Company agreed to submit the Proposal on the Withdrawal of the Assets Impairment Provision to the 30th Session of the 7th Board of the Directors for review and approval. 3. Major work of the 2015 annual report of the Audit Committee:
(1) The Audit Committee had held the 2015 1st Meeting of the Audit Committee on the Financial Audit Work in the meeting room of the Company on 17 Nov. 2015 and the meeting had confirmed the time and arrangement plan of the 2015 annual financial audit work unanimously with the 2015 Audit Institution Ruihua CPAs (LLP).
(2) On 30 Jan. 2016, the Audit Committee had held the 2nd Meeting of the 2015 audit work, which reviewed and submitted the financial report audited by Ruihua CPAs (LLP) and issued the written advice.
(3) During the audit process, the Company had been maintained the contract and communication with the project leader of Ruihua CPAs (LLP) by the methods such as the telephones and e-mails and had been urged which to submit the audit report within the appointed time.
(4) The 3rd Meeting on 2015 Annual Audit, as well as the 2015 Annual Work Conference, were convened by the Committee on 27 Mar.
2016, where the following proposals were approved as resolutions, namely, the audited 2015 Financial Report of the Company, the
2015 Annual Report of Lu Thai Textile Co., Ltd. Summary Report on the Audit Conducted by Ruihua CPAs (LLP) on theCompany’s 2015 Financial Report, and the Proposal on Renewing Employment of Ruihua CPAs (LLP) as theCompany’s audit agency for 2016.
4. Written opinions, summary report of the annual audit, and resolutions of 2014 Work Conference on Annual Report by Audit Committee
(1) AuditCommittee’s written opinion on the 2015 financial and accounting statements prepared by theCompany’s Financial Department before the presence of the registered accountants for the annual audit:
According to the Rules for Audit Committee of the Board Concerning Annual Reports of Lu Thai Textile Co., Ltd., the Audit Committee shall perform its duties of conducting supervision and checks in theCompany’s preparation and disclosure of its annual reports. The Committee reviewed the 2015 financial and accounting statements prepared by theCompany’s Financial Department before the presence of the registered accountants for the annual audit, and expressed its opinion as follows:
1. The financial and accounting statements were prepared in accordance with theCompany’s accounting policy with proper application of the accounting policy and reasonable accounting estimates, which were in line with the New Accounting Standards for Business Enterprises, the Accounting System for Business Enterprises, and the relevant regulations issued by the Ministry of Finance of PRC;
2. The subsidiary statements included in theCompany’s consolidated statements were complete in terms of contents, providing an accurate basis for the statement combination;
3. TheCompany’s financial statements were found objective, factual and accurate with no major misstatements or information omission.
4. Since there is still a certain period of time from this review of the financial statements to the formal issuance of theauditor’s report and the financial statements, theCompany’s Financial Department is advised to pay close attention to and carefully handle the matters after the balance sheet date, so as to ensure the fairness, factuality and completeness of the financial statements. The Audit Committee is of the opinion that the financial and accounting statements are ready to be submitted to the registered accountants for audit.
(2) AuditCommittee’s written opinion on theCompany’s financial statements after the preliminary audit opinion was issued by Ruihua CPAs (LLP):
According to the Rules for Audit Committee of the Board Concerning Annual Reports of Lu Thai Textile Co., Ltd., the Audit Committee shall perform its duties of conducting supervision and checks in theCompany’s preparation and disclosure of its annual reports. We effectively communicated with the said CPA firm (LLP) at the beginning of the audit. And we once again reviewed theCompany’s 2015 financial and accounting statements following the preliminary audit opinion issued by the CPA firm (LLP), and expressed our opinions as follows:
In accordance with the New Accounting Standards for Business Enterprises and theCompany’s relevant financial rules, the financial statements were prepared in a rational and standardized way, which fairly, factually, accurately and completely presented theCompany’s assets, liabilities,shareholders’ equity and operation results by 31 Dec. 2015.
The Audit Committee is of the opinion that theCompany’s 2015 financial and accounting statements preliminarily audited by RSM China Certified Public Accountants (Special General Partnership) are ready to be submitted to the 31st Session of the 7th Board of the Directors for review.
(3) Resolutions made at 2015 Annual Work Conference of Audit Committee of the Board
The Audit Committee of the Board of Lu Thai Textile Co., Ltd. held its 2015 Annual Work Conference at Banyang Villa Meeting Room of the Company on 27 Mar. 2016. Three persons were supposed to attend the meeting, and all three of them were in fact present at the meeting as well as the Chief Accountant, the Manager Assistant of the Audit Department, the project responsible person of Lu Thai of Ruihua CPAs attended the meeting. Mr. Qi Haodong, Chairman of the Audit Committee, presided over the meeting, and Chief Accountant and Chief Auditor of the Audit Department sat in on the meeting. The meeting was convened in accordance
with the Company Law and the Articles of Association of the Company. And the following proposals were passed by vote at the
2015 Annual Report of Lu Thai Textile Co., Ltd. meeting:
I. With 3 favorable votes, 0 negative votes and no abstentions, the 2015 Financial Report of the Company audited by Ruihua CPAs (LLP) was passes;
II. With 3 favorable votes, 0 negative votes and no abstentions, the Summary Report on the Audit Conducted by Ruihua CPAs (LLP) on theCompany’s 2015 Financial Report was passed;
III. With 3 favorable votes, 0 negative votes and no abstentions, the Proposal on Renewing Employment of Ruihua CPAs (LLP) as theCompany’s audit agency and internal control audit agency for 2016 was passed with a valid term of 1 year. The Company paid RMB1.585 million to the said CPAs firm as fees for the 2015 annual financial report audit and internal control audit.
The Committee agrees to submit the above-mentioned proposals 1 and 3 to the Board of Directors for examination on the 31st Session of the 7th Board of Directors.
II. Duty performance of Remuneration Committee affiliated to the Board of Directors
1. The Remuneration Committee of the Board of Lu Thai Textile Co., Ltd. held the First Conference in 2015 at Banyang Villa Meeting Room of the Company on 27 Mar. 2015. Six persons were supposed to attend the meeting, and all of them were in fact present at the meeting. The meeting held by the Company met with the relevant regulations of Company Law and the Articles of Association of the Company and reviewed and approved the Proposal on the 2014 Appraisal Result of the Senior Executives of Lu Thai Company by the voting method and agreed to submit the above-mentioned proposal to the Board of Directors for examination on the 19th Session of the 7th Board of Directors.
2. Accoridng to the authorization of the 19th Session the 7th Board of Directors of Lu Thai Company, Remuneration Committee of the Board of Lu Thai Textile Co., Ltd. held the Second Conference in 2015 at Banyang Villa Meeting Room of the Company on 4 Jun. 2015. Six persons were supposed to attend the meeting, and all of them were in fact present at the meeting. Of which Liu Shizhen, Liu Zibin and Zhang Yao voted in field while Zhang Chengzhu, Zhou Zhiji and Wang Lei voted by communication methods with the Chief Accountant, Board Secretary attended the meeting. The meeting held by the Company met with the relevant regulations of Company Law and the Articles of Association of the Company. And the meeting reviewed and approved the Proposal on the 2014 Risks Funds Assessment Result and the Grant Quota by the voting method.
III. Duty performance of strategic committee affiliated to the Board of Directors
The Strategic Committee of the Board of Directors of Lu Thai Textile Co., Ltd. held the First Conference in 2015 at Banyang Villa Meeting Room of the Company on 27 Mar. 2015. 13 persons were supposed to attend the meeting, and all of them in fact present at the meeting. Mr. Liu Shizhen, Chairman of the Strategic Committee, presided over the meeting, and Chief Accountant sat in on the meeting. The meeting was convened in accordance with the Company Law and the Articles of Association of the Company. The following proposals were passed unopposed by vote:
1. Overall Strategic Objectives of Yarn Dyed Fabric of Lu Thai Textile Co., Ltd. for 2015-2017.
2. Overall Strategic Objectives of Shirts Processing of Lu Thai Textile Co., Ltd. for 2015-2017.
3. Brand,R&D, human resources, fabric information, and clothing manufacture ERP engineering sub-plan.
4. 2015 Annual Operation Plan of Lu Thai Textile Co., Ltd.
IX. Duty performance of nominations committee affiliated to the Board of Directors
1. The Company held the 1st meeting of 2015 of the norminations committee of the 7th Board of Directors on 27 Oct. 2015 according to the relevent regulations of the Articles of Association, with 6 favorable votes, 0 negative votes and no abstentions, the proposal on nominating the Director and GM-Mr. Liu Zibin as the candicate of the Chairman of the Board of the 7th Board of Director and had submitted which to the 26th Session of the 7th Board of Directros for approval. The 26th Session of the 7th Board of Directors reviewed and approved the proposal.
VII. Performance of the Supervisory Committee
During the reporting period, the Supervisory Committee found whether there was risk in the Company in the supervisory activity
2015 Annual Report of Lu Thai Textile Co., Ltd.□ Yes√ No
The Supervisory Committee has no objection on the supervised events during the reporting period.
VIII. Performance Evaluation and Incentive Mechanism for Senior Management Staff
In the reporting period, Remuneration Committee of the Board of Directors appraised operating achievements of the Company for the year 2014 according to Incentive and Restricted Proposal for Senior Executives of Lu Thai Textile Co., Ltd, and drew up incentive proposal for senior executives, which will be executed after review and approval by the 19th Session of the 7th Board of Directors dated 28 Mar. 2015. During the reporting period, the Company constantly improved the performance evaluation mechanism and made the evaluation and incentive of the Senior Executives concerned with theCompany’s performances and the individual working results. According to the overall development strategy and the annual operating target of the Company at the period-begin, the Company confirms the annual performance comprehensive indication and the management duty of each Senior Executives, and executes the performance examination and the redemption of the rewards and punishment for the Senior Executives by the Remuneration and Examination Committee affiliated to the Board of Directors at the year-end. The Company will constantly improve the evaluation and incentive mechanism that to tightly concern the salary of the Senior Executives with the management level and the operating performance so that to fully mobilize and inspire the initiative and creativity of them.
IX. Internal Control
1. Particulars about significant defects found in the internal control during reporting period
□ Yes√ No
2. Self-appraisal report on internal control
||||
|-|-|-|
|Disclosure date of the Self-appraisal|||
||30 Mar. 2016||
|Report on Internal Control|||
||For the details, please refer to the Self-appraisal Report on Internal Control of Lu Thai||
|Disclosure index of the Self-appraisal|||
||Textile Co., Ltd. simultaneously disclosed on www.cninfo.com.cn with the 2015||
|Report on Internal Control|||
||Annual Report of the Company.||
|The proportion of total assets included in|||
|evaluation scope entities in the|||
||93.72%||
|Company's total assets of the consolidated|||
|financial statements|||
|The proportion of operation revenue|||
|included in evaluation scope entities in|||
||94.80%||
|the Company's operation revenue of the|||
|consolidated financial statements|||
|Defect judging standards|||
|Category|Financial Report|Non-Financial Report|
||Great defect: malpractices of the Directors,|Great defect: violated the national laws|
|Qualitative criteria|||
||Supervisors and Senior Executives; the|and regulations; the decision-making of|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
||Company revised the published financial|the enterprise was not scientific that led|
||report; the CPA founded the current financial|to the mistakes of itself; outflow of the|
||report occurred significant misstatement|management personnel or the technician|
||while during the operating process of the|personnel was serious; frequently|
||internal control could not founded the|appeared the negative news from the|
||misstatement; the supervision of the Audit|Media; the significant business lacked of|
||Committee and the internal audit institution|systematic control or the systematic|
||of the Company on the internal control was|control was invalid; the result of the|
||invalid. Significant defeat: had not abide by|internal control assessment which was|
||the generally accepted accounting principles|the great defect event had not been|
||to choose and apply the accounting policies;|revised. Significant defeat: violated the|
||had not built up the anti-fraud and significant|enterprise internal regulations that|
||counterbalance mechanism and control|caused rather serious losses; significant|
||measures; during the financial report|business lacked of systematic control;|
||process, there occurred single or multiple|outflow of the rather important personnel|
||defects which not reached the recognition|was serious; the Media reported the|
||standard of the significant defeat but|negative news that caused rather serious|
||influenced the true and accurate target of the|negative influence; rather important|
||financial report. General defect: other|business lacked of systematic control or|
||internal control defect which had not|the systematic control was invalid; the|
||constructed as the great defeat, significant|results of the internal control assessment|
||defect.|which as the significant defect had not|
|||been revised. General defect: other|
|||internal control defect which had not|
|||constructed as the great defeat,|
|||significant defect.|
||Great defect: misstatement≥2% of the total|Great defect: the direct financial losses|
||profits amount; misstatement≥0.3% of the|were more than RMB6 million or had|
||total assets amount; misstatement≥0.3% of|been formally and externally disclosed|
||the total operating income;|and caused negative influences on the|
||misstatement≥0.4% of the total owners’|disclosure of the periodical report of the|
||equities amount. Significant defect: 1% of|Company. Significant defect: the direct|
||the total profits amount≤misstatement<2%|financial losses were of RMB3 million|
||of the total profits amount; 0.15% of the total|(including RMB3 million)-RMB6|
||assets amount≤misstatement<0.3% of the|million or had been punished by the|
|Quantitative criteria|||
||total assets amount; 0.15% of the total|state-owned government sectors while|
||operating amount≤misstatement<0.3% of the|not caused negative influences on the|
||total operating amount; 0.2% of the total|disclosure of the periodical report of the|
||owners’ equities|Company. General defect: the direct|
||amount≤misstatement<0.4% of the total|financial losses were of RMB0.5 million|
||owners’ equities amount. General defect:|(including RMB0.5 million)-RMB 3|
||misstatement<1% of the total profits amount;|million or had been punished by the|
||misstatement<0.15% of the total assets|below-provincial (including the|
||amount; misstatement<0.15% of the total|provincial level) government sectors|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
||operating income; misstatement<0.2% of the|while not caused negative influences on|
||total owners’ equities amount.|the disclosure of the periodical report of|
|||the Company.|
|Number of significant defects of financial|||
||0||
|report (piece)|||
|Number of significant defects of non-|||
||0||
|financial report (piece)|||
|Number of important defects of financial|||
||0||
|report (piece)|||
|Number of important defects of|||
||0||
|non-financial report (piece)|||

X. Audit report on internal control
√ Applicable□ Inapplicable
|||
|-|-|
|Audit opinion paragraphs in the Audit Report on Internal Control||
|Internal control audit report RHZSZ [2016] No. 37040001||
|To the shareholders of Lu Thai Textile Co., Ltd.:||
|According to the relevant requirements of the Enterprise Internal Control Audit Guidelines and the Practicing Standards for China’s||
|CPAs, we audited the validity of the internal control of the financial report on 31 Dec. 2015 of Lu Thai Textile Co., Ltd. (hereinafter||
|referred to as “the Company”).||
|I. Responsibilities of the Company for the internal control||
|According to the regulations of the C-SOX, the Enterprise Internal Control Application Guidelines and the Enterprise Internal||
|Control Evaluation Guidance, the Company built and improved as well as efficiently executed the internal control with the||
|responsibility of the Board of Directors for evaluating the efficiency of it.||
|II. Responsibilities of the CPA||
|Our responsibilities are to state the audit advices on the efficiency of the internal control of the financial report based on the||
|execution of the audit work and to disclose the noticed great defect of the non-financial report internal control.||
|III. Inherent limitation of the internal control||
|The internal control possesses its inherent limitation with the possibility of couldn’t prevent and discover the misstatement.||
|Besides, owning to the changes of the situation, there may cause the inappropriate of the internal control or the degree of the||
|compliance to the control policies and the process would decrease. The Company predicted that there were certain risks of the||
|efficiency of the internal control of the future according to the audit results of the internal control.||
|IV. Audit opinion of the internal control of the financial report||
|We believe that the Company has made valid internal control on financial report in all significant aspects on 31 Dec. 2015||
|according to the Basic Rules for Enterprise Internal Control and other relevant stipulations.||
|Ruihua CPAs (LLP) CPA: Cui Xiaoli||
|China•Beijing CPA: He Feng||
|Particulars about Audit Report on||
||Disclosure|
|Internal Control||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
|Disclosure date of the Audit Report||
||30 Mar. 2016|
|on Internal Control||
|Disclosure index of the Audit|For details, please refer to the Auditor’s Report on Internal Control on www.cninfo.com.cn at|
|Report on Internal Control|the same time of disclosing the Company’s 2015 Annual Report.|
|Type of Audit Report on Internal||
||Unqualified auditor’s report|
|Control||
|Whether there is significant defect||
||No|
|in non-financial report||

Whether the CPAs firm issues an Audit Report on Internal Control with non-standard opinion or not?
□ Yes√ No
Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal Report from the Board or not?
√ Yes□ No
2015 Annual Report of Lu Thai Textile Co., Ltd. Section X. Financial Report
I.Auditor’s Report
|||
|-|-|
|Type of audit opinions|Unqualified auditor’s report|
|Signing date of audit report|28 Mar. 2016|
|Name of audit institution|Ruihua CPAs (LLP)|
|Document No. of audit report|RHSZ [2016] No. 37040002|
|Name of CPA|He Feng, Cui Xiaoli|

Text of theauditor’s report
To the shareholders of Lu Thai Textile Co., Ltd.
We have audited the accompanying financial statements of Lu Thai Textile Company Limited (hereinafter refers as “the Company”) which comprise theCompany’s balance sheet and the consolidated balance sheet as at 31 December 2015, theCompany’s profit statement and the consolidated profit statement, theCompany’s cash flow statement and the consolidated cash flow statement, theCompany’s statement of changes inowners’ equity and the consolidated statement of changes inowners’ equity, for the year then ended, as well as the notes to the financial statements.
I.Management’s responsibility for the financial statements
The management of the Company is responsible for the preparation of these financial statements and fair presentation. These responsibilities include: (1) preparing financial statements according to the Accounting Standards for Business Enterprises and make them a fair presentation; and (2) designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
II.Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. Opinion
In our opinion, the accompanying financial statements has been prepared according to the Enterprise Accounting Standards and give a true and fair view of the financial position of the Company as at 31 December 2015, and of the financial performance and cash flows for the year then ended in all material aspects.
Ruihua CPAs (LLP) CPA: He Feng
China·Beijing CPA: Cui Xiaoli
28 Mar. 2016
2015 Annual Report of Lu Thai Textile Co., Ltd. II. Financial statements
Monetary unit of notes to financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Lu Thai Textile Co., Ltd.
31 Dec. 2015
Unit: RMB Yuan
||||
|-|-|-|
|Item|31 Dec. 2015|31 Dec. 2014|
|Current Assets:|||
|Monetary funds|795,501,196.07|666,293,798.30|
|Settlement reserves|||
|Intra-group lendings|||
|Financial assets measured at fair|||
|value of which changes are recorded in|71,696,678.70||
|current profits and losses|||
|Derivative financial assets|||
|Notes receivable|133,145,518.39|113,804,477.43|
|Accounts receivable|262,848,042.62|211,970,554.10|
|Accounts paid in advance|196,809,904.13|174,865,932.88|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserves|||
|Interest receivable|653,075.08||
|Dividend receivable|||
|Other accounts receivable|70,821,406.28|63,378,909.28|
|Financial assets purchased under|||
|agreements to resell|||
|Inventories|1,743,963,973.24|1,752,570,382.21|
|Assets held for sale|||
|Non-current assets due within 1 year|||
|Other current assets|57,391,316.34|5,167,324.98|
|Total current assets|3,332,831,110.85|2,988,051,379.18|
|Non-current assets:|||
|Loans by mandate and advances|||
|granted|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Available-for-sale financial assets|67,442,600.00|67,442,600.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|4,980,998.00|6,980,998.00|
|Long-term equity investment|||
|Investing real estate|||
|Fixed assets|4,907,575,469.84|4,930,848,056.04|
|Construction in progress|205,094,029.50|123,585,226.80|
|Engineering materials|6,319,783.17|19,885,765.41|
|Disposal of fixed assets|||
|Production biological assets|1,177,113.89|1,310,500.00|
|Oil-gas assets|||
|Intangible assets|363,385,986.63|373,760,347.71|
|R&D expense|||
|Goodwill|20,613,803.29|20,613,803.29|
|Long-term deferred expenses|85,124,145.25|28,319,033.27|
|Deferred income tax assets|62,123,091.53|49,963,446.84|
|Other non-current assets|34,502,367.27|16,910,237.34|
|Total of non-current assets|5,758,339,388.37|5,639,620,014.70|
|Total assets|9,091,170,499.22|8,627,671,393.88|
|Current liabilities:|||
|Short-term borrowings|802,766,318.90|517,452,946.24|
|Borrowings from Central Bank|||
|Customer bank deposits and due to|||
|banks and other financial institutions|||
|Intra-group borrowings|||
|Financial liabilities measured at fair|||
|value of which changes are recorded in|46,695,875.00|3,306,200.00|
|current profits and losses|||
|Derivative financial liabilities|||
|Notes payable|3,109,149.48|7,421,979.09|
|Accounts payable|248,570,405.57|344,082,239.16|
|Accounts received in advance|95,077,531.32|82,176,191.45|
|Financial assets sold for repurchase|||
|Handling charges and commissions|||
|payable|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Payroll payable|291,263,599.62|261,539,206.93|
|Tax payable|80,615,008.14|74,052,405.97|
|Interest payable|1,851,876.78|511,373.44|
|Dividend payable|441,113.64|441,456.54|
|Other accounts payable|62,514,814.53|58,075,873.18|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Liabilities held for sale|||
|Non-current liabilities due within 1|||
|||100,733,898.72|
|year|||
|Other current liabilities|||
|Total current liabilities|1,632,905,692.98|1,449,793,770.72|
|Non-current liabilities:|||
|Long-term borrowings||9,904,645.59|
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual bonds|||
|Long-term payables||220,000.00|
|Long-term payroll payables|81,499,403.98|80,360,457.97|
|Specific payables|||
|Estimated liabilities|||
|Deferred income|96,135,077.91|67,057,221.40|
|Deferred income tax liabilities|2,192,694.35|2,064,713.02|
|Other non-current liabilities|1,840,000.00|1,840,000.00|
|Total non-current liabilities|181,667,176.24|161,447,037.98|
|Total liabilities|1,814,572,869.22|1,611,240,808.70|
|Owners’ equity:|||
|Share capital|955,758,496.00|955,758,496.00|
|Other equity instruments|||
|Of which: preferred shares|||
|Perpetual bonds|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Capital reserves|1,007,146,166.97|1,007,039,561.13|
|Less: Treasury stock|11,610,721.68||
|Other comprehensive income|17,090,772.31|-8,440,178.37|
|Specific reserves|||
|Surplus reserves|815,648,504.28|742,347,832.47|
|Provisions for general risks|||
|Retained profits|4,053,079,857.70|3,892,066,534.32|
|Total equity attributable to owners of|||
||6,837,113,075.58|6,588,772,245.55|
|the Company|||
|Minority interests|439,484,554.42|427,658,339.63|
|Total owners’ equity|7,276,597,630.00|7,016,430,585.18|
|Total liabilities and owners’ equity|9,091,170,499.22|8,627,671,393.88|

 Legal representative: Liu Zibin Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
2. Balance sheet of the Company
Unit: RMB Yuan
||||
|-|-|-|
|Item|31 Dec. 2015|31 Dec. 2014|
|Current Assets:|||
|Monetary funds|361,326,403.14|250,409,717.93|
|Financial assets measured at fair|||
|value of which changes are recorded in|||
|current profits and losses|||
|Derivative financial assets|||
|Notes receivable|100,449,603.66|87,341,876.69|
|Accounts receivable|235,128,453.94|321,897,074.61|
|Accounts paid in advance|194,884,351.36|193,383,406.51|
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|33,540,540.54|28,049,517.79|
|Inventories|1,194,474,541.81|1,206,795,514.65|
|Assets held for sale|||
|Non-current assets due within 1 year|||
|Other current assets|20,665,251.54|1,017,648.28|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Total current assets|2,140,469,145.99|2,088,894,756.46|
|Non-current assets:|||
|Available-for-sale financial assets|55,282,600.00|55,282,600.00|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|1,577,704,740.04|1,170,861,572.56|
|Investing real estate|||
|Fixed assets|3,086,026,962.51|3,115,567,670.72|
|Construction in progress|47,195,873.42|77,701,863.38|
|Engineering materials|4,752,722.48|18,626,397.04|
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|231,714,546.11|239,561,216.15|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|56,039,573.79|31,683,250.78|
|Other non-current assets|25,733,137.67|5,406,401.00|
|Total of non-current assets|5,084,450,156.02|4,714,690,971.63|
|Total assets|7,224,919,302.01|6,803,585,728.09|
|Current liabilities:|||
|Short-term borrowings|509,321,176.41|109,116,402.18|
|Financial liabilities measured at fair|||
|value of which changes are recorded in|39,527,800.00|3,075,000.00|
|current profits and losses|||
|Derivative financial liabilities|||
|Notes payable|400,000.00|4,126,949.64|
|Accounts payable|156,939,081.65|370,179,503.31|
|Accounts received in advance|52,388,447.07|42,230,252.30|
|Payroll payable|225,146,911.56|201,779,896.86|
|Tax payable|44,647,234.36|38,755,976.56|
|Interest payable|830,073.23|401,695.08|
|Dividend payable|441,113.64|441,456.54|
|Other accounts payable|19,453,519.54|22,996,300.29|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Liabilities held for sale|||
|Non-current liabilities due within 1|||
|||100,733,898.72|
|year|||
|Other current liabilities|||
|Total current liabilities|1,049,095,357.46|893,837,331.48|
|Non-current liabilities:|||
|Long-term borrowings||9,904,645.59|
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual bonds|||
|Long-term payables|||
|Long-term payroll payables|81,499,403.98|80,360,457.97|
|Specific payables|||
|Estimated liabilities|||
|Deferred income|61,687,374.76|30,469,481.47|
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|143,186,778.74|120,734,585.03|
|Total liabilities|1,192,282,136.20|1,014,571,916.51|
|Owners’ equity:|||
|Share capital|955,758,496.00|955,758,496.00|
|Other equity instruments|||
|Of which: preferred shares|||
|Perpetual bonds|||
|Capital reserves|1,013,498,848.06|1,013,392,242.22|
|Less: Treasury stock|11,610,721.68||
|Other comprehensive income|||
|Specific reserves|||
|Surplus reserves|815,648,504.28|742,347,832.47|
|Retained profits|3,259,342,039.15|3,077,515,240.89|
|Total owners’ equity|6,032,637,165.81|5,789,013,811.58|
|Total liabilities and owners’ equity|7,224,919,302.01|6,803,585,728.09|

3. Consolidated income statement
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Item|2015|2014|
|I. Total operating revenues|6,173,322,778.61|6,169,688,792.53|
|Including: Sales income|6,173,322,778.61|6,169,688,792.53|
|Interest income|||
|Premium income|||
|Handling charge and commission|||
|income|||
|II. Total operating costs|5,302,761,010.18|5,124,498,428.62|
|Including: Cost of sales|4,341,034,877.04|4,234,584,418.78|
|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|55,309,984.03|48,737,776.54|
|Selling and distribution expenses|191,933,295.19|178,283,494.87|
|Administrative expenses|670,704,384.29|634,545,131.08|
|Financial expenses|16,481,023.89|15,462,783.19|
|Asset impairment loss|27,297,445.74|12,884,824.16|
|Add: Gain/(loss) from change in fair|||
||-60,685,931.36|-33,255,320.00|
|value (“-” means loss)|||
|Gain/(loss) from investment (“-”|||
||31,540,015.51|28,055,884.70|
|means loss)|||
|Including: share of profits in|||
|associates and joint ventures|||
|Foreign exchange gains (“-” means|||
|loss)|||
|III. Business profit (“-” means loss)|841,415,852.58|1,039,990,928.61|
|Add: non-operating income|52,201,733.84|127,350,434.80|
|Including: Gains on disposal of|||
||959,445.92|2,759,790.52|
|non-current assets|||
|Less: non-operating expense|10,168,567.50|10,366,369.53|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Including: Losses on disposal of|||
||5,625,603.48|6,075,803.07|
|non-current assets|||
|IV. Total profit (“-” means loss)|883,449,018.92|1,156,974,993.88|
|Less: Income tax expense|147,905,990.15|177,597,812.31|
|V. Net profit (“-” means loss)|735,543,028.77|979,377,181.57|
|Net profit attributable to owners of|||
||712,193,243.19|958,725,402.84|
|the Company|||
|Minority shareholders’ income|23,349,785.58|20,651,778.73|
|VI. After-tax net amount of other|||
||25,530,950.68|-945,858.01|
|comprehensive incomes|||
|After-tax net amount of other|||
|comprehensive incomes attributable to|25,530,950.68|-945,858.01|
|owners of the Company|||
|(I) Other comprehensive incomes|||
|that will not be reclassified into gains and|||
|losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|cannot be reclassified into gains and|||
|losses under the equity method|||
|(II) Other comprehensive incomes|||
|that will be reclassified into gains and|25,530,950.68|-945,858.01|
|losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|will be reclassified into gains and losses|||
|under the equity method|||
|2. Gains and losses on fair|||
|value changes of available-for-sale|||
|financial assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|4. Effective hedging gains and|||
|losses on cash flows|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|5. Foreign-currency financia|l25,530,950.68||
|||-945,858.01|
|statement translation difference|||
|6. Other|||
|After-tax net amount of othe|r||
|comprehensive incomes attributable to|||
|minority shareholders|||
|VII. Total comprehensive incomes|761,073,979.45|978,431,323.56|
|Attributable to owners of the|737,724,193.87||
|||957,779,544.83|
|Company|||
|Attributable to minority|23,349,785.58||
|||20,651,778.73|
|shareholders|||
|VIII. Earnings per share|||
|(I) Basic earnings per share|0.750|1.000|
|(II) Diluted earnings per share|0.750|1.000|

 Where business mergers under the same control occurred in this reporting period, the net profit achieved by the merged parties before the business mergers was RMB0.00, with the corresponding amount for the last period being RMB0.00.
Legal representative: Liu Zibin Person-in-charge of the accounting work: Zhang Hongmei
Chief of the accounting division: Zhang Keming
4. Income statement of the Company
Unit: RMB Yuan
||||
|-|-|-|
|Item|2015|2014|
|I. Total sales|4,944,030,174.49|4,724,521,057.36|
|Less: cost of sales|3,648,460,561.91|3,328,499,838.24|
|Business taxes and surcharges|43,900,218.04|35,182,870.07|
|Distribution expenses|89,638,305.49|78,585,868.37|
|Administrative expenses|463,715,559.98|460,305,623.93|
|Financial costs|11,074,526.15|-3,895,674.90|
|Impairment loss|105,767,874.66|13,182,245.70|
|Add: gain/(loss) from change in fairvalue (“-” means loss)|||
||-36,452,800.00|-28,132,200.00|
|Gain/(loss) from investment (“-”means loss)|||
||251,963,173.61|84,276,679.09|
|Including: income form investmenton associates and joint ventures|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|II. Business profit (“-” means loss)|796,983,501.87|868,804,765.04|
|Add: non-operating income|21,081,302.96|85,828,034.74|
|Including: Gains on disposal of|||
||535,631.91|2,643,079.05|
|non-current assets|||
|Less: non-operating expense|4,557,976.86|5,679,483.40|
|Including: Losses on disposal of|||
||3,840,466.74|4,845,033.00|
|non-current assets|||
|III. Total profit (“-” means loss)|813,506,827.97|948,953,316.38|
|Less: Income tax expense|80,500,109.90|120,859,104.20|
|IV. Net profit (“-” means loss)|733,006,718.07|828,094,212.18|
|V. After-tax net amount of other|||
|comprehensive incomes|||
|(I) Other comprehensive incomes that|||
|will not be reclassified into gains and|||
|losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that cannot be reclassified into gains|||
|and losses under the equity method|||
|(II) Other comprehensive incomes|||
|that will be reclassified into gains and|||
|losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that will be reclassified into gains and|||
|losses under the equity method|||
|2. Gains and losses on fair value|||
|changes of available-for-sale financial|||
|assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|4. Effective hedging gains and|||
|losses on cash flows|||
|5. Foreign-currency financial|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|statement translation difference|||
|6. Other|||
|VI. Total comprehensive incomes|733,006,718.07|828,094,212.18|
|VII. Earnings per share|||
|(I) Basic earnings per share|0.77|0.87|
|(II) Diluted earnings per share|0.77|0.87|

 5. Consolidated cash flow statement
Unit: RMB Yuan
||||
|-|-|-|
|Item|2015|2014|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||6,030,509,998.21|6,188,950,932.05|
|commodities and rendering of service|||
|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|||
|Net cash received from reinsurance|||
|business|||
|Net increase of deposits of policy|||
|holders and investment fund|||
|Net increase of disposal of financial|||
|assets measured at fair value of which|||
|changes are recorded into current gains|||
|and losses|||
|Cash received from interest, handling|||
|charges and commissions|||
|Net increase of intra-group|||
|borrowings|||
|Net increase of funds in repurchase|||
|business|||
|Tax refunds received|172,608,069.68|169,362,368.52|
|Other cash received relating to|95,495,004.98|104,846,975.33|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|operating activities|||
|Subtotal of cash inflows from operating|||
||6,298,613,072.87|6,463,160,275.90|
|activities|||
|Cash paid for goods and services|3,307,297,819.20|3,445,428,499.72|
|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|1,372,174,345.22|1,311,137,432.02|
|Various taxes paid|356,064,268.45|353,432,796.63|
|Other cash payment relating to|||
||235,481,235.66|241,066,198.51|
|operating activities|||
|Subtotal of cash outflows from|||
||5,271,017,668.53|5,351,064,926.88|
|operating activities|||
|Net cash flows from operating activities|1,027,595,404.34|1,112,095,349.02|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of|||
|investments|||
|Cash received from return on|||
|||120,000.00|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|2,277,031.35|10,105,963.10|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
||50,940,957.84|35,492,522.48|
|investing activities|||
|Subtotal of cash inflows from investing|||
||53,217,989.19|45,718,485.58|
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|455,625,977.74|756,763,199.57|
|assets|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Cash paid for investment|||
|Net increase of pledged loans|||
|Net cash paid to acquire subsidiaries|||
|and other business units|||
|Other cash payments relating to|||
||117,355,791.90||
|investing activities|||
|Subtotal of cash outflows from|||
||572,981,769.64|756,763,199.57|
|investing activities|||
|Net cash flows from investing activities|-519,763,780.45|-711,044,713.99|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
||500,000.00|500,000.00|
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|500,000.00|500,000.00|
|subsidiaries|||
|Cash received from borrowings|1,457,671,792.24|912,000,833.83|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
||77,262,230.00|37,814,503.00|
|financing activities|||
|Subtotal of cash inflows from financing|||
||1,535,434,022.24|950,315,336.83|
|activities|||
|Repayment of borrowings|1,320,131,980.26|1,115,523,472.45|
|Cash paid for interest expenses and|||
||505,028,058.43|407,085,121.99|
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
||9,619,012.38|20,039,282.78|
|by subsidiaries to minority shareholders|||
|Other cash payments relating to|||
||123,481,516.75|53,943,820.20|
|financing activities|||
|Sub-total of cash outflows from|||
||1,948,641,555.44|1,576,552,414.64|
|financing activities|||
|Net cash flows from financing activities|-413,207,533.20|-626,237,077.81|
|IV. Effect of foreign exchange rate|||
||21,677,584.66|4,670,735.19|
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||116,301,675.35|-220,515,707.59|
|equivalents|||
|Add: Opening balance of cash and|649,393,798.30|869,909,505.89|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||765,695,473.65|649,393,798.30|
|equivalents|||

6. Cash flow statement of the Company
Unit: RMB Yuan
||||
|-|-|-|
|Item|2015|2014|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||4,961,880,181.41|4,669,563,283.98|
|commodities and rendering of service|||
|Tax refunds received|129,451,700.19|134,158,073.18|
|Other cash received relating to|||
||52,352,078.75|83,209,985.16|
|operating activities|||
|Subtotal of cash inflows from operating|||
||5,143,683,960.35|4,886,931,342.32|
|activities|||
|Cash paid for goods and services|2.874.742.643.78|2,727,091,114.02|
|Cash paid to and for employees|1,050,513,463.85|993,656,836.67|
|Various taxes paid|172,137,702.77|222,404,363.00|
|Other cash payment relating to|||
||157,926,230.24|156,501,371.04|
|operating activities|||
|Subtotal of cash outflows from|||
||4,255,320,040.64|4,099,653,684.73|
|operating activities|||
|Net cash flows from operating activities|888,363,919.71|787,277,657.59|
|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|1,738,821.35|9,746,582.62|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
||37,525,796.60|29,462,018.07|
|investing activities|||
|Subtotal of cash inflows from investing|||
||39,264,617.95|39,208,600.69|
|activities|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|127,352,558.59|565,687,012.76|
|assets|||
|Cash paid for investment|442,518,167.48|96,483,109.00|
|Net cash paid to acquire subsidiaries|||
|and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||569,870,726.07|662,170,121.76|
|investing activities|||
|Net cash flows from investing activities|-530,606,108.12|-622,961,521.07|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Cash received from borrowings|742,195,059.14|312,748,768.18|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
||61,262,230.00|25,814,503.00|
|financing activities|||
|Subtotal of cash inflows from financing|||
||803,457,289.14|338,563,271.18|
|activities|||
|Repayment of borrowings|483,324,013.96|363,070,482.23|
|Cash paid for interest expenses and|||
||485,161,279.23|372,691,879.61|
|distribution of dividends or profit|||
|Other cash payments relating to|||
||93,507,094.33|25,943,820.20|
|financing activities|||
|Sub-total of cash outflows from|||
||1,061,992,387.52|761,706,182.04|
|financing activities|||
|Net cash flows from financing activities|-258,535,098.38|-423,142,910.86|
|IV. Effect of foreign exchange rate|||
||12,593,972.00|5,178,804.35|
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||111,816,685.21|-253,647,969.99|
|equivalents|||
|Add: Opening balance of cash and|||
||249,509,717.93|503,157,687.92|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||361,326,403.14|249,509,717.93|
|equivalents|||

2015 Annual Report of Lu Thai Textile Co., Ltd. 7. Consolidated statement of changes inowners’ equity
2015
Unit: RMB Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2015|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||||
||||||||Other|||||Minorit|Total|
|Item||||||||||||||
|||instruments||||Less:||||General||||
||Share||||Capital||compre|Specific|Surplus||Retaine|y|owners’|
|||Prefer|Perpet|||treasury||||risk||||
||capital||||reserve||hensive|reserve|reserve||d profit|interests|equity|
|||red|ual|Other||stock||||reserve||||
||||||||incomes|||||||
|||shares|bonds|||||||||||
|I. Balance at the|955,75||||1,007,0||||||3,892,0||7,016,4|
||||||||-8,440,1||742,347|||427,658||
|end of the|8,496.||||39,561.||||||66,534.||30,585.|
||||||||78.37||,832.47|||,339.63||
|previous year|00||||13||||||32||18|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||
|errors in previous||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|mergers under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||
|II. Balance at the|955,75||||1,007,0||||||3,892,0||7,016,4|
||||||||-8,440,1||742,347|||427,658||
|beginning of the|8,496.||||39,561.||||||66,534.||30,585.|
||||||||78.37||,832.47|||,339.63||
|year|00||||13||||||32||18|
|III. Increase/||||||||||||||
|decrease in the|||||106,605|11,610,|25,530,||73,300,||161,013|11,826,|260,167|
|period (“-” means|||||.84|721.68|950.68||671.81||,323.38|214.79|,044.82|
|decrease)||||||||||||||
|(I) Total||||||||||||||
||||||||25,530,||||712,193|23,349,|761,073|
|comprehensive||||||||||||||
||||||||950.68||||,243.19|785.58|,979.45|
|incomes||||||||||||||
|(II) Capital||||||||||||||
||||||106,605|11,610,||||||500,000|-11,004,|
|increased and||||||||||||||
||||||.84|721.68||||||.00|115.84|
|reduced by owners||||||||||||||
|1. Common||||||||||||||
|||||||11,610,||||||500,000|-11,110,|
|shares increased||||||||||||||
|||||||721.68||||||.00|721.68|
|by shareholders||||||||||||||
|2. Capital||||||||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|increased by||||||
|holders of other||||||
|equity instruments||||||
|3. Amounts||||||
|of share-based||||||
|payments||||||
|recognized in||||||
|owners’ equity||||||
||106,605||||106,605|
|4. Other||||||
||.84||||.84|
||||-551,17||-489,90|
|(III) Profit||73,300,||-12,023,||
||||9,919.8||2,818.7|
|distribution||671.81||570.79||
||||1||9|
|1.||||||
|||73,300,|-73,300,|||
|Appropriations to||||||
|||671.81|671.81|||
|surplus reserves||||||
|2.||||||
|Appropriations to||||||
|general risk||||||
|provisions||||||
|3.||||||
||||-477,87||-489,90|
|Appropriations to||||-12,023,||
||||9,248.0||2,818.7|
|owners (or||||570.79||
||||0||9|
|shareholders)||||||
|4. Other||||||
|(IV) Internal||||||
|carry-forward of||||||
|owners’ equity||||||
|1. New||||||
|increase of capital||||||
|(or share capital)||||||
|from capital public||||||
|reserves||||||
|2. New||||||
|increase of capital||||||
|(or share capital)||||||
|from surplus||||||
|reserves||||||
|3. Surplus||||||
|reserves for||||||
|making up losses||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|4. Other|||||||||
|(V) Specific|||||||||
|reserve|||||||||
|1. Withdrawn|||||||||
|for the period|||||||||
|2. Used in the|||||||||
|period|||||||||
|(VI) Other|||||||||
||955,75|1,007,1||||4,053,0||7,276,597,630.00|
|IV. Closing|||11,610,|17,090,|815,648||439,484||
||8,496.|46,166.||||79,857.|||
|balance|||721.68|772.31|,504.28||,554.42||
||00|97||||70|||

 2014
Unit: RMB Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2014|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||Minorit||
||||||||Other||||||Total|
|Item||||||||||||||
|||instruments||||Less:||||General||y||
||Share||||Capital||compre|Specific|Surplus||Retaine||owners’|
|||Prefer|Perpet|||treasury||||risk||interest||
||capital||||reserve||hensive|reserve|reserve||d profit||equity|
|||red|ual|Other||stock||||reserve||s||
||||||||incomes|||||||
|||shares|bonds|||||||||||
|I. Balance at the|955,80||||1,000,8||||||3,379,3||6,414,5|
||||||||-7,494,3||659,538|||426,545||
|end of the|0,496.||||54,805.||||||54,741.||99,977.|
||||||||20.36||,411.25|||,843.68||
|previous year|00||||66||||||18||41|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||
|errors in previous||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|mergers under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||
|II. Balance at the|955,80||||1,000,8||||||3,379,3||6,414,5|
||||||||-7,494,3||659,538|||426,545||
|beginning of the|0,496.||||54,805.||||||54,741.||99,977.|
||||||||20.36||,411.25|||,843.68||
|year|00||||66||||||18||41|
|III. Increase/||||||||||||||
|decrease in the|-42,00||||6,184,7||-945,85||82,809,||512,711|1,112,4|601,830|
|period (“-” means|0.00||||55.47||8.01||421.22||,793.14|95.95|,607.77|
|decrease)||||||||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|(I) Total||||||||
||||-945,85||958,725|20,651,|978,431|
|comprehensive||||||||
||||8.01||,402.84|778.73|,323.56|
|incomes||||||||
|(II) Capital||||||||
||-42,00|6,184,7||||20,539,|26,682,|
|increased and||||||||
||0.00|55.47||||282.79|038.26|
|reduced by owners||||||||
|1. Common||||||||
||-42,00|-169,05||||20,539,|20,328,|
|shares increased||||||||
||0.00|0.00||||282.79|232.79|
|by shareholders||||||||
|2. Capital||||||||
|increased by||||||||
|holders of other||||||||
|equity instruments||||||||
|3. Amounts||||||||
|of share-based||||||||
|||6,041,8|||||6,041,8|
|payments||||||||
|||53.38|||||53.38|
|recognized in||||||||
|owners’ equity||||||||
|||311,952|||||311,952|
|4. Other||||||||
|||.09|||||.09|
||||||-446,01||-403,28|
|(III) Profit||||82,809,||-40,078||
||||||3,609.7||2,754.0|
|distribution||||421.22||,565.57||
||||||0||5|
|1.||||||||
|||||82,809,|-82,809,|||
|Appropriations to||||||||
|||||421.22|421.22|||
|surplus reserves||||||||
|2.||||||||
|Appropriations to||||||||
|general risk||||||||
|provisions||||||||
|3.||||||||
||||||-363,20||-403,28|
|Appropriations to||||||-40,078||
||||||4,188.4||2,754.0|
|owners (or||||||,565.57||
||||||8||5|
|shareholders)||||||||
|4. Other||||||||
|(IV) Internal||||||||
|carry-forward of||||||||
|owners’ equity||||||||
|1. New||||||||
|increase of capital||||||||
|(or share capital)||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|from capital public||||||||
|reserves||||||||
|2. New||||||||
|increase of capital||||||||
|(or share capital)||||||||
|from surplus||||||||
|reserves||||||||
|3. Surplus||||||||
|reserves for||||||||
|making up losses||||||||
|4. Other||||||||
|(V) Specific||||||||
|reserve||||||||
|1. Withdrawn||||||||
|for the period||||||||
|2. Used in the||||||||
|period||||||||
|(VI) Other||||||||
||955,75|1,007,0|||3,892,0||7,016,4|
|IV. Closing|||-8,440,1|742,347||427,658||
||8,496.|39,561.|||66,534.||30,585.|
|balance|||78.37|,832.47||,339.63||
||00|13|||32||18|

 8. Statement of changes inowners’ equity of the Company
2015
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||2015|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:|||||Total|
|Item|Share|Preferre PerpetuOtherd shares a l bonds|||Capital||comprehe|Specific|Surplus|Retaine||
|||Preferre|Perpetu|||treasury|||||owners’|
||capital|||Other|reserve||nsive|reserve|reserve|d profit||
|||d shares|a l bonds|||stock|||||equity|
||||||||incomes|||||
|I. Balance at the||||||||||3,077,5||
||955,758,||||1,013,392||||742,347,8||5,789,013|
|end of the previous||||||||||15,240.||
||496.00||||,242.22||||32.47||,811.58|
|year||||||||||89||
|Add: change of||||||||||||
|accounting policy||||||||||||
|Correction of||||||||||||
|errors in previous||||||||||||
|periods||||||||||||
|Other||||||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|II. Balance at the|||||3,077,5||
||955,758,|1,013,392||742,347,8||5,789,013|
|beginning of the|||||15,240.||
||496.00|,242.22||32.47||,811.58|
|year|||||89||
|III. Increase/|||||||
|decrease in the||106,605.8|11,610,72|73,300,67|181,826|243,623,3|
|period (“-” means||4|1.68|1.81|,798.26|54.23|
|decrease)|||||||
|(I) Total|||||||
||||||733,006|733,006,7|
|comprehensive|||||||
||||||,718.07|18.07|
|incomes|||||||
|(II) Capital|||||||
|||106,605.8|11,610,72|||-11,504,1|
|increased and|||||||
|||4|1.68|||15.84|
|reduced by owners|||||||
|1. Common|||||||
||||11,610,72|||-11,610,7|
|shares increased|||||||
||||1.68|||21.68|
|by shareholders|||||||
|2. Capital|||||||
|increased by|||||||
|holders of other|||||||
|equity instruments|||||||
|3. Amounts|||||||
|of share-based|||||||
|payments|||||||
|recognized in|||||||
|owners’ equity|||||||
|||106,605.8||||106,605.8|
|4. Other|||||||
|||4||||4|
||||||-551,17||
|(III) Profit||||73,300,67||-477,879,|
||||||9,919.8||
|distribution||||1.81||248.00|
||||||1||
|1.|||||||
|||||73,300,67|-73,300,||
|Appropriations to|||||||
|||||1.81|671.81||
|surplus reserves|||||||
|2.|||||||
||||||-477,87||
|Appropriations to||||||-477,879,|
||||||9,248.0||
|owners (or||||||248.00|
||||||0||
|shareholders)|||||||
|3. Other|||||||
|(IV) Internal|||||||
|carry-forward of|||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|owners’ equity|||||||
|1. New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from capital public|||||||
|reserves|||||||
|2. New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from surplus|||||||
|reserves|||||||
|3. Surplus|||||||
|reserves for|||||||
|making up losses|||||||
|4. Other|||||||
|(V) Specific|||||||
|reserve|||||||
|1. Withdrawn|||||||
|for the period|||||||
|2. Used in the|||||||
|period|||||||
|(VI) Other|||||||
||||||3,259,3|6,032,637,165.81|
|IV. Closing|955,758,|1,013,498|11,610,72|815,648,5|||
||||||42,039.||
|balance|496.00|,848.06|1.68|04.28|||
||||||15||

2014
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||2014|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:|||||Total|
|Item|Share|Preferre PerpetuOtherd shares a l bonds|||Capital||comprehe|Specific|Surplus|Retaine||
|||Preferre|Perpetu|||treasury|||||owners’|
||capital|||Other|reserve||nsive|reserve|reserve|d profit||
|||d shares|a l bonds|||stock|||||equity|
||||||||incomes|||||
|I. Balance at the||||||||||2,695,4||
||955,800,||||1,007,207||||659,538,4||5,317,981|
|end of the previous||||||||||34,638.||
||496.00||||,486.75||||11.25||,032.41|
|year||||||||||41||
|Add: change of||||||||||||
|accounting policy||||||||||||
|Correction of||||||||||||
|errors in previous||||||||||||
|periods||||||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Other||||||
|II. Balance at the||||2,695,4||
||955,800,|1,007,207|659,538,4||5,317,981|
|beginning of the||||34,638.||
||496.00|,486.75|11.25||,032.41|
|year||||41||
|III. Increase/||||||
|decrease in the|-42,000.|6,184,755|82,809,42|382,080|471,032,7|
|period (“-” means|00|.47|1.22|,602.48|79.17|
|decrease)||||||
|(I) Total||||||
|||||828,094|828,094,2|
|comprehensive||||||
|||||,212.18|12.18|
|incomes||||||
|(II) Capital||||||
||-42,000.|6,184,755|||6,142,755|
|increased and||||||
||00|.47|||.47|
|reduced by owners||||||
|1. Common||||||
||-42,000.|-169,050.|||-211,050.|
|shares increased||||||
||00|00|||00|
|by shareholders||||||
|2. Capital||||||
|increased by||||||
|holders of other||||||
|equity instruments||||||
|3. Amounts||||||
|of share-based||||||
|||6,041,853|||6,041,853|
|payments||||||
|||.38|||.38|
|recognized in||||||
|owners’ equity||||||
|||311,952.0|||311,952.0|
|4. Other||||||
|||9|||9|
|||||-446,01||
|(III) Profit|||82,809,42||-363,204,|
|||||3,609.7||
|distribution|||1.22||188.48|
|||||0||
|1.||||||
||||82,809,42|-82,809,||
|Appropriations to||||||
||||1.22|421.22||
|surplus reserves||||||
|2.||||||
|||||-363,20||
|Appropriations to|||||-363,204,|
|||||4,188.4||
|owners (or|||||188.48|
|||||8||
|shareholders)||||||
|3. Other||||||
|(IV) Internal||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|carry-forward of||||||
|owners’ equity||||||
|1. New||||||
|increase of capital||||||
|(or share capital)||||||
|from capital public||||||
|reserves||||||
|2. New||||||
|increase of capital||||||
|(or share capital)||||||
|from surplus||||||
|reserves||||||
|3. Surplus||||||
|reserves for||||||
|making up losses||||||
|4. Other||||||
|(V) Specific||||||
|reserve||||||
|1. Withdrawn||||||
|for the period||||||
|2. Used in the||||||
|period||||||
|(VI) Other||||||
|||||3,077,5||
|IV. Closing|955,758,|1,013,392|742,347,8||5,789,013|
|||||15,240.||
|balance|496.00|,242.22|32.47||,811.58|
|||||89||

III. Company Profile
Lu Thai Textile Co., Ltd. (hereinafter referred to as the Company) is a joint venture invested by Zibo Lucheng Textile Investment Co., Ltd (originally named Zibo Lucheng Textile Co., Ltd, hereinafter referred to as Lucheng Textile) and Thailand Tailun Textile Co., Ltd. On Feb. 3, 1993, the Company is approved by the former Ministry of Foreign Trade and Economy of the State (1993) in WJMZEHZ No. 59 to convert into a joint-stock enterprise. Zibo Administration for Industry and Commerce issued the Company corporate business license with the registration No. of QGLZZZ No. 000066. In July 1997, the Company is approved by the Securities Committee of the Department of the State in the ZWF (1997) No. 47 to issue 80 million shares of domestically listed foreign share( B-shares) at the price of RMB 1.00 per share. Upon approved by Shenzhen Stock Exchange with No. (1997) 296 Listing Notice, the Company is listed on the Shenzhen Stock Exchange on August 19, 1997 with B-shares stock code of 200726. On November 24, 2000, approved by ZJGSZ[2000] No.199 by CSRC, the Company
increased publication of 50 million shares of general share (A-shares) at the book value of RMB 1.00, which are
listed on the Shenzhen Stock Exchange on December 25, 2000 with A-shares stock code of 000726 through
approval by Shenzhen Stock Exchange with No. (2000) 162 Listing Notice. As approved by 2000Shareholders’
2015 Annual Report of Lu Thai Textile Co., Ltd. General Meeting in May, 2001, the Company carried out the distribution plan that 10 shares of capital public reserve are converted to 3 more shares for each 10 shares. As approved by Resolutions of 2001Shareholders’ General Meeting in June 2002, the Company implemented the distribution plan that 10 shares of capital public reserve are converted 3 more shares for each 10 shares again. As approved by 2002Shareholders’ General Meeting in May 2003, the Company implemented the distribution plan that 10 shares of capital public reserve are 2 more shares for each 10 shares, and inneremployees’ shared increased to 40.56 million shares. As examined and approved by ZJGSZ No.[2000] 199 of CSRC, the inneremployees’ shares will start circulation 3 years later since listing on the A-share market. On Dec. 25, 2003, the inneremployees’ shares reach 3 years since listing on the A-share stock market, and they set out circulation on Dec.26, 2003. As approved by theShareholders’ General Meeting 2006 held in June 2007, the Company implemented the plan on converting 10 shares to all its shareholders with capital reserves for every 10 shares. After capitalization, the registered capital of the Company was RMB 844.8648 million. The Company, in accordance with the official reply on approving Lu Thai Textile Co., Ltd. to issue additional shares (ZJXK[2008] No. 890 document) from CSRC, issued the Renminbi common shares (A shares) amounting to 150 million shares on 8 Dec. 2008. According to the relevant resolution of the 2nd SpecialShareholders’ General Meeting for 2011, the relevant resolution of the
15th
Session of the
6th
Board of Directors, the Opinion of China Securities Regulatory Commission on the Restricted Share Incentive Plan of Lu Thai Textile Co., Ltd. (Shang-Shi-Bu-Han[2011] No. 206), the Company applied for a registered capital increment of RMB 14.09 million, which was contributed by restricted share incentive receivers with monetary funds. In accordance with the resolution of Proposal on Repurchasing and Canceling Partial Restricted Shares already Granted for the Original Incentive Targets not Reaching the Incentive Conditions made at the
23rd Session of the
6th
Board of Directors on 13 Aug. 2012, the Company canceling a total of 60,000.00 shares already granted for the original incentive targets not reaching the incentive conditions. According to the second temporary resolution of Proposal on counter purchase of part of the domestic listed foreign share (B share) on 25 Jun. 2012, the Company counter purchase domestic listed foreign share (B share) 48,837,300 shares. According to the Proposal on Repurchase and Cancel Part of Unlocked Restricted Share of the Original Incentive Personnel not Conforming to the Incentive Condition, Proposal on Repurchase and Cancel unlocked Restricted Share in Second Unlocked Period of all the Incentive Personnel reviewed and approved by the
26th
meeting of
6th
session of the board of the directors on 27 Mar. 2013, the Company repurchase and cancel 4,257,000 shares owned by original people whom to motivate. According to the Proposal on Repurchase and Write-off of Partly of the Original Incentive Targets Not Met with the Incentive Conditions but Granted Restricted Shares approved on the 11th Session of the
7th
Board of Directors on 11 Jun. 2014, to execute repurchase and write-off of the whole granted shares of 42,000 shares of the original incentive targets not met with the incentive targets of the Company. Up to 31 Dec. 2014, the registered capital of the Company was of RMB955.7585 million.
TheCompany’s registered address: No. 11, Mingbo Road, Hi-tech Development Zone, Zibo, Shandong
TheCompany’s legal representative: Liu Zibin
TheCompany’s business scope includes the production, processing and sales business of cotton yarn, yarn dyed fabrics, shirts, fashion accessories, health underwear and other textile products and their mating products; design,R&D and technology services of the textile and garment products; acquisition and export of products not under exclusive rights or quota licenses; and hotel, guesthouses, catering, conferences, and training services; rental business of the self-owned houses and land; the construction and management of the purified water projects. TheCompany’s financial statements have been approved for issue by the Board of Directors of the Company on 28 Mar. 2016.
There were 15 subsidiaries included into the consolidation scope of the Company in 2015, and for the details,
2015 Annual Report of Lu Thai Textile Co., Ltd. please refer to Notes IX. Equities among Other Entities. There was 1 subsidiary increased of 2015 in the consolidation scope over the last year, and please refer to Notes VIII. Changes in Consolidation Scope for details. IV. Basis for the preparation of financial statements
1. Preparation basis
With the going-concern assumption as the basis and based on transactions and other events that actually occurred, the Group prepared financial statements in accordance with<The Accounting Standards for BusinessEnterprises—BasicStandard> issued by the Ministry of Finance with Decree No. 33 and revised with Decree No. 76, the 41 specific accounting standards, the Application Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued and revised from 15 Feb. 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15– General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements.
V. Important accounting policies and estimations
Indication of specific accounting policies and estimations:
The Company and each subsidiary mainly engage in the production and operation of textile products. The Company and each subsidiary according to the actual production and operation characteristics and the regulations of the relevant ASBE, formulated certain specific accounting polices and accounting estimates of the transactions and events such as recognizing the revenues, and please refer to each description of the section for details. As for the notes to the important accounting judgment and estimations made by the management level, please refer to the “Other important accounting policies and estimations” of the section.
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the Accounting Standards for Business Enterprises, which factually and completely present theCompany’s, and theCompany’s financial positions as at 31 Dec. 2015, business results and cash flows for the year of 2015, and other relevant information. In addition, theCompany’s and theCompany’s financial statements meet the requirements of disclosing financial statements and notes thereto stated in the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15– General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission.
2. Fiscal period
TheCompany’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year. The
2015 Annual Report of Lu Thai Textile Co., Ltd.Company’s fiscal year starts on 1 Jan. and ends on 31 Dec. of every year according to the Gregorian calendar. 3. Operating cycle
Normal operating cycle refers to the period from the Group purchases the assets for processing to realize the cash or cash equivalents. The Group regards 12 months as an operating cycle and regards which as the partition criterion of the mobility of the assets and liabilities.
4. Recording currency
Renminbi (RMB) is regarded as the prevailing currency used in the main economic circumstances of the Company and its domestic subsidiaries. The Company and its domestic subsidiaries adopt RMB as the recording currency. The Company and its overseas subsidiaries confirm to adopt HK Dollar, US Dollar and Vietnamese Dong as the recording currency according their major economic environment of the operating. When preparing the financial statements for the reporting period, the Company adopted RMB as the recording currency.
5. Accounting treatment methods for business combinations under the same control or not under the same control
Business combinations, it is refer to two or more separate enterprises merge to form a reporting entity transactions or events. Business combination is divided into under the same control and those non under the same control.
(1) Business combinations under the same control
A business combination under the same control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or the same parties both before and after the business combination and on which the control is not temporary. In a business combination under the same control, the party which obtains control of other combining enterprise(s) on the combining date is the combining party, the other combining enterprise(s) is (are) the combined party. The “combining date” refers to the date on which the combining party actually obtains control on the combined party.
The assets and liabilities that the combining party obtains in a business combination shall be measured on the basis of their carrying amount in the combined party on the combining date. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional paid-in capital (share premium) shall be adjusted. If the additional paid-in capital (share premium) is not sufficient to be offset, the retained earnings shall be adjusted.
The direct cost for the business combination of the combining party shall be recorded into the profits and losses at the current period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination. In a business combination not under the same control, the party which obtains the control on other combining enterprise(s) on the purchase date is the
2015 Annual Report of Lu Thai Textile Co., Ltd. acquirer, and other combining enterprise(s) is (are) the acquiree.
For a business combination not under the same control, the combination costs shall include the fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the acquirer in exchange for the control on the acquiree, the expenses for audit, legal services and assessment, and other administrative expenses, which are recorded into the profits and losses in the current period. The trading expenses for the equity securities or debt securities issued by the acquirer as the combination consideration shall be recorded into the amount of initial measurement of the equity securities or debt securities. The involved contingent consideration shall be recorded into the combination costs at its fair value on the acquiring date. Where new or further evidences emerge, within 12 months since the acquiring date, against the existing circumstances on the acquiring date and the contingent consideration thus needs to be adjusted, the combined goodwill shall be adjusted accordingly. The combination costs of the acquirer and the identifiable net assets obtained by it in the combination shall be measured according to their fair values at the acquiring date. The acquirer shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as business reputation. Where the combination costs are less then the fair value of the identifiable net assets it obtains from the acquiree, the acquirer shall re-examine the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities it obtains from the acquiree as well as the combination costs. If, after the reexamination, the combination costs are still less than the fair value of the identifiable net assets it obtains from the acquiree, the acquirer shall record the balance into the profits and losses of the current period.
As for the deductible temporary differences the acquirer obtains from the acquiree which are not recognized into deferred income tax liabilities due to their not meeting the recognition standards, if new or further information shows that the relevant situation has existed on the acquiring date and the economic benefits brought by the deductible temporary differences the acquirer obtains from the acquiree on the acquiring date can be realized, they shall be recognized into deferred income tax assets and the relevant goodwill shall be reduced. Where the goodwill is not sufficient to be offset, the difference shall be recognized into the profits and losses in the current period. In other circumstances than the above, where the deductible temporary differences are recognized into deferred income tax assets on the acquiring date, they shall be recorded into the profits and losses in the current period.
In a business combination not under same control realized by two or more transactions of exchange, according to about the
5th
Notice about the Treasury Issuing the Accounting Standards for Enterprises (Finance accounting)[2012] No. 19 Criterion about the “package deal” (see Notes IV, 4 (2)), Whether the deals are “package deal” or not, belong to the “package deal”, see the previous paragraphs described in this section and Notes IV, 10 “long term equity investment transaction” and conduct accounting treatment, those not belong to the "package deal" distinguish between the individual financial statements and the consolidated financial statements and conduct relevant accounting treatment.
In the individual financial statements, the sum of the book value and new investment cost of the Company holds in the acquiree before the acquiring date shall be considered as initial cost of the investment. Other related comprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for
2015 Annual Report of Lu Thai Textile Co., Ltd. the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gains).
In theCompany’s consolidated financial statements, as for the equity interests that the Company holds in the acquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date; the positive difference between their fair values and carrying amounts shall be recorded into the investment gains for the period including the acquiring date. Other related comprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gains on the acquiring date).
6. Methods for preparing consolidated financial statements
(1) Principle for determining the consolidation scope
The consolidation scope for financial statements is determined on the basis of control. The term “control” is the power of the Company upon an investee, with which it can take part in relevant activities of the investee to obtain variable returns and is able to influence the amount of returns. The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. A subsidiary is an enterprise or entity controlled by the Company.
(2) Methods for preparing the consolidated financial statements
Subsidiaries are fully consolidated from the date on which the Company obtains control on their net assets and operation decision-making and are de-consolidated from the date when such control ceases. As for a disposed subsidiary, its operating results and cash flows before the disposal date has been appropriately included in the consolidated income statement and cash flow statement; and as for subsidiaries disposed in the current period, the opening items in the consolidated balance sheet are not adjusted. For a subsidiary acquired in a business combination not under the same control, its operating results and cash flows after the acquiring date have been appropriately included in the consolidated income statement and cash flow statement, and the opening items and comparative items in the consolidated financial statements are not adjusted. For a subsidiary acquired in a business combination under the same control or a combined party obtained in a takeover, its operating results and cash flows from the beginning of the reporting period of the combination to the combination date have been appropriately included in the consolidated income statement and cash flow statement, and the comparative items in the consolidated financial statements are adjusted at the same time.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are inconsistent between the Company and subsidiaries. For a subsidiary acquired from a business combination not under the same control, the individual financial statements of the subsidiary are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant inter-group balances, transactions and unrealized profits are offset in the
2015 Annual Report of Lu Thai Textile Co., Ltd. consolidated financial statements.
The portion of asubsidiary’sshareholders’ equity and the portion of asubsidiary’s net profits and losses for the period not held by the Company are recognized as minority interests and minority shareholder profits and losses respectively and presented separately undershareholders’ equity and net profits in the consolidation financial statements. The portion of asubsidiary’s net profits and losses for the period that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by minority shareholders exceeds the portion enjoyed by minority shareholders in thesubsidiary’s openingowners’ equity, minority interests are offset.
Where the Company losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the residual equity interests, minus the portion in the originalsubsidiary’s net assets measured on a continuous basis from the acquisition date that is enjoyable by the Company according to the original shareholding percentage in the subsidiary, is recorded in investment gains for the period when theCompany’s control on the subsidiary ceases. Other comprehensive incomes in relation to the equity investment in the original subsidiary are treated on the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And subsequent measurement is conducted on the residual equity interests according to the No. 2 Accounting Standard for Business Enterprises—Long-term Equity Investments or the No. 22 Accounting Standard for BusinessEnterprises—Recognition and Measurement of Financial Instruments. For details, see “Long Term Equity Investment” or “Financial Instruments”.
Where the Company losses control on its original subsidiaries due to step by step disposal of equity investments through multiple transactions, it need to distinguish the Group losses control on its subsidiaries due to disposal of equity investments whether belongs to a package deal. All the transaction terms, conditions and economic impact of the disposal ofsubsidiaries’ equity investment are in accordance with one or more of the following conditions, which usually indicate the multiple transactions, should be considered as a package deal for accounting treatment.① These deals are at the same time or under the condition of considering the influence of each other to concluded;② These transactions only be as a whole can achieve a complete business result;③ The occurrence of a deal depends on at least one othertransactions；④ A deal alone is not economical, it is economical with other trading together. Those not belong to a package deal, each of them a deal depends on circumstances respectively conduct accounting treatment in accordance with the applicable principles of “part disposal of subsidiaries of a long-term equity investment under the condition of not losing control on its subsidiaries” (see “Long Term Equity Investment”) and “Where the Company losses control on its original subsidiaries due to disposal of some equity investments or other reasons” (see the front paragraph) relevant transactions of the Company losses control on its subsidiaries due to disposal of equity investments belonging to a package deal, considered as a transaction and conduct accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal investment are
2015 Annual Report of Lu Thai Textile Co., Ltd. confirmed as other comprehensive income in consolidated financial statements, which together transferred into the current profits and losses in the lose of control, when the Company losing control on its subsidiary.
7. Category of the joint venture arrangement and the accounting treatment of the joint operation
8. Recognition standard for cash and cash equivalents
The term “cash” refers to cash on hand and deposits that are available for payment at any time. The term “cash equivalents” refers to short-term (within 3 months from the purchase date) and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
9. Foreign currency businesses and translation of foreign currency financial statements
(1) Accounting treatments for translation of foreign currency transactions
As for a foreign currency transaction, the Company shall convert the amount in a foreign currency into amount in its bookkeeping base at the spot exchange rate (usually referring to the central parity rate announced by thePeople’s Bank of China, the same below) of the transaction date, while as for such transactions as foreign exchange or involving in foreign exchange, the Company shall converted into amount in the bookkeeping base currency at actual exchange rate the transaction is occurred.
(2) Accounting treatments for translation of foreign currency monetary items and non-monetary items
On the balance sheet date, the foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The exchange difference arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be recorded in the profits and losses in the current period, excluding the following situations:① the exchange difference arising from foreign currency loans related to acquisition of fixed assets shall be treated at the principle of capitalization of borrowing costs;② the exchange difference arising from the hedging instruments used for effective hedging of net overseas operation investments shall be recorded into other comprehensive incomes, and shall be recognized into current gains and losses when the net investments are disposed; and③ the exchange difference arising from change in the book balance of foreign currency monetary items available for sale except the amortized costs shall be recorded into other comprehensive gains and losses.
A foreign currency non-monetary item measured at the historical costs shall still be translated at the spot exchange rate on the transaction date. Where the foreign non-monetary items measured at the fair value shall be converted into amount in its bookkeeping base currency at spot exchange rate, the exchange gains and losses arising thereof shall be treated as change in fair value, and recorded into the current period gains and losses or as other comprehensive incomes.
(3) Translation of foreign currency financial statements
When it involves overseas business in preparing the consolidated financial statement, for the translation difference of foreign currency monetary items of net investment in overseas business
2015 Annual Report of Lu Thai Textile Co., Ltd. arising from the change in exchange rate, it shall be recorded into the item of “difference of foreign currency financial statement translation” under theowners’ equity; and be recorded into disposal gains and losses at current period when disposing overseas business.
The foreign currency financial statement of overseas business should be translated in to RMB financial statement by the following methods: The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet date. Among theowner’s equity items, except for the items as “undistributed profits”, other items shall be translated at the spot exchange rate at the time when they are incurred. The income and expense items in the profit statements shall be translated at the spot exchange rate of the transaction date. The undistributed profits at year-begin is the undistributed profits at the end of last year after the translation; undistributed profits at year-end shall be listed as various distribution items after the translation; after the translation, the balance between assets and the sum of liabilities andowners’ equities shall be recorded into other comprehensive gains and losses as difference of foreign currency translation. Where an enterprise disposes of an overseas business without the control right, it shall shift the differences, which is presented under the items of theowner’s equities in the balance sheet and which arises from the translation of foreign currency financial statements relating to this overseas business, into the disposal profits and losses of the current period by all or proportion of the disposed overseas business.
Foreign cash flow shall be translated at the spot exchange rate of the date of cash flow incurred. The influence of exchange rate on the cash flow shall be adjustment item and individually listed in the cash flow statement.
And the opening balance and the actual balance of last year shall be listed at the amounts after translation of foreign currency financial statement in last year.
Where the control of the Company over an overseas operation ceases due to disposal of all or some of theCompany’sowner’s equity in the overseas operation or other reasons, the foreign-currency statement translation difference belonging to the parentcompany’sowner’s equity in relation to the overseas operation which is stated under theshareholders’ equity in the balance sheet shall be all restated as gains and losses of the disposal period.
Where theCompany’s equity in an overseas operation decreases due to disposal of some equity investment or other reasons but the Company still has control over the overseas operation, the foreign-currency statement translation difference in relation to the disposed part of the overseas operation shall be recorded into minority interests instead of current gains and losses. Ifwhat’s disposed is some equity in an overseas associated enterprise or joint venture, the foreign-currency statement translation difference related to the overseas operation shall be recorded into the gains and losses of the current period of the disposal according to the disposal ratio.
10. Financial instruments
The Company recognizes a financial asset or liability when it becomes a party of the relevant financial instrument contract. Financial assets and liabilities are measured at fair value in initial recognition. As for the financial assets and liabilities measured at fair value of which changes are recorded into current gains and losses, the relevant dealing expenses are directly recorded into gains and losses; and the dealing expenses on other kinds of financial assets and liabilities are included in the amounts initially recognized.
2015 Annual Report of Lu Thai Textile Co., Ltd. (1) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that a market participant shall receive for selling an asset or shall pay for transferring a liability in an orderly transaction on the measurement date. As for the financial assets or financial liabilities for which there is an active market, the quoted prices in the active market shall be used to determine the fair values thereof. The quoted prices in the active market refers to the prices available from stock exchange,broker’s agencies, guilds, pricing organization and etc., which represent the actual trading price under equal transaction. Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques, including the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization method and the option pricing model, etc., to determine its fair value.
(2) Classification, recognition and measurement of financial assets
The purchase and sale of financial assets under the normal ways shall be recognized and stopped to be recognized respectively at the price of transaction date. Financial assets shall be classified into the following four categories when they are initially recognized: (a) the financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period, (b) the investments which will be held to their maturity; (c) loans and the account receivables; and (d) financial assets available for sale.
① The financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period
Including transactional financial assets and the financial assets which are designated to be measured at their fair value when they are initially recognized and of which the variation is recorded into the profits and losses of the current period;
The financial assets meeting any of the following requirements shall be classified as transactional financialassets：A. The purpose to acquire the said financial assets is mainly for selling them in the near future; B. Forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the enterprise may manage the combination by way of short-term profit making in the near future; C. Being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity instruments.
A transactional financial asset is subsequently measured at the fair value. The gains and losses arising from the fair value changes, as well as the dividend and interest incomes from the financial asset, are recorded in the gains and losses for the current period.
② Held-to-maturity investment
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise is able to hold until its maturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured at the post-amortization costs, the profits and losses that arise when such financial assets or financial
2015 Annual Report of Lu Thai Textile Co., Ltd. liabilities are terminated from recognition, or are impaired or amortized, shall be recorded into the profits and losses of the current period.
The actual interest rate method refers to the method by which the post-amortization costs and the interest incomes of different installments or interest expenses are calculated in light of the actual interest rates of the financial assets or financial liabilities (including a set of financial assets or financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future cash flow of a financial asset or financial liability within the predicted term of existence or within a shorter applicable term into the current carrying amount of the financial asset or financial liability. When the actual interest rate is determined, the future cash flow shall be predicted on the basis of taking into account all the contractual provisions concerning the financial asset or financial liability (the future credit losses shall not be taken into account).and also the various fee charges, trading expenses, premiums or reduced values, etc., which are paid or collected by the parties to a financial asset or financial liability contract and which form a part of the actual interest rate.
③ Loans and the accounts receivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no quotation in the active market, with fixed recovery cost or recognizable.
Financial assets that are defined as loans and the accounts receivables by the Company including notes receivables, accounts receivables, interest receivable, dividends receivable and other receivables etc..
Loans and the accounts receivables are made follow-up measurement on the basis of post-amortization costs employing the effective interest method. Gains or loss arising from the termination recognition, impairment occurs or amortization shall be recorded into the profits and losses of the current period.
④ Assets available for sales
Assets available for sales including non-derivative financial asset that has been assigned as assets available for sales on the initial recognition and financial assets excluded those measured at fair value and of which the variation into profits and losses of the current period, they are some financial assets, loans and accounts receivables, held-to-maturity investment.
The cost at the period-end of the available-for-sale liabilities instruments should be confirmed according to its amortized cost method, that is the initially recognized amount which deduct the principal that had been repaid, to plus or minus the accumulative amortization amount formed by the amortization between the difference of the initially recognized amount and the amount on the due date that adopted the actual interest rate method, and at the same time deduct the amount after the impairment loss happened. The cost at the period-end of the available-for-sale liabilities instruments is its initial cost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensiveincome，and be carried forward when the said financial assets stopped recognition, then it shall be recorded into the profits and losses of the current period. But, the equity instrument investment which neither have quotation in the active market nor its fair value could not be reliable measured, as well as the derivative financial assets that concern with the equity instruments and should be settled through handing over to its equity instruments, should take the follow-up measurement according to the cost.
Interest receive during the holding of assets available for sales and cash dividends with distribution
2015 Annual Report of Lu Thai Textile Co., Ltd. announcement by invested companies, it shall be recorded into the profits and losses of the current period.
(3) Impairment of financial assets
The Company assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
The Company carries out a separate impairment test for every financial asset which is individually significant. As for a financial asset which is individually insignificant, an impairment test is carried out separately or in the financial asset group with similar credit risk. Where the financial asset (individually significant or insignificant) is found not impaired after the separate impairment test, it is included in the financial asset group with similar credit risk and tested again on the group basis. Where the impairment loss is recognized for an individual financial asset, it is not included in the financial asset group with similar credit risk for an impairment test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the reserving date.
② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument investment is serious and not temporarily after comprehensive considering relevant factors, it reflected that the available-for-sale equity instrument investment occurred impairment. Of which, the “serious decline” refers to the accumulative decline range of the fair value over20%; while the “non-temporary decline” refers to the consecutive decline time of the fair value over 12 months. Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the fair value of the capital reserve which is directly included are transferred out and recorded in the profits and losses for the current period. The accumulative losses transferred out are the balance obtained from the initially obtained cost of the said financial asset after deducting the principals as taken back, the amortized amount, the current fair value and the impairment loss originally recorded in the profits and losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within the accounting periods thereafter, there is any objective evidence proving that the value of the said financial asset has been restored and the restoration is objectively related to the events that occur after the impairment loss was recognized, the originally recognized impairment loss is reversed. The impairment losses on the available-for-sale equity instrument investments are reversed and recognized as other comprehensive incomes, and the impairment losses on the available-for-sale liability instruments are reversed and recorded in the profits and losses for the current period. The impairment loss incurred to an equity instrument investment for which there is no quoted price in the active market and whose fair value cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument investment and which must be
2015 Annual Report of Lu Thai Textile Co., Ltd. settled by delivering the said equity investment, is not reversed.
(4) Recognition and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition of it is terminated:① The contractual rights for collecting the cash flow of the said financial asset are terminated;② The said financial asset has been transferred and nearly all of the risks and rewards related to the ownership of the financial asset to the transferee; or③ The said financial asset has been transferred. And the Company has ceased its control on the said financial asset though it neither transfers nor retains nearly all of the risks and rewards related to the ownership of the financial asset.
Where the Company neither transfers nor retains nearly all of the risks and rewards related to the ownership of a financial asset, and it does not cease its control on the said financial asset, it recognizes the relevant financial asset and liability accordingly according to the extent of its continuous involvement in the transferred financial asset. The term "continuous involvement in the transferred financial asset" refers to the risk level that the enterprise faces resulting from the change of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between the amounts of the following 2 items is recorded in the profits and losses of the current period: (1) The book value of the transferred financial asset; and (2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book value of the transferred financial asset is apportioned between the portion whose recognition has been stopped and the portion whose recognition has not been stopped according to their respective relative fair value, and the difference between the amounts of the following 2 items is included into the profits and losses of the current period: (1) The summation of the consideration received from the transfer and the portion of the accumulative amount of changes in the fair value originally recorded in other comprehensive incomes which corresponds to the portion whose recognition has been stopped; and (2) The amortized carrying amounts of the aforesaid amounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Company needs to determine whether almost all of the risks and rewards of the financial asset ownership are transferred. If almost all of the risks and rewards of the financial asset ownership had been transferred to the transferee, derecognize the financial assets. For almost all of the risks and rewards of the financial asset ownership retained, do not end to recognize the financial assets. For which neither transfer or retain almost all of the risks and rewards of the financial asset ownership, continuously judge whether the Company retain the control of the assets, and conduct accounting treatment according to the principle of mentioned in the previous paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair values and whose changes are recorded in current gains and losses and other financial liabilities. Financial liabilities are initially recognized at their fair values. As for a financial liability measured at fair value and whose changes are recorded in current gains and losses, the relevant trading expense is directly recorded in the profits and losses for the current period. As for other financial liabilities, the relevant trading expenses are recorded in the initially recognized amounts.
2015 Annual Report of Lu Thai Textile Co., Ltd.① Financial liabilities measured at fair values and whose changes are recorded in current gains and losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities designated to be measured at fair values and whose changes are recorded in current gains and losses in the initial recognition under the same conditions where such financial assets are divided into transactional financial assets and financial assets designated to be measured at fair values and whose changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and losses are subsequently measured at their fair values. Gains or losses arising from the fair value changes, as well as the dividend and interest expenses in relation to the said financial liabilities, are recorded in the profits and losses for the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted price in an active market and whose fair value cannot be reliably measured and which must be settled by delivering the equity instrument, it is subsequently measured on the basis of costs. Other financial liabilities are subsequently measured according to the amortized cost using the actual interest rate method. Gains or losses arising from de-recognition or amortization of the said financial liabilities is recorded in the profits and losses for the current period.
(6) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability, and at the same time recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits and losses of the current period for the gap between the book value which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed) (7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are substantially re-measured at fair value. The resulting gain and loss is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
2015 Annual Report of Lu Thai Textile Co., Ltd. When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The Company issues (including refinancing), re-purchases, sells or written-offs the equity instrument as the disposing of the changes of the equity. The Group not recognized the changes of the fair value of the equity instrument. The transaction expenses related to the equity transaction would be deducted from the equity.
All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted fromshareholders’ equity. The Company does not recognize any changes in the fair value of equity instruments.
11. Receivables
(1) Accounts receivable with significant single amount for which the bad debt provision is made individually
|||
|-|-|
|Judgement basis or monetary||
|standards of provision for bad||
||Receivables with the amount of RMB 5 million or more than RMB 5 million should recognize as|
|debts of the individually||
||the receivables with significant single amount.|
|significant accounts||
|receivable||
||The Company made an independent impairment test on receivables with significant single amounts;|
|Method of individual||
||the financial assets without impairment by independent impairment test should be included in|
|provision for bad debts of the||
||financial assets portfolio with similar credit risk to take the impairment test. Receivables was|
|individually significant||
||recognized with impairment should no longer be included in receivables portfolio with similar credit|
|accounts receivable||
||risk to take the impairment test.|

(2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics
|||
|-|-|
|Name of portfolios|Bad debt provision method|
|Aging group|Aging analysis method|

In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Inapplicable
||||
|-|-|-|
||Withdrawal proportion for accounts|Withdrawal proportion for other accounts|
|Age|||
||receivable (%)|receivable (%)|
|Within 1 year (including 1 year)|5.00%|5.00%|
|1-2 years|10.00%|10.00%|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|2-3 years|20.00%|20.00%|
|Over 3 years|30.00%|30.00%|

 In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable√ Inapplicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
|||
|-|-|
||Receivables have dispute with the other parties or involving|
||lawsuit and arbitration; receivables have obvious indication|
|Reason of individually withdrawing bad debt provision||
||showing that the debtors are likely to fail to perform the duty of|
||repayment, etc.|
||The Company made independent impairment test on receivables|
||with insignificant amount but with the following characteristics,|
||if any objective evidence shows that the accounts receivable has|
|Withdrawal method for bad debt provision|been impaired, impairment loss shall be recognized on the basis|
||of the gap between the current values of the future cash flow|
||lower than its book value so as to withdraw provision for bad|
||debts.|

12. Inventory
(1) Classification
Inventories mainly include raw materials, work-in-progress, product processed on entrustment, consumptive biological assets and stock products etc.
(2) Valuation method of inventories acquiring and issuing
The inventories should be measured by the actual cost when acquired, and the cost of the inventories including the procurement cost, processing cost and other cost. Bulk chemical raw materials, work-in-progress goods and finished products should be measured by the actual cost and should carry forward the cost by weighted average method when issuing; auxiliary materials, packing materials should be measured by actual cost and adopt the planned cost for accounting as well as included the difference between the actual cost and the planned cost into the material cost variance and according the material cost variance rate, work out the material cost variance which should be shared at the end of the month, and to adjust the planned cost that had issued the materials as the actual cost; low priced and easily worn articles should be recorded by actual cost and should adopt the one-time amortization method for accounting when consuming.
(3) Basis for determining net realizable value of inventories and provision methods for decline in
value of inventories
Net realizable value is the estimated selling price in the ordinary course of business less the
estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes.
2015 Annual Report of Lu Thai Textile Co., Ltd. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purpose of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizable value is below the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value is determined normally by the difference of the cost of individual item less its realizable value. For large quantity and low value items of inventories, provision for decline in value is made based on categories of inventories. For items of inventories relating to a product line that are produced and marketed in the same geographical area, have the same or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product line provision for decline in value is determined on an aggregate basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss for the period.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of the low-value consumption goods and packing articles
For the low-value consumption goods, should be amortized by one-off amortization method when consuming; and for the packing articles, should be amortized by one-off amortization method when consuming.
13. Assets held for sale
14. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that the Company has control, joint control or significant influence over the investees. The long-term equity investment that the Company does not have control, joint control or significant influence over the investees, should be recognized as available-for-sale financial assets or be measured by fair value with the changes should be included in the financial assets accounting of the current gains and losses, and please refer the details of the accounting polices to “financial instrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Company and the relevant activities of the arrangement should be decided only after the participants which share the control right make consensus. Significant influence refers to the power of the Company which could anticipate in the finance and the operation polices of the investees, but could not control or jointly control the formulation of the policies with the other parties.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the same control, the share of the book value of theowner’s equity of the merged enterprise, on the date of merger, is regarded as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the
2015 Annual Report of Lu Thai Textile Co., Ltd. capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equities of the combined party which respectively acquired through multiple transaction under the same control that ultimately form into the combination of the enterprises under the same control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment, and as for the difference between the initial investment cost of the long-term equity investment and sum of the book value of the long-term equity investment before the combination and the book value of the consideration of the new payment that further required on the combination date, should adjust the capital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity investment held before the combination date which adopted the equity method for accounting, or the other comprehensive income confirmed for the available-for-sale financial assets, should not have any accounting disposal for the moment.
For the long-term investment required from the business combination under different control, the initial investment cost regarded as long-term equity investment on the purchasing date according to the combination cost, the combination costs shall be the sum of the fair values of the assets paid, the liabilities incurred or assumed and the equity securities issued by the Company. The equities of the acquirees which respectively acquired through multiple transaction that ultimately form into the combination of the enterprises under the different control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, the sum of the book value of the original held equity investment of the acquirees and the newly added investment cost should be regarded as the initial investment cost of the long-term equity investment that changed to be accounted by cost method. If the original held equity is calculated by cost method, the other relevant comprehensive income would not have any accounting disposal for the moment. If the original held equity investment is the financial assets available for sale, its difference between the fair value and the book value as well as the accumulative changes of the fair value that include in the other comprehensive income, should transfer into the current gains and losses.
The commission fees for audit, law services, assessment and consultancy services and other relevant expenses occurred in the business combination by the combining party or the purchase party, shall be recorded into current profits and losses upon their occurrence; the transaction expense from the issuance of equity securities or bonds securities which are as consideration for combination by the combining party, should be recorded as the initial amount of equity securities and bonds securities.
2015 Annual Report of Lu Thai Textile Co., Ltd. Besides the long-term equity investments formed by business combination, the other long-term equity investments shall be initially measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash payment paid by the Company, the fair value of equity securities issued by the Company, the agreed value of the investment contract or agreement, the fair value or original carrying amount of exchanged assets from non-monetary assets exchange transaction, the fair value of the long-term equity investments, etc. The expenses, taxes and other necessary expenditures directly related with gaining the long-term equity investments shall also be recorded into investment cost.
(2) Subsequent measurement and recognition of gains or losses
A long-term equity investment where the investing enterprise has joint control (except for which forms into common operators) or significant influence over the investors should be measured by equity method. Moreover, long-term equity investment adopting the cost method in the financial statements, and which the Company has control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be included at its initial investment cost and append as well as withdraw the cost of investing and adjusting the long-term equity investment. The return on investment at current period shall be recognized in accordance with the cash dividend or profit announced to distribute by the invested entity, except the announced but not distributed cash dividend or profit included in the actual payment or consideration upon gaining the investment.
② Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's attributable share of the fair value of the invested entity's identifiable net assets for investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the Company's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment; corresponding reduce the book value of the long-term equity investment according to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and theowners’ equity except for the profits distribution of the investees, should adjust the book value of the long-term equity investment as well as include in the capital reserve. The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting polices adopted by the investees is not accord with that of the Company, should be adjusted according to the accounting policies of the Company and the financial statement of the investees during the accounting period and according which to recognize the investment income as well as other comprehensive income. For the transaction happened between the Company and associated enterprises as well as joint ventures, if the assets launched or sold not
2015 Annual Report of Lu Thai Textile Co., Ltd. form into business, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Company according to the calculation of the enjoyed proportion, should recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction happened between the Company and the investees which belongs to the impairment losses of the transferred assets, should not be neutralized. The assets launched by the Company to the associated enterprises or the joint ventures if could form into business, the long-term equity investment without control right which acquired by the investors, should regard the fair value of the launched business as the initial investment cost the newly added long-term equity investment, and for the difference between the initial investment cost and the book value of the launched business, should be included into the current gains and losses with full amount. The Company shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero. However, if the Company has the obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into investment losses at current period. If the invested entity realizes any net profits later, the Company shall, after the amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume recognizing its attributable share of profits.
For the long-term equity investment held by the Company before the first execution of the new accounting criterion on 1 Jan. 2007 of the associated enterprises and joint ventures, if there is debit difference of the equity investment related to the investment, should be included in the current gains and losses according to the amount of the straight-line amortization during the original remained period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term equity investment increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if the capital reserves are not sufficient to offset, the retained profits shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be recorded intoowners’ equity; where the Company losses the controlling right by disposing part of long-term equity investment on such subsidiaries, it shall treated in accordance with the relevant accounting policies in Method on preparation of combined financial statements. For other ways on disposal of long-term equity investment, the balance between the book value of the disposed equity and its actual payment gained shall be recorded into current profits and losses. For the long-term equity investment measured by adopting equity method, if the remained equity after disposal still adopts the equity method for measurement, the other comprehensive income originally recorded intoowners’ equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees according to the corresponding proportion. Theowners’ equity recognized owning to the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution of the
2015 Annual Report of Lu Thai Textile Co., Ltd. investees, should be transferred into the current gains and losses according to the proportion. For the long-term equity investment which adopts the cost method of measurement, if the remained equity still adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for measurement or the recognition and measurement standards of financial instrument before acquiring the control of the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees and should be carried forward into the current gains and losses according to the proportion; the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Company lost the control of the investees by disposing part of the equity investment as well as the remained equity after disposal could execute joint control or significant influences on the investees, should change to measure by equity method when compiling the individual financial statement and should adjust the measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity after disposal could not execute joint control or significant influences on the investees, should change the accounting disposal according to the relevant regulations of the recognition and measurement standards of financial instrument, and its difference between the fair value and book value on the date lose the control right should be included in the current gains and losses. For the other comprehensive income recognized by adopting equity method for measurement or the recognition and measurement standards of financial instrument before the Company acquired the control of the investees, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the control of them, while the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion. Of which, for the disposed remained equity which adopted the equity method for measurement, the other comprehensive income and the otherowners’ equity should be carried forward according to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to the recognition and measurement standards of financial instrument, the other comprehensive income and the otherowners’ equity should be carried forward in full amount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed remained equity should change to calculate according to the recognition and measurement standards of financial instrument, and difference between the fair value and book value on the date lose the control right should be included in the current gains and losses. For the other comprehensive income recognized from the original equity investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the equity method for measurement, while for theowners’ equity recognized owning to the changes of the otherowner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should be transferred into the current investment income with full amount when terminate adopting the equity method.
2015 Annual Report of Lu Thai Textile Co., Ltd. The Company respectively disposes the equity investment of the subsidiaries through multiple transactions until lose the control right, if the above transactions belongs to the package deal, should execute the accounting disposal by regarding each transaction as a deal of disposing the equity investment of the subsidiaries until lose the control right, while the difference between each expenses of the disposal and the book value of the long-term equity investment in accord with the disposed equity before losing the control right, should firstly be recognized as other comprehensive income then be transferred into the current gains and losses of losing the control right along until the time when lose it.
15. Investment real estate
Measurement mode of the investment real estate
Inapplicable
16. Fixed assets
(1) Conditions for recognition
The term “fixed assets” refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for the sake of producing commodities, rendering labor service, renting or business management; and (b) their useful life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits probably flow in the Company and its cost could be reliable measured. The fixed assets should take the initial measurement according to the cost and at the same time consider the influences of the factors of the estimated discard expenses. (2) Depreciation methods
|||||
|-|-|-|-|
|Category of fixed assets|Method|Useful life|Salvage value|
|Housing and building|Average method ofuseful life|5-30 years|5%-10%|
|Machinery equipments|Average method ofuseful life|10-18 years|5%-10%|
|Transportation vehicle|Average method ofuseful life|5 years|5%-10%|
|Electronic equipments and others|Average method ofuseful life|5 years|5%-10%|

(3) Recognition basis, pricing and depreciation method of fixed assets by finance lease
The “finance lease” shall refer to a lease that has transferred in substance all the risks and rewards
related to the ownership of an asset. Its ownership may or may not eventually be transferred. The
2015 Annual Report of Lu Thai Textile Co., Ltd. fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over the shorter one of the lease term or its useful life.
17. Construction in progress
Construction in process is measured at actual cost. Actual cost comprises construction costs, borrowing costs that are eligible for capitalization before the fixed assets being ready for their intended us and other relevant costs. Construction in process is transferred to fixed assets when the assets are ready for their intended use.
See the details of the impairment test method of the impairment provision withdrawal method of the construction in progress to “Long-term assets impairment”.
18. Borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. When the borrowing costs can be directly attributable to the construction or production of assets eligible for capitalization, and the asset disbursements or the borrowing costs have already incurred, and the construction or production activities which are necessary to prepare the asset for its intended use or sale have already started, the capitalization of borrowing costs begins. When the asset eligible for capitalization under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased. Other borrowing costs shall be recognized as expenses when incurred.
The to-be-capitalized amount of interests shall be determined in light of the actual interests incurred of the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary investment; the enterprise shall calculate and determine the to-be-capitalized amount on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general borrowing.
During the period of capitalization, the exchange balance on foreign currency special borrowings shall be capitalized; the exchange balance on foreign currency general borrowings shall be recorded into current profits and losses.
The term “assets eligible for capitalization” refers to the fixed assets, investment real estate, inventories and other assets, of which the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended.
2015 Annual Report of Lu Thai Textile Co., Ltd. 19. Biological assets
(1) Consumptive biological assets
Consumptive biological assets refer to the biological assets held for sale or to be harvested as agricultural products in future, including crops, vegetables under growing, timber production forest and domestic animals for sale. The consumptive biological assets shall be measured based on cost. All costs for planting, creating, cultivating or raising of consumptive biological assets shall be the necessary expenses directly added to such assets that accrued before harvest, including any loan that satisfies capitalization conditions. Subsequent expenses for keeping and feeding the consumptive biological assets after the harvest should be recognized as the losses and gains of the current period. Upon harvest or sale, the cost of consumptive biological assets shall be based on its book value through weighted average.
On the date of Balance Sheet, the consumptive biological assets shall be measured with lower of cost and net realizable value, and the method for confirming the reserve for inventory price drop shall be adopted to confirm the reserve for price drop of consumptive biological assets. If the impacts of depreciation disappear, the depreciation amount shall be recovered, and the reserve for price drop originally accrued shall be reversed. Such amount reversed shall be recognized as loss and gain for the current period.
If consumptive biological assets change its usage to be as productive biological assets, the cost after such change shall be confirmed based on the book value when the usage is changed. If consumptive biological assets are changed as public biological assets, depreciation shall be taken into consideration pursuant to Corporate Accounting Rules No.8– Assets Depreciation. When depreciation occur, accrued the depreciation reserve first and then confirm based on the book value after such accrual.
(2) Productive biological assets
Productive biological assets refer to agricultural products produced, and biological assets held for labor provision or lease, including economic forest, firewood forest, productive animals and labor animals. The productive biological assets shall be measured based on cost. All costs for creating or fostering productive biological assets shall be the necessary expenses directly added to such assets that accrued before it reaches expected production purpose, including any loan that satisfies capitalization conditions.
The Company shall withdraw the depreciation of the productive biological assets by adopting the straight-line method since the second month of its useful life. Useful life, expected net salvage value and annual depreciation rate of each productive biological assets are as below:
||||
|-|-|-|
|Category|Useful life (Year)|Expected net salvage value(%)|
|Livestock|5|5%|

The Company shall review the service life, expected net residuals and depreciation method of the
productive biological assets at least by the end of the year. In case of any change, it shall be deemed
as accounting estimate change.
The difference between proceedings from disposal (sale, loss, death or damage) of the productive
2015 Annual Report of Lu Thai Textile Co., Ltd. biological assets deducted by book value and related tax shall be recognized as loss and gain for the current period.
The Company shall check on the date of Balance Sheet whether there is a depreciation sign for the productive biological assets. If yes, estimate the recoverable amount. Such recoverable amount shall be estimated based on single asset item. If it is difficult, the recoverable amount of the portfolio shall be confirmed based on the portfolio such assets belong to. If the recoverable amount of the assets is lower than book value, reserve for asset depreciation shall be accrued based on such difference, and recognized as loss and gain for the current period.
The above assets impairment losses once be recognized should not be reversed during the accounting periods afterwards.
If the productive biological assets changed the usage as the consumptive biological assets, the cost after the change should be recognized as the book value when changing the usage; of the productive biological assets changed the usage as non-profit living assets, should be recognized according to the book value after the withdrawal of the impairment provision in accord with the regulation of No. 8 of ASBE - Assets Impairment for considering whether there was impairment and should withdraw the impairment provision in ahead of it.
20. Oil and gas assets
21. Intangible assets
(1) Pricing method, useful life and impairment test
The term “intangible asset” refers to the identifiable non-monetary assets possessed or controlled by enterprises which have no physical shape.
The intangible assets shall be initially measured according to its cost. The costs related with the intangible assets, if the economic benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably, shall be recorded into the costs of intangible assets; otherwise, it shall be recorded into current profits and losses upon the occurrence.
The use right of land gained is usually measured as intangible assets. For the self-developed and constructed factories and other constructions, the related expenditures on use right of land and construction costs shall be respectively measured as intangible assets and fixed assets. For the purchased houses and buildings, the related payment shall be distributed into the payment for use right of land and the payment for buildings, if it is difficult to be distributed, the whole payment shall be treated as fixed assets.
For intangible assets with a finite service life, from the time when it is available for use, the cost after deducting the sum of the expected salvage value and the accumulated impairment provision shall be amortized by straight line method during the service life. While the intangible assets without certain service life shall not be amortized. The amortization period of each intangible asset was as follows:
2015 Annual Report of Lu Thai Textile Co., Ltd. Category Amortization method Amortization term (Year)
Straight-line method Stipulated the term according to the Land use right
regulations of the land transfer contract
Patent use right
Straight-line method
10
Software use right
Straight-line method
10
Brand use right
Straight-line method
10
At the end of period, the Company shall check the service life and amortization method of intangible assets with finite service life, if there is any change, it shall be regarded as a change of the accounting estimates. Besides, the Company shall check the service life of intangible assets without certain service life, if there is any evidence showing that the period of intangible assets to bring the economic benefits to the enterprise can be prospected, it shall be estimated the service life and amortized in accordance with the amortization policies for intangible assets with finite service life.
(2) Accounting polices of internal R& D expenses
The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures and development expenditures.
The research expenditures shall be recorded into the profit or loss for the current period.
The development expenditures shall be confirmed as intangible assets when they satisfy the following conditions simultaneously, and shall be recorded into profit or loss for the current period when theydon’t satisfy the following conditions.
① It is feasible technically to finish intangible assets for use or sale;
② It is intended to finish and use or sell the intangible assets;
③ The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that there is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be used internally;
④ It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources;
⑤ The development expenditures of the intangible assets can be reliably measured.
As for expenses thatcan’t be identified as research expenditures or development expenditures, the occurred R& D expenses shall be all included in current profits and losses.
22. Impairment of long-term assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited service life, investing real estate with cost model, long-term equity investment of
2015 Annual Report of Lu Thai Textile Co., Ltd. subsidiaries, cooperative enterprises and joint ventures, the Company should judge whether decrease in value exists on the date of balance sheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair value should be determined according to theBuyer’s price of the asset. If no sales agreement or asset active market exists, asset fair value could be acquired on the basis of best information available. Disposal expenses include legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Present value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be determined according to the belonging asset group. Asset group is the minimum asset combination producing cash flow independently.
In impairment test, book value of the business reputation in financial report should be shared to beneficial asset group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable amounts of shared business reputation asset group or asset group combination are lower than book value, it should determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the book value of business reputation of asset group or asset group combination, then deduct book value of all assets according to proportions of other book value of above assets in asset group or asset group combination except business reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
23. Amortization method of long-term deferred expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year (one year excluded) that have occurred but attributable to the current and future periods. The long-term deferred expenses mainly including the land contract fee. And the long-term deferred expense shall be amortized averagely within benefit period. The amortization term is the term stipulated by the land contracts and the land rental contracts.
24. Payroll
(1) Accounting treatment of short-term compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing fund, labor union expenditure and personnel education fund,
2015 Annual Report of Lu Thai Textile Co., Ltd. non-monetary benefits etc. The short-term compensation actually happened during the accounting period when the active staff offering the service for the Company should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting treatment of the welfare after departure
Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan mainly includes basic endowment insurance, unemployment insurance and annuity etc, and the corresponding payable and deposit amount should be included into the relevant assets cost or the current gains and losses when happen.
(3) Accounting treatment of the welfare after dimission
The Company relieves the labor relation with the employees before the due date of the labor contacts or puts forward the advice of providing the compensation for urging the employees volunteered to receive the downsizing and when the Company could not unilaterally withdraw the dismission welfare owning to the relieving plan of the labor relation or the downsizing advice, should confirm the liabilities of theemployees’ salary from the dismission welfare on the earlier day between the cost confirmed by the Company and the cost related to the reorganization of the payment of the dismission welfare and includes which in the current gains and losses. But as for the dismission welfare be estimated that could not be completed paid within 12 months after the end of the annual report period, should be handled according to the other long-termemployee’s salary.
The internal retire plan of the employees should be handled by adopting the same principles of the above dismission welfare. The Company includes the salary and the paid social insurance charges planed to pay by the personnel retreated inside during the period from the date when ceased the services to the normal retire date in the current gains and losses (dismission welfare) when met with the recognization conditions of the estimiated liabilities.
(4) Accounting treatment of the welfare of other long-term staffs
The other long-term welfare that the Company offers to the staffs, if met with the setting drawing plan, should be accounting disposed according to the setting drawing plan, while the rest should be disposed according to the setting revenue plan.
25. Estimated liabilities
26. Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment refers to the transaction in order to require the service offered by the employees and other parties that grants the equity instruments or responsible for the liabilities recognized on the basis of the equity instruments. Share-based payment divided into equity-settled share-based payment and cash-settled share-based payment.
2015 Annual Report of Lu Thai Textile Co., Ltd.①Equity-settled share-based payment
It is a share-based payment settled by equity used for exchange the service offered by the staffs and be measured by the fair value on the grant date of granting the equity instrument for the staffs. When the services are fully rendered during vesting period or specified performance targets are met, based on the best estimate of the number of the vesting equity instruments during vesting period and according to the straight-line method to calculate and to include into the relevant cost or expenses/when using the vesting power immediately after the granting, should include the relevant cost or expenses on the grant date and correspondingly increase the capital reserve.
On each balance sheet date within the vesting period, the Company makes the best estimate base on the subsequent information newly required such as the changes of the vestingstaffs’ number to modify the number of the estimated vesting equity instrument. The above influences of the estimation should be included into the current relevant cost or expenses and correspondingly adjust the capital surplus.
For equity-settled share-based payment made in return of other parties' services and the fair value of the other parties' services can be reliably measured, it will be measured based on the fair value of the other parties' services on the date of grant; if the fair value of the other parties' services cannot be reliably measured but the fair value of equity instruments can be reliably measured, it will be recognized in relevant costs or expenses and the capital reserves shall be adjusted accordingly at the fair value of such instruments on the date of the grant.
② Cash-settled share-based payment
The cash-settled share-based payment should be measured according to the fair value of the liabilities recognized based on the shares or other equity instrument undertaken by the Company. For the cash-settled share-based payment made in return for the rendering of employee services that may be exercised immediately after the grant, the fair value of the liability incurred by the Company shall, on the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully provided during the vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the Company.
On each balance sheet date and the settlement date before the settlement of the relevant liabilities, the Company should re-measure the fair value of the liabilities and its changes should be included in the current gains and losses.
(2) Relevant accounting treatment about revision and termination of share-based payment plans
As to the revision on the share-based payment plan made by the Company, if the fair value of the granted equity instrument increases after the revision, it shall recognize the increase of the service gained according to the increase of the fair value of equity instrument. The increase of the fair value of equity instrument refers to the balance between the fair value on the revising date of the equity instruments before and after the revision. If the total fair value of share-base payment decreases after the revision or adopting other ways against the staffs in the revision, it shall continue to conduct accounting treatment on the service gained as if the revision never happens, only if the Company p cancel partial or total granted equity instrument.
During the vesting period, if the Company cancels the granted equity instrument, the Company shall treat the cancel of granted equity instrument as accelerating the vesting, and includes the amount shall be recognized during the remained vesting period into current profit and loss, and also recognize the capital reserves. If staffs or other party can choose to meet the non-vesting conditions but not meets with them during the vesting period, which will be treated as the cancel of granted equity instrument by the Company.
2015 Annual Report of Lu Thai Textile Co., Ltd. 27. Other financial instruments such as the preference shares and perpetual capital securities
28. Revenue
(1) Selling products
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable way.
As for the revenues from the domestic sales products, the Company deliveries the products to the buyers according to the contracts agreement, and the revenues amount of the products sales had been confirmed with the goods payment had been withdrawn or had received the receipt voucher of which the relevant economic benefits probably flow into the enterprise as well as the relevant costs of the products could be reliable measured when being confirming as the revenues.
As for the revenues from the export sales products, the Company executes the customs declaration and the products departure according to the contracts agreement, and the Company had acquired the bill of lading with the revenues amount of the products sale had been confirmed and the goods payment had been withdrawn or had had received the receipt voucher of which the relevant economic benefits probably flow into the enterprise as well as the relevant costs of the products could be reliable measured when being confirming as the revenues.
(2) Providing labor services
If the Company can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method on the date of the balance sheet. The completed proportion of a transaction concerning the providing of labor services shall be decided by the proportion of the labor service already provided to the total labor service to provide.
The outcome of a transaction concerning the providing of labor services can be measured in a reliable way, means that the following conditions shall be met simultaneously:① The amount of revenue can be measured in a reliable way;② The relevant economic benefits are likely to flow into the enterprise;③ The schedule of completion under the transaction can be confirmed in a reliable way; and④ The costs incurred or to be incurred in the transaction can be measured in a reliable way.
If the outcome of a transaction concerning the providing of labor services can not be measured in a reliable way, the revenue from the providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred and expected to be compensated, and make the cost of labor services incurred as the current expenses. If it is predicted that the cost of labor services incurredcouldn’t be compensated, thus no revenue shall be recognized.
Where a contract or agreement signed between Company and other enterprises concerns selling goods and providing of labor services, if the part of sale of goods and the part of providing labor services can be distinguished from each other and can be measured respectively, the part of sale of goods and the part of providing labor services shall be treated respectively. If the part of selling goods and the part of providing labor services can not be distinguished from each other, or if the part of sale of goods and the part of providing labor services can be distinguished from each other but can not be measured respectively, both parts shall be conducted as selling
2015 Annual Report of Lu Thai Textile Co., Ltd. goods.
(3) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenue on accrual basis.
(4) Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which theCompany’s monetary fund is used by others and the agreed interest rate.
23. Government subsidies
(1) Judgment basis and accounting treatment of government subsidies related to assets
Government subsidies consist of the government subsidies pertinent to assets and government subsidies pertinent to income. The Company defines the acquisition of government subsidy of long term assets using in construction or formed in other ways as government subsidiary related to income. If the government document not clearly regulate the subsidy acquirees then adopt the following method to divide the government subsidy into government subsidy related to income and government subsidy related to assets; (1) If the government document clearly regulate the specific project, according to the budget project will form the spending amount of assets and the cost included of spending amount ratio to divide, and division ratio shall be reexamine in every balance sheet date, renew if necessary. (2) The usage in government documents is for general description only, for which do not identify a particular project, consider as government subsidy related to income.
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful lives of the relevant assets, and included in the current profits and losses. The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances as follows: those subsidies used for compensating the related future expenses or losses of the enterprise shall be recognized as deferred income and shall included in the current profits and losses during the period when the relevant expenses are recognized; or those subsidies used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits and losses.
Where it is necessary to refund any government subsidy which has been recognized, it shall be treated respectively in accordance with the circumstances as follows: if there is the deferred income concerned, the book balance of the deferred income shall be offset against, but the excessive part shall be included in the current profits and losses; or if there is no deferred income concerned to the government subsidy, it shall be directly included in the current profits and losses.
(2) Judgment basis and accounting treatment of government subsidies related to profits
Government subsidies consist of the government subsidies pertinent to assets and government subsidies pertinent to income and the rest should be recognized as the government subsidy related to the revenue. The Company defines the acquisition of government subsidy of long term assets using in construction or formed in other ways as government subsidiary related to income. If the government document not clearly regulate the subsidy acquirees then adopt the following method to divide the government subsidy into government subsidy related to income and government subsidy related to assets; (1) If the government document clearly regulate the specific project, according to the budget project will form the spending amount of assets and the cost included of spending amount ratio to divide, and division ratio shall be reexamine in every balance sheet date, renew if necessary. (2) The usage
in government documents is for general description only, for which do not identify a particular project, consider as
2015 Annual Report of Lu Thai Textile Co., Ltd. government subsidy related to income.
The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances as follows: those subsidies used for compensating the related future expenses or losses of the enterprise shall be recognized as deferred income and shall included in the current profits and losses during the period when the relevant expenses are recognized; or those subsidies used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits and losses.
30. Deferred income tax assets/deferred income tax liabilities
(1) Income tax of the current period
On the balance sheet date, for the current income tax liabilities (or assets) of the current period as well as the part formed during the previous period, should be measured by the income tax of the estimated payable (returnable) amount which be calculated according to the regulations of the tax law. The amount of the income tax payable which is based by the calculation of the current income tax expenses, are according to the result measured from the corresponding adjustment of the pre-tax accounting profit of 2014 which in accord to the relevant regulations of the tax law.
(2) Deferred income tax assets and deferred income tax liabilities
The difference between the book value of certain assets and liabilities and their tax assessment basis, as well as the temporary difference occurs from the difference between the book value of the items which not be recognized as assets and liabilities but could confirm their tax assessment basis according to the regulations of the tax law, the deferred income tax assets and the deferred income tax liabilities should be recognized by adopting liabilities law of the balance sheet.
No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill, the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary differences related to the investments of subsidiary companies, associated enterprises and joint enterprises, and the investing enterprise can control the time of the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the excepted future. Otherwise, the Group should recognize the deferred income tax liabilities arising form other taxable temporary difference.
No deferred taxable assets should be recognized for the deductible temporary difference of initial recognition of assets and liabilities arising from the transaction which is not business combination, the accounting profits will not be affected, nor will the taxable amount or deductible loss be affected at the time of transaction. Besides, no deferred taxable assets should be recognized for the deductible temporary difference related to the investments of the subsidiary companies, associated enterprises and joint enterprises, which are not likely to be reversed in the expected future or is not likely to acquire any amount of taxable income tax that may be used for making up such deductible temporary differences. Otherwise, the Company shall recognize the deferred income tax assets arising from a deductible temporary difference basing on the extent of the amount of the taxable income that is likely to be acquired to make up such deductible temporary differences
For any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax asset shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
2015 Annual Report of Lu Thai Textile Co., Ltd. On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtain sufficient taxable income to offset against the benefit of the deferred income tax asset, the book value of the deferred income tax assets shall be written down. Any such write-down should be subsequently reversed where it becomes probable that sufficient taxable income will be available.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.
The rest current income tax and the deferred income tax expenses or revenue should be included into current gains and losses except for the current income tax and the deferred income tax related to the transaction and events that be confirmed as other comprehensive income or be directly included in theshareholders’ equity which should be included in other comprehensive income orshareholders’ equity as well as the book value for adjusting the goodwill of the deferred income tax occurs from the business combination.
(4) Offset of income tax
The current income tax assets and liabilities of the Company should be listed by the written-off net amount which intend to executes the net amount settlement as well as the assets acquiring and liabilities liquidation at the same time while owns the legal rights of settling the net amount.
The deferred income tax assets and liabilities of the Company should be listed as written-off net amount when having the legal rights of settling the current income tax assets and liabilities by net amount and the deferred income tax and liabilities is relevant to the income tax which be collected from the same taxpaying bodies by the same tax collection and administration department or is relevant to the different taxpaying bodies but during each period which there is significant reverse of the deferred income assets and liabilities in the future and among which the involved taxpaying bodies intend to settle the current income tax and liabilities by net amount or are at the same time acquire the asset as well as liquidate the liabilities.
31. Lease
(1) Accounting treatment of operating lease
(1) Business of operating leases recorded by the Group as the lessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset costs or the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs shall be recognized as the profits and losses of the current period. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
(2) Business of operating leases recorded by the Group as the lessor
The rent incomes from operating leases shall be recognized as the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs of great amount shall be capitalized when incurred, and be recorded into current profits and losses
2015 Annual Report of Lu Thai Textile Co., Ltd. in accordance with the same basis for recognition of rent incomes over the whole lease term. The initial direct costs of small amount shall be recorded into current profits and losses when incurred. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
(2) Accounting treatments of financial lease
(1) Business of finance leases recorded by the Company as the lessee
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. Besides, the initial direct costs directly attributable to the leased item incurred during the process of lease negotiating and signing the leasing agreement shall be recorded in the asset value of the current period. The balance through deducting unrecognized financing charges from the minimum lease payments shall be respectively stated in long-term liabilities and long-term liabilities due within 1 year.
Unrecognized financing charges shall be adopted by the effective interest rate method in the lease term, so as to calculate and recognize current financing charges. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
(2) Business of finance leases recorded by the Company as the lessor
On the beginning date of the lease term, the Company shall recognize the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value in an account of the financing lease values receivable, and record the unguaranteed residual value at the same time. The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual value and the sum of their present values shall be recognized as unrealized financing income. The balance through deducting unrealized financing incomes from the finance lease accounts receivable shall be respectively stated in long-term claims and long-term claims due within 1 year.
Unrecognized financing incomes shall be adopted by the effective interest rate method in the lease term, so as to calculate and recognize current financing revenues. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
32. Significant accounting judgments and estimates
Due to the internal uncertainty of operating activities, the Company needs to make judgments, estimates and assumptions for carrying amounts of statement items thatcan’t be measured accurately during the process of applying accounting policies. Such judgments, estimates and assumptions are made on the basis of the past experience ofCompany’s management staffs and on the consideration of other relevant factors. Such judgments, estimates and assumptions have effect on reporting amount of incomes, expense, assets and liabilities, as well as disclosure of contingent liabilities on the balance sheet date. However, the uncertainty of such estimates may results in major adjustments of carrying amounts of assets or liabilities that will be influenced in future.
2015 Annual Report of Lu Thai Textile Co., Ltd. The Company shall have a check on the aforesaid judgments, estimates and assumptions at fixed intervals on the basis of sustainable operation. As for the change in accounting estimates that only effects on the current period of the change, the affected amount thereof shall be recognized at current period of the change. As for accounting estimates that effects on both the current period of the change and future periods, the affected amount thereof shall be recognized at current period of the change and future periods.
On balance sheet date, major fields requiring judgments, estimates and assumptions on amounts of financial statement items by the Company are as follows:
(1) Classification of leases
In line with rules in Accounting Standards for Enterprises No. 21– Leases, the Company classifies leases into operating leases and finance leases. Upon the classification, the management staffs need to make analysis and judgments on whether to essentially transfer all risks and remuneration relating to the ownership of leased-out assets to the lessee, or whether the Company has essentially undertaken all risks and remuneration relating to the ownership of leased-in assets.
(2) Withdrawal of bad debt provisions
The Company shall, in accordance with accounting policies of receivables, calculate bad debt provisions by adopting allowance method. Impairment of accounts receivable is based on the assessment of the recovery of accounts receivable. Identification of impairment of accounts receivable requires judgments and estimates by management staffs. The difference between actual outcomes and originally estimated outcomes, which will influence the carrying amount of accounts receivable and bad debt provisions thereof in the estimated period of the change, shall be withdrawn or reversed.
(3) Inventory depreciation reserves
The Company shall calculate whichever is lower between the cost and realizable net value in light of inventory accounting policies. As for inventories of which the cost is higher than the realizable net value and inventories which are obsolete and unsalable inventory depreciation reserves shall be withdrawn. Impairment of inventories to realizable net value is based on the assessment of the marketing of inventories and realizable net value thereof. Identification of inventory impairment requires well-established evidences by management staffs, as well as judgments and estimates based on consideration of the purpose of holding inventories and other factors such as events occurring after the date of balance sheet. The difference between actual outcomes and originally estimated outcomes, which will influence the carrying amount of inventories and inventory depreciation reserves in the estimated period of the change, shall be withdrawn or reversed.
(4) Fair values of financial instruments
As for financial instruments not existing in active trading market, the Company shall determine their fair values by all kinds of assessment methods, which include model analysis of discounted cash flow and etc. During the assessment, the Company needs to assess for respects such as future cash flows, credit risks, market volatility, correlation, and choose appropriate discount rate. Such related assumptions have uncertainty, of which the change will effect on fair values of financial instruments.
(5) Impairment of financial assets available for sale
To a large extent, whether the impairment of financial assets available for sale is recognized or not relies on the judgments and assumptions of the management staffs. In that way, the Company shall
2015 Annual Report of Lu Thai Textile Co., Ltd. be certain about whether to recognize impairment losses of financial assets available for sale in the profit statement. During the process of making judgments and assumptions, the Company needs to evaluate how much the fair value of such investment is less than its cost, how long such investment will last, and the financial condition and short-term business outlook of the invested parties, which include industry status, technology transform, credit rating, default rate and risks from the opposite parties.
(6) Impairment provisions of non-financial non-current assets
The Company shall judge whether there is sign of impairment of non-current assets other than financial assets on balance sheet date. Intangible assets with uncertain service lives, besides being conducted with annual impairment test every year, have to accept impairment tests when there is sign of impairment. Other non-current assets except for financial assets have to accept impairment tests when there is sign indicating the carrying amount thereof is unrecoverable.
When the carrying amounts of the asset or group assets are higher than the recoverable amounts, namely whichever is higher between the net amount through deducting disposal charges from the fair value and the present value of the estimated future cash flow, impairment occurs.
The net amount of the fair value of an asset minus the disposal expenses shall be determined in light of the amount of the basis of the price as stipulated in the sales agreement or the observable market price in the fair transaction minus the incremental cost directly subject to the disposal of the asset. When estimating present value of future cash flows, it is necessary to make significant judgments on characters of the asset or asset group, such as output, sales price, related operating costs, and discount used to calculate the present value. When estimating recoverable amount, the Company shall adopt all relevant materials that can be required, including estimates relating to output, sales price and relevant operating costs judged by rational and supportable assumptions.
The Company tests whether there is impairment of good will at least for every year, which requires itself to estimate the present value of the future cash flow of group assets or combination of group assets. When estimating the present value of the future cash flow, the Company needs to estimate the cash flow arising from future group assets or combination of group assets, and at the same time choose appropriate discount rate to determine the present value of the future cash flow.
(7) Depreciation and amortization
Upon consideration on the salvage value of investment real estates, fixed assets and intangible assets, the Company shall withdraw depreciation and amortization by straight-line method over their service lives. The Company checks on service lives at fixed intervals, so as to determine the amounts of depreciation expenses and amortization expenses at each period. Service lives are confirmed in accordance with the past experience on similar assets of the Company, along with renewed technology of expectation. If any significant change occurred to previous estimated, depreciation expenses and amortization expenses will be adjusted in future period.
(8) Development expenditure
When recognizing the capitalized amount, the management layer of the Company needs to make suppose about the estimated future cash flow, the appropriate discounts rate and the estimated benefit period related to the assets.
(9) Deferred income tax assets
In a limit providing large possibility of offset losses from sufficient taxable profits, the Group shall recognize deferred income tax assets in line with all unused tax losses, which requires management
2015 Annual Report of Lu Thai Textile Co., Ltd. staffs of the Group to estimate the time when future taxable profits occurs and the amount thereof by applying plenty of judgments and combining tax planning strategies, so as to determine the amount of the recognizable deferred income tax assets.
(10) Income taxes
There’s certain uncertainty of disposal and calculation of taxes of partial transactions in normal operating activities. It is uncertain whether some pre-taxed items can set aside the approvals by tax authorities or not. If there are differences between the ultimate recognition outcomes and the originally estimated amounts of such tax issues, then such differences shall effect on the current income tax and deferred income tax during the ultimate recognition period.
33. Changes in main accounting policies and estimates
(1) Change of accounting policies
□ Applicable√ Inapplicable
(2) Change of main accounting estimates
□ Applicable√ Inapplicable
34. Other
VI. Taxation
1. Main taxes and tax rate
||||
|-|-|-|
|Category of taxes|Tax basis|Tax rate|
||Calculated the output tax at 17%, 13%, 6%, and 0% of taxable||
|VAT|income and paid the VAT by the amount after deducting the|17%, 13%, 6%, 3%, 0%|
||deductible withholding VAT at current period.||
|Business tax|Paid by 3%, 5% of taxable business income|3%, 5%|
|Urban maintenance|||
||Paid at 7%, 5%, 1% of the circulating tax actually paid|7%, 5%, 1%|
|and construction tax|||
|Enterprise income tax|Paid at 15%, 16.5%, 25% of taxable income respectively|0%, 9%, 15%, 16.5%, 25%|

Notes to the disclosure of taxpaying bodies in different corporate tax rate
|||
|-|-|
|Name of taxpaying bodies|Rate of income tax|
|The Company|15%|
|Lufeng Weaving & Dyeing Co., Ltd. (hereinafter refer to as||
||15%|
|“Lufeng Weaving & Dyeing”)||
|Lu Thai (Hong Kong) Textile Co., Ltd. (hereinafter refer to as||
||16.50%|
|“Lu Thai Hong Kong”)||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
|Xinjiang Lu Thai Harvest Cotton Co., Ltd. (“Xinjiang Lu Thai”)|25%|
|Zibo Luqun Textile Co., Ltd. (hereinafter refer to as “Luqun||
||25%|
|Textile”)||
|Zibo Xinsheng Power Co., Ltd. hereinafter refer to as “Xinsheng||
||25%|
|Power”)||
|Zibo Helijie Energy Saving Technology & Services Co., Ltd.||
||25%|
|(hereinafter referred to as “Helijie”)||
|Beijing Lufeng Sunshine Garments Co., Ltd. (hereinafter||
||25%|
|referred to as “Lufeng Sunshine”)||
|Beijing Innovative Garment Co., Ltd. (hereinafter referred to as||
||25%|
|“Beijing Innovative”||
|Shanghai Lu Thai Textile & Garments Co., Ltd. (hereinafter||
||25%|
|referred to as “Shanghai Lu Thai”)||
|Beijing Lu Thai Youxian Electronic Commerce Co., Ltd.||
||25%|
|(hereinafter referred to as “Beijing Youxian”)||
|Xinjiang Lu Thai Textile Co., Ltd. (“Xinjiang Lu Thai Textile”)|9%|
|Lu Thai (Cambodia) Textile Co., Ltd. (hereinafter referred to as||
||0%|
|“Lu Thai Cambodia”)||
|Lu Thai (Burma) Textile Co., Ltd. (hereinafter referred to as “Lu||
||0%|
|Thai Burma”)||
|Lu Thai (Vietnam) Textile Co., Ltd. (hereinafter referred to as||
||0%|
|“Lu Thai Vietnam”)||

2. Tax preference
The Company, in accordance with the Notice on Passing the Re-examination of New High-tech Enterprise for 504 Companies Including Jinan Shengquan Group Co., Ltd. (Lu-Ke-Gao-Zi[2012] No. 19) from Department of Science& Technology of Shandong Province, Finance Bureau of Shandong Province, National Taxation Bureau of Shandong and Local Taxation Bureau of Shandong Province, was recognized as a New High-tech Enterprise and obtained the Certificate of New High-tech Enterprise on 31 Oct. 2011. The Company shall, in line with the Article 28 of Enterprise Income Tax Law of thePeople’s Republic of China and Notice of the State Administration of Taxation on the Issues concerning the Administration of Enterprise Income Tax Deduction and Exemption (GSF[2008] No. 111 document), enjoy a 15-percent rate for enterprise income tax.
TheCompany’s controlledsubsidiary— Lufeng Weaving& Dyeing Co., Ltd., in accordance with the Notice on Confirmation of New High-tech Enterprise for 430 Companies Including Jinan FeshenXinng’an Technologies Co., Ltd. (Lu-Ke-Gao-Zi[2012] No. 38) from Department of
Science& Technology of Shandong Province, Finance Bureau of Shandong Province, National
Taxation Bureau of Shandong and Local Taxation Bureau of Shandong Province, was recognized as
a New High-tech Enterprise and obtained the Certificate of New High-tech Enterprise on 30 Nov.
2015 Annual Report of Lu Thai Textile Co., Ltd. 2011.. The above subsidiary shall, in line with the Article 28 of Enterprise Income Tax Law of thePeople’s Republic of China and Notice of the State Administration of Taxation on the Issues concerning the Administration of Enterprise Income Tax Deduction and Exemption (GSF[2008] No. 111 document), enjoy a 15-percent rate for enterprise income tax.
Lu Thai (Hong Kong) Textile Co., Ltd. (hereinafter refers as Lu Thai (Hong Kong) Textile), the wholly-owned subsidiary company of the Company, was incorporated in Hong Kong SAR, whose profit tax shall be paid at tax rate of16.5%.
According to the “Announcement of the State Administration of Taxation on Issues of Enterprise Income Tax Concerning In-depth Implementation of the Western Development Strategy” (SAT[2012] No. 12), as well as the “Circular of Xinjiang Uygur Autonomous Region on Tax Policies Concerning Acceleration of the Development of the Textile Industry” (XZF[2010] No. 99), Xinjiang Lu Thai Textile Co., Ltd. (“Xinjiang Lu Thai Textile”), a wholly-funded subsidiary of theCompany’s controlled subsidiary Xinjiang Lu Thai Fengshou Cotton Co., Ltd. (“Xinjiang Lu Thai”), enjoys a preferential enterprise income tax rate of15% as an enterprise under the Western Development Strategy. And the local enjoyable tax is exempted for five years, i.e. a preferential enterprise income tax rate of9% for the five years.
The wholly own subsidiary Lu Thai Cambodia, according to the Lu Thai Cambodia Profits tax free approval issued by Investment Committee of Cambodia, Lu Thai Cambodia enjoys tax preference of tax free on corporate income tax of 3 (3 years start-up period)+ 3 (3 years taxholiday)+1 (1 year grace period). If profit during the 3 year start-up period then turn into 3 years tax holiday, after grace period, enterprise income tax rate was of20%.
The wholly own subsidiary Lu Thai Burma, according to theBurma’s Special Economic Zone Law issued by Pyidaungsu Hluttaw, Lu Thai Burma enjoys tax preference on corporate income tax of 7 (7 years tax holiday)+ 5 (5 years tax revenues drop by half)+ 5 (re-invest the profits within 1 year and continues to enjoy the half tax revenues 5 years afterwards). After grace period, enterprise income tax rate was of25%.
The wholly own subsidiary Lu Thai Vietnam of the wholly own subsidiary Lu Thai Hong Kong, the investment license issued by the Vietnam Fudong Industrial Park Management Committee, Lu Thai Vietnam enjoys tax preference on corporate income tax of 3 (3 years start-up period)+ 2 (2 years tax holiday)+ 4 half (4 years50%-reductions period) and if there are profits within the 3 years start-up period should transfer which in the 2 years tax holiday. After grace period, enterprise income tax rate was of25%.
3. Other
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Cash on hand|2,111,348.02|1,190,565.56|
|Bank deposits|742,998,281.72|631,971,943.96|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Other monetary funds|50,391,566.33|33,131,288.78|
|Total|795,501,196.07|666,293,798.30|
|Of which total amount of deposited|||
||81,371,297.43|22,970,300.95|
|abroad|||

Other notes:
On 31 Dec. 2015, the monetary capital with restricted ownership of the Company was of RMB29,805,722.42 (31 Dec. 2014: RMB16,900,000.00), which was the the fixed deposit receipt of RMB29,754,422.42 in order to pledge and obtain short term loan by theCompany’s subsidiary Lufeng Weaving& Dyeing and the expenses of the L/G margin of RMB51,300.00.
2. Financial assets measured by fair value and the changes be included in the current gains and losses Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Tradable financial assets|71,696,678.70||
|Derivative financial assets|71,696,678.70||
|Total|71,696,678.70||

Other notes:
3. Derivative financial assets
□ Applicable√ Inapplicable
4. Notes receivable
(1) Notes receivable listed by category
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|31,611,924.20|21,795,315.09|
|Letter of credit|101,533,594.19|92,009,162.34|
|Total|133,145,518.39|113,804,477.43|

 (2) Notes receivable pledged by the Company at the period-end
Unit: RMB Yuan
|||
|-|-|
|Item|Amount at the period-end|

2015 Annual Report of Lu Thai Textile Co., Ltd. (3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end
Unit: RMB Yuan
||||
|-|-|-|
||Amount of recognition termination at the|Amount of not terminated recognition at|
|Item|||
||period-end|the period-end|
|Bank acceptance bill|108,048,795.26||
|Total|108,048,795.26||

(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or agreement
Unit: RMB Yuan
|||
|-|-|
||Amount of the notes transferred to accounts receivable at theperiod-end|
|Item||

Other notes
5. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Accounts receivable|||||||||||
|withdrawn bad debt|||||||||||
||276,788,||13,940,1||262,848,0|223,311||11,340,99||211,970,55|
|provision according||100.00%||5.04%|||99.42%||5.08%||
||146.79||04.17||42.62|,549.51||5.41||4.10|
|to credit risks|||||||||||
|characteristics|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for||||||1,313,7||1,313,784|||
||||||||0.58%||100.00%||
|which bad debt||||||84.00||.00|||
|provision separately|||||||||||
|accrued|||||||||||
||276,788,||13,940,1||262,848,042.62|224,625||12,654,77||211,970,554.10|
|Total||100.00%||5.04%|||100.00%||5.63%||
||146.79||04.17|||,333.51||9.41|||

2015 Annual Report of Lu Thai Textile Co., Ltd. Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□ Inapplicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Accounts receivable|Bad debt provision|Withdrawal proportion|
|Subitem within 1 year||||
|Within 1 year|275,553,534.73|13,777,676.74|5.00%|
|Subtotal within 1 year|275,553,534.73|13,777,676.74|5.00%|
|1 to 2 years|844,949.97|84,495.01|10.00%|
|2 to 3 years|389,662.09|77,932.42|20.00%|
|Total|276,788,146.79|13,940,104.17|5.04%|

 Notes of the basis of recognizing the group:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting other methods to accrue bad debt provision:
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB2,753,411.98; the amount of the reversed or collected part during the reporting period was of RMB0.00.
Of which the significant amount of the reversed or collected part during the reporting period:
Unit: RMB Yuan
||||
|-|-|-|
|Name of the units|Reversed or collected amount|Method|

(3) The actual write-off accounts receivable
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|
|Actual write-off accounts receivable|1,468,087.22|

 Of which the significant actual write-off accounts receivable:
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the units|Nature|Amount|Reason|Process|from the related|
||||||transactions|

Notes of the write-off the accounts receivable:
2015 Annual Report of Lu Thai Textile Co., Ltd. (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party
The total amount of theCompany’s top 5 of the closing balance of the accounts receivable colleted according to the arrears party wasRMB104,309,822.47,37.69% of the total balance of account receivable at period-end. The relevant total balance of bad debt provision was RMB5,215,491.12.
(5) Account receivable which terminate the recognition owning to the transfer of the financial assets (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable
Other notes:
6. Prepayment
(1) List by aging analysis:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Aging|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|194,103,626.51|98.63%|172,016,638.95|98.37%|
|1 to 2 years|1,693,651.78|0.86%|1,937,764.69|1.11%|
|2 to 3 years|339,302.71|0.17%|1,752.14|0.00%|
|Over 3 years|673,323.13|0.34%|909,777.10|0.52%|
|Total|196,809,904.13|--|174,865,932.88|--|

Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
The total amount of top 5 of the closing balance of the prepayment collected according to the prepayment target was RMB135,818,391.39,69.01% of total balance of prepayment at period-end.
Other notes:
7. Interest receivable
(1) Category of interest receivable
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Fixed time deposit|653,075.08||
|Total|653,075.08||

(2) Significant overdue interest
||||||
|-|-|-|-|-|
|||||Whether occurred|
|Borrower|Closing balance|Overdue time|Reason|impairment and its|
|||||judgment basis|

 Other notes:
8. Dividend receivable
(1) Dividend receivable
Unit: RMB Yuan
||||
|-|-|-|
|Item (or investees)|Closing balance|Opening balance|

(2) Significant dividend receivable aged over 1 year
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Whether occurred|
|Item (or investees)|Closing balance|Aging|Reason|impairment and its|
|||||judgment basis|

 Other notes:
9. Other accounts receivable
(1) Other accounts receivable disclosed by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Other accounts|||||||||||
|receivable withdrawn|80,678,2||9,856,83||70,821,40|71,349,||7,971,030||63,378,909.|
|||100.00%||12.22%|||100.00%||11.17%||
|bad debt provision|38.51||2.23||6.28|940.05||.77||28|
|according to credit|||||||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|risks characteristics|||||||||||
||80,678,2||9,856,83||70,821,406.28|71,349,||7,971,030||63,378,909.28|
|Total||100.00%||12.22%|||100.00%||11.17%||
||38.51||2.23|||940.05||.77|||

 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□ Inapplicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subitem within 1 year||||
|Within 1 year|46,747,015.73|2,337,350.79|5.00%|
|Subtotal within 1 year|46,747,015.73|2,337,350.79|5.00%|
|1 to 2 years|5,920,031.84|592,003.18|10.00%|
|2 to 3 years|14,758,790.28|2,951,758.06|20.00%|
|Over 3 years|13,252,400.66|3,975,720.20|30.00%|
|Total|80,678,238.51|9,856,832.23|12.22%|

 Notes of the basis of recognizing the group:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
□ Applicable√ Inapplicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB2,074,234.32; the amount of the reversed or collected part during the reporting period was of RMB13,652.58.
Of which the significant amount of the reversed or collected part during the reporting period:
Unit: RMB Yuan
||||
|-|-|-|
|Name of units|Reversed or collected amount|Method|

(3) The actual write-off other accounts receivable
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|
|Actual write-off other accounts receivable|202,085.44|

Of which the significant write-off other accounts receivable:
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of units|Nature|Amount|Reason|Process|from the related|
||||||transactions|

 Notes of write-off other accounts receivable:
(4) Other accounts receivable classified by the nature of accounts
Unit: RMB Yuan
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Export taxes refund|23,876,307.85|11,213,575.08|
|Advance payment|33,467,444.93|37,058,192.64|
|Pledge and guarantee|6,956,093.54|8,062,219.86|
|Lending and deposit|3,811,593.38|4,777,623.60|
|Other|12,566,798.81|10,238,328.87|
|Total|80,678,238.51|71,349,940.05|

 (5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||||Proportion of the||
|||||total year end|Closing balance of|
|Name of units|Nature|Closing balance|Aging|balance of the|bad debt provision|
|||||accounts receivable||
|||||(%)||
|Export taxes refund||||||
||Export taxes refund|21,210,622.25|Within 1 year|26.29%|1,060,531.11|
|receivable||||||
|Advance money||||||
||||Within 1 year, 1-2|||
|receivable of the|Advance money|16,274,560.21||20.17%|2,665,280.34|
||||years, 2-3 years|||
|fundraising houses||||||
|Advance money||||||
||Advance money for|||||
|receivable for the||||||
||the social security|||||
|social security||||||
||undertake by the|6,158,992.57|Within 1 year|7.63%|307,949.63|
|undertake by the||||||
||individual of the|||||
|individual of the||||||
||employee|||||
|employee||||||
|Deposits for wages|Deposits for wages|||||
|paid to migrant|paid to migrant|||||
|||2,955,620.10|Over 3 years|3.66%|886,686.03|
|workers of Zichuan|workers of|||||
|District, Zibo|infrastructure works|||||
|Finance Bureau of|Export tax refunds of|2,665,685.60|Over 3 years|3.30%|799,705.68|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Zichuan District,|the local government|||||
|Zibo||||||
|Total|--|49,265,480.73|--|61.06%|5,720,152.79|

 (6) Accounts receivable involved with government subsidies
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Project of government|||Estimated received time,|
|Name of units||Closing balance|Closing age||
||subsidies|||amount and basis|

 (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable
Other notes:
10. Inventory
(1) Category of inventory
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Raw materials|608,670,473.36|1,635,229.99|607,035,243.37|661,246,109.89|1,635,229.99|659,610,879.90|
|Products in|||||||
||445,688,953.21||445,688,953.21|478,624,419.09||478,624,419.09|
|process|||||||
|Inventory goods|714,280,833.84|43,608,998.71|670,671,835.13|636,626,434.14|40,267,108.49|596,359,325.65|
|Consumptive|||||||
||869,404.33|392,309.29|477,095.04||||
|biological assets|||||||
|Assigned|||||||
|processing|20,090,846.49||20,090,846.49|17,975,757.57||17,975,757.57|
|products|||||||
|Total|1,789,600,511.23|45,636,537.99|1,743,963,973.24|1,794,472,720.69|41,902,338.48|1,752,570,382.21|

 (2) Falling price reserves of inventory
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increased amount|Decreased amount|Closing balance|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|||||Reverse or|||
|||Withdrawal|Other||Other||
|||||write-off|||
|Raw materials|1,635,229.99|||||1,635,229.99|
|Inventory goods|40,267,108.49|19,510,485.31||16,168,595.09||43,608,998.71|
|Consumptive||||||392,309.29|
|||392,309.29|||||
|biological assets|||||||
|Total|41,902,338.48|19,902,794.60||16,168,595.09||45,636,537.99|

||||
|-|-|-|
|Item|Specific basis of withdrawal offalling price reserves ofinventory|Reasons for reversal|
|Raw materials|The lower one between cost ofeach item of inventory and itsrealizable net value.||
|Inventory goods|The lower one between cost ofeach item of inventory and itsrealizable net value.||
|Consumptive biologicalassets|The lower one between cost ofeach item of inventory and itsrealizable net value.||

Notes: due to the quality problem in the garment accessories of partial raw materials, raw yarn and dyed yarn of finished goods and long age of partial shirts and fabric at the year-end as well as the falling market price of the consumptive biological assets-Hu-sheep, the costs of inventories became higher than the realizable net value, and the Company withdrew the provision for falling price of inventories according to their balance.
(3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
(4) Completed unsettled assets formed from the construction contact at the period-end
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Other notes:
11. Assets divided as held-to-sold
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Estimated disposal||
|Item|Closing book value|Fair value||Estimated disposal time|
||||expense||

Other notes:
2015 Annual Report of Lu Thai Textile Co., Ltd. 12. Non-current assets due within 1 year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other notes:
13. Other current assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Prepaid income tax to be deducted|3,108,886.97|3,658,894.10|
|VAT input tax to be deducted|16,640,924.10|1,508,430.88|
|Buy-back amount of B Share|20,634,142.65||
|Payment of the shares|17,007,362.62||
|Total|57,391,316.34|5,167,324.98|

 Other notes:
14. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Available-for-sale equity|||||||
||67,442,600.00||67,442,600.00|67,442,600.00||67,442,600.00|
|instruments|||||||
|Measured by cost|67,442,600.00||67,442,600.00|67,442,600.00||67,442,600.00|
|Total|67,442,600.00||67,442,600.00|67,442,600.00||67,442,600.00|

 (2) Available-for-sale financial assets measured by fair value at the period-end
Unit: RMB Yuan
|||||
|-|-|-|-|
|Category|Available-for-sale equity|Available-for-sale debt||
||||Total|
||instruments|instruments||

(3) Available-for-sale financial assets measured by cost at the period-end
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Investee|Book balance|Impairment provision|Shareholdi|Cash|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||||ng|bonus of|
||Period-beg||||Period-beg||||proportion|the|
|||Increase|Decrease|Period-end||Increase|Decrease|Period-end|||
||in||||in||||among the|reporting|
||||||||||investees|period|
|Zibo|||||||||||
|Chengshu|||||||||||
|n Heating|||||||||||
|Co., Ltd.|||||||||||
|(hereinafte|||||||||||
||160,000.00|||160,000.00|||||2.00%||
|r refer to|||||||||||
|as|||||||||||
|“Chengshu|||||||||||
|n|||||||||||
|Heating” )|||||||||||
|Yantai|||||||||||
|Rongchan|||||||||||
|g|||||||||||
|Pharmacy|||||||||||
|Co., Ltd.|||||||||||
|(hereinafte|55,282,600|||55,282,600|||||||
||||||||||5.56%||
|r refer to|.00|||.00|||||||
|as|||||||||||
|“Rongcha|||||||||||
|ng|||||||||||
|Pharmacy”|||||||||||
|)|||||||||||
|Gaoqing|||||||||||
|Hongqiao|||||||||||
||12,000,000|||12,000,000|||||||
|Power Co.,|||||||||20.68%||
|Ltd.|.00|||.00|||||||
|(Hongqiao|||||||||||
|Power)|||||||||||
||67,442,600|||67,442,600|||||||
|Total|||||||||--||
||.00|||.00|||||||

(4) Changes of the impairment of the available-for-sale financial assets during the reporting period
Unit: RMB Yuan
|||||
|-|-|-|-|
||Available-for-sale equity|Available-for-sale debt||
|Category|||Total|
||instruments|instruments||

(5) Relevant notes of the fair value of the available-for-sale equity instruments which seriously fell or
temporarily fell but not withdrawn the impairment provision
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|Item of|||||||
||||Falling range of||Withdrawn|Reason of not|
|available-for-sale||Fair value of the||Continued falling|||
||Investment cost||the fair value||amount of|withdrawn the|
|equity||period-end||time (month)|||
||||against the cost||impairment|impairment|
|instruments|||||||

Other notes
15. Investment held-to-maturity
(1) List of investment held-to-maturity
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||

(2) Significant held-to-maturity investment at the period-end
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Bond item|Par value|Nominal interest rate|Actual interest rate|Due date|

 (3) Re-classified held-to-maturity investment during the reporting period
Other notes
16. Long-term accounts receivable
(1) List of long-term accounts receivable
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||Closing balance|||Opening balance||||
||||||||Discount rate|
|Item||Bad debt|||Bad debt|||
||Book balance||Book value|Book balance||Book value|range|
|||provision|||provision|||
|Financing lease||||||||
||4,980,998.00||4,980,998.00|6,980,998.00||6,980,998.00|10.54%|
|receivables||||||||
|Of which:||||||||
|unrealized|332,959.49||332,959.49|901,978.43||901,978.43||
|financing income||||||||
|Total|4,980,998.00||4,980,998.00|6,980,998.00||6,980,998.00|--|

2015 Annual Report of Lu Thai Textile Co., Ltd. (2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets
(3) The amount of the assets and liabilities formed by the transfer and the continues involvement of long-term accounts receivable
Other notes
17. Long-term equity investment
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease||||||||||
||||||||||||Closing|
|||||Gains and|Adjustme|||||||
||||||||Cash|Withdraw|||balance|
|||Additiona||losses|nt of|||||||
||Opening||Reduced|||Changes|bonus or|al of||Closing|of|
|Investees||||||||||||
|||l||recognize|other|||||||
||balance||investmen|||of other|profits|impairme|Other|balance|impairme|
|||investmen||d under|comprehe|||||||
||||t|||equity|announce|nt|||nt|
|||t||the equity|nsive|||||||
||||||||d to issue|provision|||provision|
|||||method|income|||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||

Other notes
18. Investment property
(1) Investment property adopted the cost measurement mode
□ Applicable√ Inapplicable
(2) Investment property adopted fair value measurement mode
□ Applicable√ Inapplicable
(3) Details of investment property failed to accomplish certification of property
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|

Other notes
19. Fixed assets
(1) List of fixed assets
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|Electronic and||
|Item|||||Total|
||buildings|equipment|equipment|other equipment||
|I. Original book||||||
|value||||||
|1. Opening||||||
||2,550,640,277.33|5,419,397,227.53|68,406,645.05|103,129,923.73|8,141,574,073.64|
|balance||||||
|2. Increased||||||
||132,808,121.89|190,710,235.54|4,953,453.89|13,952,564.78|342,424,376.10|
|amount of the period||||||
|(1) Outsourcing|4,937,244.26|139,064,886.17|4,953,453.89|9,938,314.17|158,893,898.49|
|(2) Transfer of||||||
|inventory\fixed||||||
||127,870,877.63|51,645,349.37||4,014,250.61|183,530,477.61|
|assets\project under||||||
|construction||||||
|(3) Increased||||||
|from enterprise||||||
|merger||||||
|3. Decreased||||||
||5,101,698.96|19,627,926.98|1,348,978.83|5,207,212.22|31,285,816.99|
|amount of the period||||||
|(1) Disposal or||||||
||5,101,698.96|19,627,926.98|1,348,978.83|5,207,212.22|31,285,816.99|
|Scrap||||||
|4. Closing||||||
||2,678,346,700.26|5,590,479,536.09|72,011,120.11|111,875,276.29|8,452,712,632.75|
|balance||||||
|II. Accumulative||||||
|depreciation||||||
|1.Opening||||||
||664,880,219.81|2,404,560,228.35|47,741,021.91|66,140,558.20|3,183,322,028.27|
|balance||||||
|2. Increased||||||
||79,609,991.66|253,672,043.58|5,502,153.37|16,911,882.45|355,696,071.06|
|amount of the period||||||
|(1) Withdrawal|79,609,991.66|253,672,043.58|5,502,153.37|16,911,882.45|355,696,071.06|
|3. Decreased||||||
||1,446,473.45|14,768,667.79|1,233,406.57|3,915,041.78|21,363,589.59|
|amount of the period||||||
|(1) Disposal or scrap|1,446,473.45|14,768,667.79|1,233,406.57|3,915,041.78|21,363,589.59|
|4. Closing||||||
||743,043,738.02|2,643,463,604.14|52,009,768.71|79,137,398.87|3,517,654,509.74|
|balance||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|III. Depreciation||||||
|reserves||||||
|1.Opening||||||
||4,823,890.00|22,457,499.57|53,835.13|68,764.63|27,403,989.33|
|balance||||||
|2. Increased||||||
|||2,566,270.02||734.82|2,567,004.84|
|amount of the period||||||
|(1) Withdrawal||2,566,270.02||734.82|2,567,004.84|
|3. Decreased||||||
|||2,488,341.00|||2,488,341.00|
|amount of the period||||||
|(1) Disposal or scrap||2,488,341.00|||2,488,341.00|
|4. Closing balance|4,823,890.00|22,535,428.59|53,835.13|69,499.45|27,482,653.17|
|IV. Book value||||||
|1. Closing book||||||
||1,930,479,072.24|2,924,480,503.36|19,947,516.27|32,668,377.97|4,907,575,469.84|
|value||||||
|2. Opening||||||
||1,880,936,167.52|2,992,379,499.61|20,611,788.01|36,920,600.90|4,930,848,056.04|
|book value||||||

(2) List of temporarily idle fixed assets
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Accumulative|Impairment|||
|Item|Original book value|||Book value|Notes|
|||depreciation|provision|||

(3) Fixed assets leased in from financing lease
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||Accumulative|||
|Item|Original book value||Impairment provision|Book value|
|||depreciation|||

(4) Fixed assets leased out from operation lease
Unit: RMB Yuan
|||
|-|-|
|Item|Closing book value|
|Houses and buildings|21,595,758.86|

(5) Details of fixed assets failed to accomplish certification of property
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Item|Book value|Reason|
|||Ongoing inspection, surveying,|
|Weaving and yarn dying workshop|113,009,638.24|verification to application procedures by|
|||Housing authorities|
|Employee’s dormitory building of eastern|||
||46,852,406.82|Same with above|
|area of industrial park|||
|Spinning Fourth factory workshop|71,475,577.92|Same with above|
|Employee’s dormitory building of western|||
||122,412,964.85|Same with above|
|area of industrial park|||
|Lufeng weaving dye workshop|139,589,989.72|Same with above|

Other notes
20. Construction in progress
(1) List of construction in progress
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item|||||||
|||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Complex building|||||||
|and employee’s|||||||
|dormitory|||||||
||849,549.02||849,549.02|12,939,182.17||12,939,182.17|
|building in|||||||
|western area of|||||||
|Lu Thai|||||||
|A new|||||||
|230,000-spindle|||||||
|production line|||||||
|project and a new|||||||
|35,000-ingot|4,337,162.70||4,337,162.70|4,850,066.53||4,850,066.53|
|two-for-one|||||||
|twisting|||||||
|production line|||||||
|project|||||||
|East sample|||||||
|||||17,204,613.50||17,204,613.50|
|factory|||||||
|Factory project of|||||||
||1,153,723.06||1,153,723.06|423,132.50||423,132.50|
|Xinjiang Lu Thai|||||||
|Reform project of|||||||
||30,335,215.53||30,335,215.53|22,032,798.42||22,032,798.42|
|Xinsheng|||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
|Thermal Power|||||
|Energy|||||
|conservation|9,445,960.77|9,445,960.77|10,301,098.08|10,301,098.08|
|project of Helijie|||||
|Lu Thai|||||
|(Cambodia)|3,202,357.80|3,202,357.80|12,450,194.68|12,450,194.68|
|garment project|||||
|Lu Thai (Burma)project|||||
||27,134,693.98|27,134,693.98|||
|Lu Thai(Vietnam) project|||||
||86,589,660.94|86,589,660.94|||
|Other smallprojects|||||
||42,045,705.70|42,045,705.70|43,384,140.92|43,384,140.92|
|Total|205,094,029.50|205,094,029.50|123,585,226.80|123,585,226.80|

 (2) Changes of significant construction in progress
Unit: RMB Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Openingbalance||||||||Ofwhich:|||
|||||Amount|||Proporti||||||
||||||||||Accumul||||
|||||that|||on|||the|Capitaliz||
||||||Other||||ative||||
||||Increase|transferr|||estimate|||amount|ation rate||
||Estimate||||decrease||||amount||||
|Name o f|||d amount|ed to||Closing|d of the|Project||of the|of the|Capital|
||d||||d amount||||of||||
|item|||of the|fixed||balance|project|progress||capitaliz|interests|resources|
||number||||of the||||capitaliz||||
||||period|assets of|||accumul|||ed|of the||
||||||period||||ed||||
|||||the|||ative|||interests|period||
||||||||||interests||||
|||||period|||input|||of theperiod|||
|Complex|||||||||||||
|building|||||||||||||
|and|||||||||||||
|employe|||||||||||||
|e’s|||||||||||||
|dormitor|106,500|, 12,939,1|9,779,53|21,869,1||849,549.|||||||
||||||||99.50%|99.50%||||Other|
|y|000.00|82.17|1.31|64.46||02|||||||
|building|||||||||||||
|in|||||||||||||
|western|||||||||||||
|area of|||||||||||||
|Lu Thai|||||||||||||
|A new|928,660|, 4,850,06|4,781,92|5,294,83||4,337,16|34.30%|34.30%||||Other|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|230,000-|000.00||6.53|6.85|0.68|2.70||||
|spindle||||||||||
|producti||||||||||
|on line||||||||||
|project||||||||||
|and a||||||||||
|new||||||||||
|35,000-i||||||||||
|ngot||||||||||
|two-for-||||||||||
|one||||||||||
|twisting||||||||||
|producti||||||||||
|on line||||||||||
|project||||||||||
|East||||||||||
||30,000,0||17,204,6|27,833,8|45,038,4|||||
|sample|||||||100.00%|100%|Other|
||00.00||13.50|25.22|38.72|||||
|factory||||||||||
|Factory||||||||||
|project||||||||||
||15,000,0||423,132.|12,691,5|11,960,9|1,153,72||||
|of|||||||87.00%|87%|Other|
||00.00||50|87.16|96.60|3.06||||
|Xinjiang||||||||||
|Lu Thai||||||||||
|Reform||||||||||
|project||||||||||
|of||||||||||
||50,300,0||22,032,7|25,481,2|17,178,8|30,335,2||||
|Xinshen|||||||94.00%|94%|Other|
||00.00|00.00|98.42|85.53|68.42|15.53||||
|g||||||||||
|Thermal||||||||||
|Power||||||||||
|Energy||||||||||
|conserva||||||||||
|tion|28,880,0||10,301,0|11,197,1|12,052,2|9,445,96||||
||||||||84.00%|84%|Other|
|project|00.00||98.08|36.85|74.16|0.77||||
|of||||||||||
|Helijie||||||||||
|Lu Thai||||||||||
|(Cambod||||||||||
||123,056,||12,450,1|37,813,6|47,061,4|3,202,35||||
|ia)|||||||70.00%|70%|Other|
||000.00||94.68|20.02|56.90|7.80||||
|garment||||||||||
|project||||||||||
|Lu Thai|61,136,0|||32,142,2|5,007,60|27,134,6|49.50%|49.50%|Other|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|(Burma)|00.00||99.47|5.49|93.98||||
|project|||||||||
|Lu Thai|||||||||
||242,282,||86,589,6||86,589,6||||
|(Vietnam||||||14.00%|14%|Other|
||300.00||60.94||60.94||||
|) project|||||||||
|Other|||||||||
|||43,384,1|16,728,4|18,066,8|42,045,7||||
|small||||||||Other|
|||40.92|06.96|42.18|05.70||||
|projects|||||||||
||1,585,81|123,585,|265,039,|183,530,|205,094,||||
|Total||||||--|--|--|
||4,300.00|226.80|280.31|477.61|029.50||||

(3) List of the withdrawal of the impairment provision of the construction in progress
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount|Reason|

Other notes
21. Engineering material
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Specific materials|187,384.85|587,256.00|
|Specific equipments|6,132,398.32|19,298,509.41|
|Total|6,319,783.17|19,885,765.41|

 Notes:
22. Liquidation of fixed assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Notes:
23. Productive biological assets
(1) Productive biological assets adopted cost measurement mode
√ Applicable□ Inapplicable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Planting industry|Livestock|Forestry|Aquaculture|Total|
|||Hu sheep||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|I. Original book|||
|value|||
|1. Opening|||
||1,310,500.00|1,310,500.00|
|balance|||
|2. Increased|||
|amount of the|284,971.02|284,971.02|
|period|||
|(1)|||
||24,000.00|24,000.00|
|Outsourcing|||
|(2) Self|||
||260,971.02|260,971.02|
|cultivate|||
|3. Decreased|||
|amount of the|196,600.00|196,600.00|
|period|||
|(1) Disposal|190,500.00|190,500.00|
|(2) Other|6,100.00|6,100.00|
|4. Closing|||
||1,398,871.02|1,398,871.02|
|balance|||
|II. Accumulative|||
|depreciation|||
|1. Opening|||
|balance|||
|2. Increased|||
|amount of the|249,624.84|249,624.84|
|period|||
|(1)|||
||249,624.84|249,624.84|
|Withdrawal|||
|3. Decreased|||
|amount of the|27,867.71|27,867.71|
|period|||
|(1) Disposal|26,871.83|26,871.83|
|(2) Other|995.88|995.88|
|4. Closing|||
||221,757.13|221,757.13|
|balance|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|III. Depreciation|||
|reserves|||
|1. Opening|||
|balance|||
|2. Increased|||
|amount of the|||
|period|||
|(1)|||
|Withdrawal|||
|3. Decreased|||
|amount of the|||
|period|||
|(1) Disposal|||
|(2) Other|||
|4. Closing|||
|balance|||
|IV. Book value|||
|1. Closing|||
||1,177,113.89|1,177,113.89|
|book value|||
|2. Opening|||
||1,310,500.00|1,310,500.00|
|book value|||

(2) Productive biological assets adopted fair value measurement mode
□ Applicable√ Inapplicable
24. Oil and gas assets
□ Applicable√ Inapplicable
25. Intangible assets
(1) List of intangible assets
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Land use right|Patent right|Non-patent right|Total|
|I. Original book|||||
|value|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
|1. Opening|||||
||445,235,221.44|1,985,176.47|180,000.00|447,400,397.91|
|balance|||||
|2. Increased|||||
||1,568,182.20||300,000.00|1,868,182.20|
|amount of the period|||||
|(1) Purchase|1,568,182.20||300,000.00|1,868,182.20|
|(2) Internal|||||
|R&D|||||
|(3) Enterprise|||||
|combination increase|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|4. Closing|||||
||446,803,403.64|1,985,176.47|480,000.00|449,268,580.11|
|balance|||||
|II. Accumulated|||||
|amortization|||||
|1. Opening|||||
||72,632,893.20|827,157.00|180,000.00|73,640,050.20|
|balance|||||
|2. Increased|||||
||12,014,025.60|198,517.68|30,000.00|12,242,543.28|
|amount of the period|||||
|(1)|||||
||12,014,025.60|198,517.68|30,000.00|12,242,543.28|
|Withdrawal|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|4. Closing|||||
||84,646,918.80|1,025,674.68|210,000.00|85,882,593.48|
|balance|||||
|III. Depreciation|||||
|reserves|||||
|1. Opening|||||
|balance|||||
|2. Increased|||||
|amount of the period|||||
|(1)|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
|Withdrawal|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|4. Closing|||||
|balance|||||
|IV. Book value|||||
|1. Closing book|||||
||362,156,484.84|959,501.79|270,000.00|363,385,986.63|
|value|||||
|2. Opening|||||
||372,602,328.24|1,158,019.47||373,760,347.71|
|book value|||||

The proportion the intangible assets formed from the internalR&D through the Company amount the balance of the intangible assets at the period-end.
(2) Details of fixed assets failed to accomplish certification of land use right
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|

Notes:
26.R&D expenses
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||Increase||Decrease|||
||||||Transfer into||
||Opening|Internal||Recognized||Closing|
|Item|||||||
||||||current||
||balance|development|Other|as intangible||balance|
||||||profits or||
|||expenses||assets|||
||||||losses||
|Product||294,178,756.|||294,178,756.||
|research||29|||29||
|||294,178,756.|||294,178,756.||
|Total|||||||
|||29|||29||

Other notes:
2015 Annual Report of Lu Thai Textile Co., Ltd. 27. Goodwill
(1) Original book value of goodwill
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Name of the|||||
|investees or the|||||
||Opening balance|Increase|Decrease|Closing balance|
|events formed|||||
|goodwill|||||
|Xinsheng Power|20,563,803.29|||20,563,803.29|
|Helijie|50,000.00|||50,000.00|
|Total|20,613,803.29|||20,613,803.29|

 (2) Impairment provision of goodwill
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Name of the|||||
|investees or the|||||
||Opening balance|Increase|Decrease|Closing balance|
|events formed|||||
|goodwill|||||

Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill impairment losses: Other notes:
28. Long-term unamortized expenses
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||Amortization|||
|Item|Opening balance|Increased amount||Decrease|Closing balance|
||||amount|||
|Land contracting fee||||||
||28,319,033.27|360,000.00|1,039,650.23||27,639,383.04|
|of Xinjiang Luthai||||||
|Land rent of||||||
|||58,481,467.88|996,705.67||57,484,762.21|
|overseas subsidiaries||||||
|Total|28,319,033.27|58,841,467.88|2,036,355.90||85,124,145.25|

 Other notes:
29. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
||Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|||||
||88,791,730.93|14,770,956.88|80,747,882.90|13,938,629.38|
|provision|||||
|Unrealized internal sales|||||
||62,610,524.74|8,953,164.62|54,548,472.47|7,895,874.08|
|gain and loss|||||
|One-time listed|||||
||||1,924,508.40|288,676.26|
|decoration expenses|||||
|Payroll payable|113,279,841.30|17,414,870.28|114,961,700.46|17,941,934.30|
|Deferred income|93,945,118.42|13,979,718.50|63,445,242.97|9,402,402.82|
|Change of fair value of|||||
|trading financial|46,695,875.00|7,004,381.25|3,306,200.00|495,930.00|
|liabilities|||||
|Total|405,323,090.39|62,123,091.53|318,934,007.20|49,963,446.84|

 (2) Deferred income tax liabilities had not been off-set
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Depreciation of fixed|||||
||13,289,056.67|2,192,694.35|12,513,412.24|2,064,713.02|
|assets|||||
|Total|13,289,056.67|2,192,694.35|12,513,412.24|2,064,713.02|

 (3) Deferred income tax assets or liabilities listed by net amount after off-set
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Mutual set-off amount of|Amount of deferred|Mutual set-off amount of|Amount of deferred|
||deferred income tax|income tax assets or|deferred income tax|income tax assets or|
|Item|||||
||assets and liabilities at|liabilities after off-set at|assets and liabilities at|liabilities after off-set at|
||the period-end|the period-end|the period-begin|the period-begin|
|Deferred income tax||62,123,091.53||49,963,446.84|
|assets|||||
|Deferred income tax||2,192,694.35||2,064,713.02|
|liabilities|||||

(4) List of unrecognized deferred income tax assets
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible temporary difference|8,124,396.63|9,184,255.09|
|Deductible losses|134,950,376.05|86,677,173.05|
|Total|143,074,772.68|95,861,428.14|

 (5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMB Yuan
|||||
|-|-|-|-|
|Years|Closing amount|Opening amount|Notes|
|Y 2016|9,542,681.08|9,735,028.99||
|Y 2017|20,826,906.25|22,207,758.19||
|Y 2018|23,670,032.23|27,926,362.05||
|Y 2019|23,798,042.42|26,808,023.82||
|Y 2020|57,112,714.07|||
|Total|134,950,376.05|86,677,173.05|--|

Notes:
30. Other non-current assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Prepayment for equipment|21,721,084.27||
|Prepayment for land|12,781,283.00|16,910,237.34|
|Total|34,502,367.27|16,910,237.34|

 Notes:
31. Short-term loans
(1) Category of short-term loans
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Pledge loan|28,266,701.32|70,000,000.00|
|Mortgage loan|180,000,000.00|288,230,000.00|
|Guaranteed loan|50,000,000.00||
|Credit loan|544,499,617.58|159,222,946.24|
|Total|802,766,318.90|517,452,946.24|

Notes of short-term loans category
2015 Annual Report of Lu Thai Textile Co., Ltd. (2) List of the short-term loans overdue but not return
The total amount of the overdue but not return short-term borrowings at the period-end was of RMB0, of which the situation of the significant overdue but not return short-term borrowings as follows:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Entity|Closing balance|Borrowing rate|Overdue time|Overdue rate|

 Notes:
32. Financial liabilities measured by fair value and the changes included in the current gains and losses Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Transaction financial liabilities|46,695,875.00|3,306,200.00|
|Derivative financial liabilities|46,695,875.00|3,306,200.00|
|Total|46,695,875.00|3,306,200.00|

 Notes:
33. Derivative financial liabilities
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Notes:
34. Notes payable
Unit: RMB Yuan
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Trade acceptance|2,709,149.48|7,421,979.09|
|Bank acceptance bill|400,000.00||
|Total|3,109,149.48|7,421,979.09|

 The total amount of the due but not pay notes payable at the period-end was of RMB0.
35. Accounts payable
(1) List of accounts payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Purchase of goods|163,649,100.70|257,834,663.07|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Engineering equipments|79,077,530.07|80,701,856.84|
|Other|5,843,774.80|5,545,719.25|
|Total|248,570,405.57|344,082,239.16|

 (2) Notes of the accounts payable aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|

 Notes:
36. Advance from customers
(1) List of advance from customers
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Advance from goods|95,077,531.32|82,176,191.45|
|Total|95,077,531.32|82,176,191.45|

 (2) Significant advance from customers aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|

 (3) Particulars of settled but unfinished projects formed by construction contract at period-end.
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Notes:
37. Payroll payable
(1) List of Payroll payable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|I. Short-term salary|261,086,385.47|1,362,127,680.97|1,332,434,718.81|290,779,347.63|
|II. Post-employment benefit-defined|452,821.46||||
|||192,341,685.52|192,310,254.99|484,251.99|
|contribution plans|||||
|III. Termination benefits||329,371.85|329,371.85||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
|Total|261,539,206.93|1,554,798,738.34|1,525,074,345.65|291,263,599.62|

 (2) List of Short-term salary
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Salary, bonus, allowance, subsidy|230,521,560.35|1,189,713,669.56|1,167,211,132.07|253,024,097.84|
|2. Employee welfare||53,661,132.50|53,661,132.50||
|3. Social insurance|155,792.81|72,469,232.04|72,370,229.29|254,795.56|
|Including: 1. Medical insurance premiums|90,003.82|61,466,299.87|61,328,922.99|227,380.70|
|Work-related injury insurance|19,076.12|6,374,396.68|6,381,077.87|12,394.93|
|Maternity insurance|46,712.87|4,628,535.49|4,660,228.43|15,019.93|
|4. Housing fund|29,662.62|20,957,062.65|20,964,264.95|22,460.32|
|5. Labor union budget and employee education|||||
||30,379,369.69|25,326,584.22|18,227,960.00|37,477,993.91|
|budget|||||
|Total|261,086,385.47|1,362,127,680.97|1,332,434,718.81|290,779,347.63|

 (3) List of drawing scheme
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Basic pension benefits|351,444.86|182,394,227.58|182,287,023.75|458,648.69|
|Unemployment insurance|101,376.60|9,947,457.94|10,023,231.24|25,603.30|
|Total|452,821.46|192,341,685.52|192,310,254.99|484,251.99|

 Notes:
The Company, in line with the requirement, participate the endowment insurance, unemployment insurance scheme and so on, according to the scheme, the Company monthly pay to the scheme in line with27% and1.5% of the endowment insurance base, except the monthly payment, the Company no longer shoulder the further payment obligation, the relevant expense occurred was recorded into current profits and losses or related assets costs.
38. Taxes payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT|8,095,634.56|6,300,150.34|
|Business tax|346,838.39|437,293.48|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Corporate income tax|54,874,320.89|47,179,155.84|
|Personal income tax|677,155.21|1,327,131.46|
|Urban maintenance and construction tax|3,706,913.14|5,117,786.89|
|Stamp tax|452,140.04|383,843.12|
|Property tax|4,554,321.87|4,256,461.03|
|Land use tax|4,592,696.80|4,556,076.61|
|Education Surcharge|1,668,460.01|2,254,623.77|
|Local education surtax|1,112,306.69|1,503,725.02|
|Local water conservancy facility|||
||534,220.54|736,158.41|
|construction fund|||
|Total|80,615,008.14|74,052,405.97|

 Notes:
39. Interest payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Interest payable on short-term borrowings and long term borrowings|1,851,876.78|511,373.44|
|Total|1,851,876.78|511,373.44|

 Particulars of significant overdue unpaid interest:
Unit: RMB Yuan
||||
|-|-|-|
|Entity|Overdue amount|Overdue reason|

Notes:
40. Dividends payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Common stock dividends of the Group|441,113.64|441,456.54|
|Total|441,113.64|441,456.54|

 Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
41. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|The deposit and guarantee|19,946,789.66|18,533,942.00|
|Collecting payment on behalf of others|16,801,587.86|11,481,319.14|
|Intercourse funds|2,941,300.16|10,383,779.31|
|Other|22,825,136.85|17,676,832.73|
|Total|62,514,814.53|58,075,873.18|

 (2) Other significant accounts payable with aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Cotton and Linen Company|11,925,000.00|Received deposit of sale contract|
|Total|11,925,000.00|--|

Other notes
42. Liabilities classified as holding for sale
43. Non-current liabilities due within 1 year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Long-term loans due within 1 year||100,733,898.72|
|Total||100,733,898.72|

 Notes:
44. Other current-liabilities
45. Long-term loan
(1) Category of long-term loan
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Pledge loan|0.00|0.00|
|Mortgage loan|0.00|0.00|
|Guaranteed loan|0.00|0.00|
|Credit loan|0.00|110,638,544.31|
|Less: long-term loans due within 1 year|0.00|-100,733,898.72|
|Total|0|9,904,645.59|

2015 Annual Report of Lu Thai Textile Co., Ltd. 46. Bonds payable
47. Long-term payable
(1) Long-term payable listed by nature of the account
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Power bonds payable||220,000.00|

 48. Long term payroll payable
(1) List of long term payroll payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|III. Other long term welfare|81,499,403.98|80,360,457.97|
|Total|81,499,403.98|80,360,457.97|

 (2) Changes of defined benefit plans
49. Special payable
50. Accrued liabilities
51. Deferred income
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Formation reasons|
|Government subsidies|66,155,242.97|31,919,400.00|2,272,524.55|95,802,118.42|Government subsidies|
|Unrealized financing incomes|901,978.43||569,018.94|332,959.49|Finance lease|
|Total|67,057,221.40|31,919,400.00|2,841,543.49|96,135,077.91|--|

Items involved in government subsidies:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||Amount of|Amount accrued in|Other||Related to the assets/|
|Item|Opening balance||||Closing balance||
|||newly subsidy|non-business income|changes||income|
|Land|63,445,242.97||1,393,157.88||62,052,085.09|Related to the assets|
|Equipment|1,620,000.00|31,919,400.00|746,366.67||32,793,033.33|Related to the assets|
|Production|||||||
||1,090,000.00||133,000.00||957,000.00|Related to the assets|
|biological assets|||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Total|66,155,242.97|31,919,400.00|2,272,524.55|95,802,118.42|--|

52. Other non-current liabilities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Other|1,840,000.00|1,840,000.00|
|Total|1,840,000.00|1,840,000.00|

 53. Share capital
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease (+/-)||||||
||Opening|||Capitalization|||Closing|
|||Newly issue||||||
||balance||Bonus shares|of public|Other|Subtotal|balance|
|||share||||||
|||||reserves||||
|The sum of|955,758,496.00||||||955,758,496.00|
|shares||||||||

Notes: The share capital of the Company was reviewed and examined by Ruihua Certificated Public Accountants which the Capital Verification Report Ruihua YZ[2014] No. 37040004.
54. Other equity instruments
(1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin
(2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Financial|Opening period||Increase||Decrease||Closing period||
|instruments|||||||||
|outstanding|Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|issued|||||||||

Changes, reason of change and basis of relevant accounting treatment of other equity instruments in reporting period:
Notes:
55. Capital reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||
|-|-|-|-|
|Capital premium|948,167,616.39||948,167,616.39|
|Other capital reserves|58,871,944.74|106,605.84|58,978,550.58|
|Total|1,007,039,561.13|106,605.84|1,007,146,166.97|

 Other notes, including changes and reason of change:
Other capital reserve increase RMB106,605.84, mainly was the recovery of bonus of original restricted share incentive personnel who left the office
56. Treasury stock
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|The Company’s shared|||||
|acquired due to the|||||
|||11,610,721.68||11,610,721.68|
|reduce of registered|||||
|capital|||||
|Total||11,610,721.68||11,610,721.68|

 Other notes, including changes and reason of change:
57. Other comprehensive income
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Reporting period||||||
||||Less: Amount|||||
||||transferred|||||
||||into profit and|||||
||||loss in the|||||
|||Amount|||After-tax|After-tax||
||Opening||current period|Less:|||Closing|
|Item||||||||
|||incurred|||attribute to|attribute to||
||balance||that|income tax|||balance|
|||before|||the parent|minority||
||||recognized|expense||||
|||income tax|||company|shareholder||
||||into other|||||
||||comprehensive|||||
||||income in|||||
||||prior period|||||
|II. Other comprehensive reclassified||25,530,950.|||25,530,950.68||17,090,77|
||-8,440,178.37|||||||
|into profits or losses||68|||||2.31|
|Converted difference of the||25,530,950.|||25,530,950.68||17,090,77|
||-8,440,178.37|||||||
|foreign currency financial statement||68|||||2.31|
||-8,440,178.37|25,530,950.|||25,530,950.68||17,090,772.31|
|total||||||||
|||68||||||

Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow hedging gains and losses
transfer into arbitraged items:
2015 Annual Report of Lu Thai Textile Co., Ltd. 58. Special reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

 Other notes, including changes and reason of change:
59. Surplus reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Statutory surplus|||||
||739,006,259.89|73,300,671.81||812,306,931.70|
|reserves|||||
|Discretional surplus|||||
||3,341,572.58|||3,341,572.58|
|reserves|||||
|Total|742,347,832.47|73,300,671.81||815,648,504.28|

 Other note, including changes and reason of change
60. Retained profits
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Last period|
|Opening balance of retained profits beforeadjustments|||
||3,892,066,534.32|3,379,354,741.18|
|Opening balance of retained profits afteradjustments|3,892,066,534.32||
|||3,379,354,741.18|
|Add: Net profit attributable to owners of theCompany|||
||712,193,243.19|958,725,402.84|
|Less: Withdrawal of statutory surplus reserves|73,300,671.81|82,809,421.22|
|Dividend of common stock payable|477,879,248.00|363,204,188.48|
|Closing retained profits|4,053,079,857.70|3,892,066,534.32|

 List of adjustment of opening retained profits:
1) RMB0 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB0 opening retained profits was affected by changes on accounting policies.
3) RMB0 opening retained profits was affected by correction of significant accounting errors.
4) RMB0 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB0opening retained profits was affected totally by other adjustments.
2015 Annual Report of Lu Thai Textile Co., Ltd. 61. Revenues and operating costs
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Reporting period||Same period of last year||
|Item|||||
||Revenue|Operating costs|Revenue|Operating costs|
|Main operations|5,909,772,762.98|4,175,234,398.18|5,915,372,574.27|4,086,154,764.14|
|Other operations|263,550,015.63|165,800,478.86|254,316,218.26|148,429,654.64|
|Total|6,173,322,778.61|4,341,034,877.04|6,169,688,792.53|4,234,584,418.78|

 62. Business tax and surcharges
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Business tax|1,699,505.61|1,543,096.38|
|Urban maintenance and construction tax|28,144,085.36|25,173,497.57|
|Education Surcharge|12,865,492.60|11,069,160.40|
|Local education surtax|8,576,995.04|7,379,440.32|
|Local water conservancy facility|||
||4,023,905.42|3,572,581.87|
|construction fund|||
|Total|55,309,984.03|48,737,776.54|

 Notes:
63. Sales expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Salary|52,872,651.88|52,551,757.68|
|Transport fees|33,139,133.69|29,390,312.02|
|Advertising expense|24,551,068.37|19,543,918.94|
|Mall costs|13,806,476.08|12,103,271.52|
|Terminal Handing charges|7,552,206.39|6,627,616.75|
|Depreciation charge|7,225,171.78|6,588,088.96|
|Business travel charges|5,319,184.05|4,308,622.84|
|Copyright royalty|3,227,464.60|2,970,940.04|
|Rental charges|2,681,385.17|3,626,236.55|
|Marketing costs of the offices|1,913,843.93|2,240,056.21|
|Other|39,644,709.25|38,332,673.36|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Total|191,933,295.19|178,283,494.87|

 Notes:
64. Administrative expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|R&D expenses|294,928,756.29|289,005,271.10|
|Salary|115,940,476.52|121,622,670.65|
|Taxes|40,962,025.54|34,632,666.02|
|Depreciation charge|36,733,403.06|24,019,467.83|
|Warehouse funding|21,383,855.97|19,186,460.22|
|Rental charges|15,572,868.91|12,020,178.94|
|Labor-union expenditure|14,842,795.98|13,546,133.52|
|Employee education budget|10,483,788.24|10,739,493.11|
|Amortization of intangible assets|10,383,276.33|10,202,923.93|
|Transport fees|6,815,115.78|6,269,569.17|
|Stock payment||6,041,853.38|
|Other|102,658,021.67|87,258,443.21|
|Total|670,704,384.29|634,545,131.08|

 Notes:
65. Financial expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Interest expenses|18,898,648.84|24,513,571.60|
|Less: Interest income|6,226,423.16|7,556,637.78|
|Less: Amount of capitalized interest|||
|Exchange gains and losses|-3,061,394.46|-7,989,225.52|
|Less: capitalization of foreign currency|||
|exchange gains and losses|||
|Other|6,870,192.67|6,495,074.89|
|Total|16,481,023.89|15,462,783.19|

Notes:
2015 Annual Report of Lu Thai Textile Co., Ltd. 66. Asset impairment loss
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|I. Bad debt loss|4,827,646.30|-5,357,478.80|
|II. Inventory falling price loss|19,902,794.60|18,132,197.12|
|VII. Impairment losses of fix asset|||
||2,567,004.84|110,105.84|
|impairment loss|||
|Total|27,297,445.74|12,884,824.16|

 Notes:
67. Gains on the changes in the fair value
Unit: RMB Yuan
||||
|-|-|-|
|Source|Reporting period|Same period of last year|
|2. Financial assets measured by fair value|||
|and the changes be included in the current|-17,296,256.36|-29,949,120.00|
|profits and losses|||
|Of which, gains on the changes in the|||
|fair value of derivative financial||-29,949,120.00|
|instruments|||
|Financial liabilities measured by fair value|||
|and the changes included in the current|-43,389,675.00|-3,306,200.00|
|gains and losses|||
|Total|-60,685,931.36|-33,255,320.00|

 Notes:
68. Investment income
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Investment income received from financial|||
|assets measured by fair value and the changes|||
||373,901.27||
|be included in the current profits and losses|||
|during holding period|||
|Investment income received from disposal of|||
|financial assets measured by fair value and the|||
||31,166,114.24|27,935,884.70|
|changes be included in the current profits and|||
|losses during holding period|||
|Investment income received from holding of||120,000.00|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|available-for-sale financial assets|||
|Total|31,540,015.51|28,055,884.70|

 Notes:
69. Non-operating gains
Unit: RMB Yuan
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting period|Same period of last year||
||||non-recurring gains and losses|
|Total gains from disposal of|959,445.92|2,759,790.52||
||||959,445.92|
|non-current assets||||
|Including: Gains from disposal||||
||959,445.92|2,759,790.52|959,445.92|
|of fixed assets||||
|Government subsidies|43,266,788.43|99,126,878.52|43,266,788.43|
|Other|7,975,499.49|25,463,765.76|7,975,499.49|
|Total|52,201,733.84|127,350,434.80|52,201,733.84|

 Government subsidies recorded into current profits and losses
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether|||||
||||||Whether||||
|||||influence the||||Related to the|
||Distribution|Distribution|||Special|Reporting|Same period||
|Item|||Nature/type|profits or||||assets/|
||entity|reason|||subsidy or|period|of last year||
|||||losses of the||||income|
||||||not||||
|||||year or not|||||
|Subsidy for|||||||||
||||Subsidy from||||||
|independent|||||||||
||||R&D||||||
|innovation|Finance||||||||
||||Technical|||||Related to the|
|and|Bureau of|Subsidy||Yes|No|1,000,000.00|||
||||updating and|||||income|
|achievements|Zibo||||||||
||||transformatio||||||
|transformatio|||||||||
||||n, etc.||||||
|n|||||||||
|The|Zibo||||||||
||||Subsidy from||||||
|outstanding|High-tech||||||||
||||R&D||||||
|contribution|Industrial||||||||
||||Technical|||||Related to the|
|prize in|Development|Award||Yes|No|502,400.00|||
||||updating and|||||income|
|science and|Zone||||||||
||||transformatio||||||
|technology|Management||||||||
||||n, etc.||||||
|innovation|Committee||||||||
|Funds for|Finance||Due to|||||Related to the|
|||Subsidy||Yes|No|422,000.00|||
|encouraging|Bureau of||engaged in|||||income|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|foreign trade|Zichuan||special|||||
|development|District||industry that|||||
||||the state|||||
||||encouraged|||||
||||and|||||
||||supported,|||||
||||gained|||||
||||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
|Funds for|||encouraged|||||
|development|Finance||and|||||
|of center|Bureau of||supported,||||Related to the|
|||Subsidy||Yes|No|100,000.00||
|foreign trade|Zichuan||gained||||income|
|and economic|District||subsidy|||||
|cooperation|||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||Finance||encouraged|||||
|Saving|Bureau of||and||||Related to the|
|||Subsidy||Yes|No|330,000.00||
|energy funds|Zichuan||supported,||||income|
||District||gained|||||
||||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
|Credit|Finance||and|||||
|insurance|Bureau of||supported,||||Related to the|
|||Subsidy||Yes|No|372,024.00||
|premium|Zichuan||gained||||income|
|subsidies|District||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy from|||||
||||R&D|||||
||Ministry of|||||||
|Project funds|||Technical||||Related to the|
||Science and|Subsidy||Yes|No|278,500.00||
|allowance|||updating and||||income|
||Technology|||||||
||||transformatio|||||
||||n, etc.|||||
||||Subsidy from|||||
||||R&D|||||
||Ministry of|||||||
|Project funds|||Technical||||Related to the|
||Science and|Subsidy||Yes|No|46,000.00||
|subsidy|||updating and||||income|
||Technology|||||||
||||transformatio|||||
||||n, etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
||||with local|||||
|Social|Career office|||||||
||||government||||Related to the|
|security|of Zichuan|Subsidy||Yes|No|7,082.10||
||||attracting||||income|
|subsidy|District|||||||
||||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
|Science and|Finance||Subsidy from|||||
||||||||Related to the|
|technology|Bureau of|Subsidy|R&D|Yes|No|4,640,000.00||
||||||||income|
|innovation|Chuan||Technical|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|fund|District||updating and|||||
||||transformatio|||||
||||n, etc.|||||
||||Subsidy from|||||
||People's||R&D|||||
|Award for||||||||
||Government||Technical||||Related to the|
|Science and||Award||Yes|No|100,000.00||
||of Shandong||updating and||||income|
|Technology||||||||
||Province||transformatio|||||
||||n, etc.|||||
||||Subsidy from|||||
|Science and|||R&D|||||
||People's|||||||
|technology|||Technical||||Related to the|
||Government|Award||Yes|No|100,000.00||
|and patent|||updating and||||income|
||of Zibo City|||||||
|award|||transformatio|||||
||||n, etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
||Finance||with local|||||
|Industrial||||||||
||Bureau of||government||||Related to the|
|design||Subsidy||Yes|No|400,000.00||
||Zichuan||attracting||||income|
|support funds||||||||
||District||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
|The industry||||||||
||Finance||with local|||||
|and||||||||
||Bureau of||government||||Related to the|
|information||Subsidy||Yes|No|100,000.00||
||Zichuan||attracting||||income|
|industry||||||||
||District||investment|||||
|support funds||||||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||Finance||Due to|||||
||Bureau of||engaged in|||||
||Zichuan||special|||||
|Import||||||||
||District,||industry that||||Related to the|
|discount||Subsidy||Yes|No|30,000.00||
||Bureau of||the state||||income|
|interest funds||||||||
||Commerce of||encouraged|||||
||Zichuan||and|||||
||District||supported,|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||gained|||||
||||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||Finance||the state|||||
||Bureau of||encouraged|||||
||Zichuan||and|||||
|Export credit||||||||
||District,||supported,||||Related to the|
|insurance||Subsidy||Yes|No|287,200.00||
||Bureau of||gained||||income|
|premiums||||||||
||Commerce of||subsidy|||||
||Zichuan||(obtaining in|||||
||District||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
||Finance||and|||||
|Import||||||||
||Bureau of||supported,||||Related to the|
|discount||Subsidy||Yes|No|70,000.00||
||Zichuan||gained||||income|
|interest funds||||||||
||District||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
|Taishan|Shandong||Subsidy|||||
||||||||Related to the|
|scholar|Provincial|Subsidy|gained due to|Yes|No|300,000.00||
||||||||income|
|construction|Party||confirming|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|funds|Committee||with local|||||
||Organization||government|||||
||Department||attracting|||||
||||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||Human||gained due to|||||
||Resources||confirming|||||
|Graduate|and Social||with local|||||
|employment|Security||government||||Related to the|
|||Subsidy||Yes|No|360,000.00||
|apprentice|Bureau of||attracting||||income|
|subsidies|Zibo, Finance||investment|||||
||Bureau of||and local|||||
||Zibo||supportive|||||
||||policy etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
|Funds for|||encouraged|||||
|development|Finance||and|||||
|of center|Bureau of||supported,||||Related to the|
|||Subsidy||Yes|No|360,446.00||
|foreign trade|Zichuan||gained||||income|
|and economic|District||subsidy|||||
|cooperation|||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||Human||Subsidy|||||
||Resources||gained due to|||||
||and Social||confirming|||||
|Subsidies for|Security||with local|||||
|unemployme|Bureau of||government||||Related to the|
|||Subsidy||Yes|No|4,214,746.00||
|nt and stable|Shandong,||attracting||||income|
|position|Finance||investment|||||
||Bureau of||and local|||||
||Shandong,||supportive|||||
||Development||policy etc.|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||and Reform|||||||
||Commission|||||||
||of Shandong,|||||||
||the Letter|||||||
||Committee of|||||||
||Shandong|||||||
||||Subsidy from|||||
||||R&D|||||
|Award for||||||||
||||Technical||||Related to the|
|Science and|CTEI|Award||Yes|No|50,000.00||
||||updating and||||income|
|Technology||||||||
||||transformatio|||||
||||n, etc.|||||
||||Subsidy|||||
||||gained due to|||||
|Subsidies for|Finance|||||||
||||confirming|||||
|transferring|Department|||||||
||||with local|||||
|Xinjiang|of the|||||||
||||government||||Related to the|
|cotton to|Xinjiang|Subsidy||Yes|No|1,667,800.00||
||||attracting||||income|
|warehouses|Uygur|||||||
||||investment|||||
|out of|Autonomous|||||||
||||and local|||||
|Xinjiang|Region|||||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
||||with local|||||
|Exhibit|Commerce|||||||
||||government||||Related to the|
|booths|Department|Subsidy||Yes|No|35,500.00||
||||attracting||||income|
|subsidies|of Shandong|||||||
||||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||Human||gained due to|||||
||Resources||confirming|||||
||and Social||with local|||||
|Technicians|Security||government||||Related to the|
|||Subsidy||Yes|No|50,000.00||
|subsidies|Bureau of||attracting||||income|
||Zibo, Finance||investment|||||
||Bureau of||and local|||||
||Zibo||supportive|||||
||||policy etc.|||||
|Social|Financial|Subsidy|Subsidy|Yes|No|560,028.43|Related to the|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|insurance|Department||gained due to||||income|
|subsidies and|of Shandong,||confirming|||||
|post subsidies|Department||with local|||||
||of Labour||government|||||
||and Social||attracting|||||
||Security of||investment|||||
||Shandong||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy from|||||
||||R&D|||||
|Patent|Finance|||||||
||||Technical||||Related to the|
|development|Bureau of|Subsidy||Yes|No|80,000.00||
||||updating and||||income|
|subsidy|Zibo|||||||
||||transformatio|||||
||||n, etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
||||and|||||
|Import credit|Finance|||||||
||||supported,||||Related to the|
|insurance|Bureau of|Subsidy||Yes|No|45,485.00||
||||gained||||income|
|premiums|Zibo|||||||
||||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy|||||
||||gained due to|||||
|Funds for|||confirming|||||
|development|||with local|||||
||Finance|||||||
|of foreign|||government||||Related to the|
||Bureau of|Subsidy||Yes|No|105,600.00||
|trade and|||attracting||||income|
||Zibo|||||||
|economic|||investment|||||
|cooperation|||and local|||||
||||supportive|||||
||||policy etc.|||||
|Science and|People's||Subsidy from||||Related to the|
|||Award||Yes|No|30,000.00||
|technology|Government||R&D||||income|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|and patent|of Zibo City||Technical|||||
|award|||updating and|||||
||||transformatio|||||
||||n, etc.|||||
||||Subsidy|||||
||Finance||gained due to|||||
||Bureau of||confirming|||||
|Special funds||||||||
||Zichuan||with local|||||
|for the||||||||
||District,||government||||Related to the|
|service||Subsidy||Yes|No|54,600.00||
||Bureau of||attracting||||income|
|industry||||||||
||Commerce of||investment|||||
|development||||||||
||Zichuan||and local|||||
||District||supportive|||||
||||policy etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
|Special funds||||||||
||||encouraged|||||
|for||||||||
||||and|||||
|development|Finance|||||||
||||supported,||||Related to the|
|of center|Bureau of|Subsidy||Yes|No|37,530.00||
||||gained||||income|
|foreign trade|Zibo|||||||
||||subsidy|||||
|and economic||||||||
||||(obtaining in|||||
|cooperation||||||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy from|||||
||||R&D|||||
|Award for||||||||
||CTEI Award||Technical||||Related to the|
|Science and||Award||Yes|No|10,000.00||
||Office||updating and||||income|
|Technology||||||||
||||transformatio|||||
||||n, etc.|||||
||||Due to|||||
||||engaged in|||||
|Import|Department||special|||||
||||||||Related to the|
|discount|of Finance of|Subsidy|industry that|Yes|No|80,000.00||
||||||||income|
|interest funds|Shandong||the state|||||
||||encouraged|||||
||||and|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||supported,|||||
||||gained|||||
||||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
||Economic|||||||
|Energy|||with local|||||
||and|||||||
|management|||government||||Related to the|
||Information|Award||Yes|No|2,880,000.00||
|financial|||attracting||||income|
||Commission|||||||
|reward|||investment|||||
||of Shandong|||||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||Zibo||encouraged|||||
||Environment||and|||||
|Fund for the||||||||
||al Protection||supported,||||Related to the|
|control of air||Subsidy||Yes|No|1,830,000.00||
||Agency,||gained||||income|
|pollution||||||||
||Zichuan||subsidy|||||
||Branch||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||The Letter||Subsidy|||||
||Committee of||gained due to|||||
||the Xinjiang||confirming|||||
|Electricity||||||||
||Uygur||with local||||Related to the|
|Finance||Subsidy||Yes|No|925,204.72||
||Autonomous||government||||income|
|subsidies||||||||
||Region,||attracting|||||
||Development||investment|||||
||and Reform||and local|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||Commission||supportive|||||
||of||policy etc.|||||
||Autonomous|||||||
||Region,|||||||
||Finance|||||||
||Department|||||||
||of|||||||
||Autonomous|||||||
||Region,|||||||
||Chinese|||||||
||power|||||||
||company in|||||||
||Xinjiang|||||||
||||Subsidy|||||
|Subsidies for|||gained due to|||||
||Finance|||||||
|transferring|||confirming|||||
||Department|||||||
|Xinjiang|||with local|||||
||of the|||||||
|cotton yarn|||government||||Related to the|
||Xinjiang|Subsidy||Yes|No|4,351,400.00||
|to|||attracting||||income|
||Uygur|||||||
|warehouses|||investment|||||
||Autonomous|||||||
|out of|||and local|||||
||Region|||||||
|Xinjiang|||supportive|||||
||||policy etc.|||||
||Finance|||||||
||||Subsidy|||||
||Department|||||||
|Cotton|||gained due to|||||
||of Xinjiang|||||||
|production|||confirming|||||
||Uygur|||||||
|subsidies and|||with local|||||
||Autonomous|||||||
|discounts of|||government||||Related to the|
||Region, the|Subsidy||Yes|No|4,472,200.00||
|Xinjiang|||attracting||||income|
||Letter|||||||
|Uygur|||investment|||||
||Commission|||||||
|Autonomous|||and local|||||
||of|||||||
|Region|||supportive|||||
||Autonomous|||||||
||||policy etc.|||||
||Region|||||||
||||Subsidy|||||
||Finance||gained due to|||||
||Department||confirming|||||
|Social|of the||with local|||||
||||||||Related to the|
|security|Xinjiang|Subsidy|government|Yes|No|3,412,264.53||
||||||||income|
|subsidy|Uygur||attracting|||||
||Autonomous||investment|||||
||Region||and local|||||
||||supportive|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||policy etc.|||||
||||Subsidy|||||
||||gained due to|||||
|Subsidies for|Finance|||||||
||||confirming|||||
|transferring|Department|||||||
||||with local|||||
|Xinjiang|of the|||||||
||||government||||Related to the|
|cotton to|Xinjiang|Subsidy||Yes|No|4,833,500.00||
||||attracting||||income|
|warehouses|Uygur|||||||
||||investment|||||
|out of|Autonomous|||||||
||||and local|||||
|Xinjiang|Region|||||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||||gained due to|||||
||Finance|||||||
||||confirming|||||
||Department|||||||
||||with local|||||
|Social|of the|||||||
||||government||||Related to the|
|security|Xinjiang|Subsidy||Yes|No|345,790.00||
||||attracting||||income|
|subsidy|Uygur|||||||
||||investment|||||
||Autonomous|||||||
||||and local|||||
||Region|||||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
||The county||with local|||||
|Finance|government||government||||Related to the|
|||Subsidy||Yes|No|517,000.00||
|subsidies|office of Pupi||attracting||||income|
||Avati||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||Akesu|||||||
||||Subsidy|||||
||Prefecture|||||||
||||gained due to|||||
||Bureau of|||||||
||||confirming|||||
||Finance,|||||||
||||with local|||||
||Office of|||||||
|Financial|||government||||Related to the|
||Poverty|Subsidy||Yes|No|262,500.00||
|Discounts|||attracting||||income|
||Alleviation|||||||
||||investment|||||
||and|||||||
||||and local|||||
||Development|||||||
||||supportive|||||
||of Akesu|||||||
||||policy etc.|||||
||Prefecture|||||||
|Financial|Akesu|Subsidy|Subsidy|Yes|No|150,000.00|Related to the|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|Discounts|Prefecture||gained due to|||||income|
||Bureau of||confirming||||||
||Finance,||with local||||||
||Office of||government||||||
||Poverty||attracting||||||
||Alleviation||investment||||||
||and||and local||||||
||Development||supportive||||||
||of Akesu||policy etc.||||||
||Prefecture||||||||
||Human||||||||
||||Subsidy||||||
||Resources||||||||
||||gained due to||||||
||and Social||||||||
||||confirming||||||
||Security||||||||
||||with local||||||
|Labor|Bureau of||||||||
||||government|||||Related to the|
|training|Akesu|Subsidy||Yes|No|162,305.00|||
||||attracting|||||income|
|subsidy|Prefecture,||||||||
||||investment||||||
||Akesu||||||||
||||and local||||||
||Prefecture||||||||
||||supportive||||||
||Bureau of||||||||
||||policy etc.||||||
||Finance||||||||
||||Subsidy||||||
||||gained due to||||||
||Finance||||||||
||||confirming||||||
||Department||||||||
||||with local||||||
|Subsidies for|of the||||||||
||||government|||||Related to the|
|superior crop|Xinjiang|Subsidy||Yes|No|25,158.10|||
||||attracting|||||income|
|varieties|Uygur||||||||
||||investment||||||
||Autonomous||||||||
||||and local||||||
||Region||||||||
||||supportive||||||
||||policy etc.||||||
||||Due to||||||
||||engaged in||||||
||Economic||special||||||
||and||industry that||||||
||Information||the state||||||
|Subsidy for|||||||||
||Commission||encouraged|||||Related to the|
|key project of||Subsidy||Yes|No||1,000,000.00||
||of Zibo,||and|||||income|
|energy saving|||||||||
||Finance||supported,||||||
||Bureau of||gained||||||
||Zibo||subsidy||||||
||||(obtaining in||||||
||||line with the||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
|Special funds||||||||
||Finance||and|||||
|for||||||||
||Bureau of||supported,||||Related to the|
|encouraging||Subsidy||Yes|No|200,000.00||
||Zichuan||gained||||income|
|foreign trade||||||||
||District||subsidy|||||
|development||||||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy from|||||
||Department|||||||
||||R&D|||||
|Special fund|of Finance of|||||||
||||Technical||||Related to the|
|for Patent|Shandong|Subsidy||Yes|No|104,000.00||
||||updating and||||income|
|Development|and IPO of|||||||
||||transformatio|||||
||Shandong|||||||
||||n, etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
|Residential||||||||
||||encouraged|||||
|building heat|Department|||||||
||||and|||||
|metering and|of Housing|||||||
||||supported,||||Related to the|
|energy-savin|and|Award||Yes|No|3,468,004.00||
||||gained||||income|
|g reform|Urban-Rural|||||||
||||subsidy|||||
|project|of Shandong|||||||
||||(obtaining in|||||
|incentives||||||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
|Subsidy for|Finance|Subsidy|Due to|Yes|No|9,000,000.00|Related to the|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|development|Bureau of||engaged in||||income|
|of new|Zichuan||special|||||
|industries|District||industry that|||||
||||the state|||||
||||encouraged|||||
||||and|||||
||||supported,|||||
||||gained|||||
||||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy from|||||
||Finance||R&D|||||
|Subsidy for||||||||
||Bureau of||Technical||||Related to the|
|technical||Subsidy||Yes|No|2,680,000.00||
||Zichuan||updating and||||income|
|innovation||||||||
||District||transformatio|||||
||||n, etc.|||||
||Department|||||||
|The|of Finance of||Subsidy from|||||
|development|Shandong||R&D|||||
|of science|and Science||Technical||||Related to the|
|||Subsidy||Yes|No|200,000.00||
|and|and||updating and||||income|
|technology|Technology||transformatio|||||
|fund|Department||n, etc.|||||
||of Shandong|||||||
||||Subsidy from|||||
|Award for|People's||R&D|||||
|Science and|Government||Technical||||Related to the|
|||Award||Yes|No|50,000.00||
|Technology|of Shandong||updating and||||income|
|of Shandong|Province||transformatio|||||
||||n, etc.|||||
||||Subsidy from|||||
|Award for|||R&D|||||
||People's|||||||
|Science and|||Technical||||Related to the|
||Government|Award||Yes|No|100,000.00||
|Technology|||updating and||||income|
||of Zibo City|||||||
|of Zibo|||transformatio|||||
||||n, etc.|||||
|The|Finance||Subsidy from|||33,660,000.0|Related to the|
|||Subsidy||Yes|No|||
|traditional|Bureau of||R&D|||0|income|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|industry|Zichuan||Technical|||||
|upgrade fund|District||updating and|||||
||||transformatio|||||
||||n, etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||The ministry||the state|||||
|Special fund||||||||
||of industry||encouraged|||||
|for deep||||||||
||and||and|||||
|integration of||||||||
||information||supported,||||Related to the|
|informationiz||Subsidy||Yes|No|600,000.00||
||technology||gained||||income|
|ation and||||||||
||informatizati||subsidy|||||
|industrializati||||||||
||on promotion||(obtaining in|||||
|on||||||||
||department||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
|Special fund|||Subsidy from|||||
|for energy|Finance||R&D|||||
|conservation|Bureau of||Technical||||Related to the|
|||Subsidy||Yes|No|1,500,000.00||
|and|Zichuan||updating and||||income|
|emissions|District||transformatio|||||
|reduction|||n, etc.|||||
||||Subsidy|||||
||Human||gained due to|||||
||Resources||confirming|||||
|Graduate|and Social||with local|||||
|employment|Security||government||||Related to the|
|||Subsidy||Yes|No|331,200.00||
|apprentice|Bureau of||attracting||||income|
|subsidies|Zibo, Finance||investment|||||
||Bureau of||and local|||||
||Zibo||supportive|||||
||||policy etc.|||||
||||Subsidy from|||||
||Quality and|||||||
|Standardized|||R&D|||||
||Technical|||||||
|funded|||Technical||||Related to the|
||Supervision|Award||Yes|No|120,000.00||
|project|||updating and||||income|
||Office of|||||||
|incentives|||transformatio|||||
||Zibo|||||||
||||n, etc.|||||
|Business|Finance|Award|Subsidy from|Yes|No|100,000.00|Related to the|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Administratio|Bureau of||R&D||||income|
|n Award of|Zichuan||Technical|||||
|Shandong|District||updating and|||||
||||transformatio|||||
||||n, etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
|Special funds|Finance||and|||||
|for foreign|Bureau of||supported,||||Related to the|
|||Subsidy||Yes|No|533,829.00||
|trade|Zichuan||gained||||income|
|development|District||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
|Clean||||||||
||Finance||and|||||
|production||||||||
||Bureau of||supported,||||Related to the|
|demonstratio||Subsidy||Yes|No|6,500,000.00||
||Zichuan||gained||||income|
|n project||||||||
||District||subsidy|||||
|award||||||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy from|||||
||||R&D|||||
||People's|||||||
|Energy-savin|||Technical||||Related to the|
||Government|Award||Yes|No|300,000.00||
|g incentive|||updating and||||income|
||of Zibo City|||||||
||||transformatio|||||
||||n, etc.|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||Subsidy from|||||
|Special funds|Office of||R&D|||||
|for project|Ministry of||Technical||||Related to the|
|||Subsidy||Yes|No|414,000.00||
|topics project|Science and||updating and||||income|
|approval|Technology||transformatio|||||
||||n, etc.|||||
||||Subsidy from|||||
|Second prize||||||||
||||R&D|||||
|of science||||||||
||||Technical||||Related to the|
|and|CTEI Office|Award||Yes|No|20,000.00||
||||updating and||||income|
|technology||||||||
||||transformatio|||||
|incentive||||||||
||||n, etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
|Service|Finance||with local|||||
|industry|Bureau||government||||Related to the|
|||Subsidy||Yes|No|600,000.00||
|development|Office of||attracting||||income|
|guide fund|Zibo||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
||||with local|||||
|Social|Career office|||||||
||||government||||Related to the|
|security|of Zichuan|Subsidy||Yes|No|1,286.82||
||||attracting||||income|
|subsidy|District|||||||
||||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy from|||||
||Finance||R&D|||||
|Special fund||||||||
||Bureau||Technical||||Related to the|
|for Patent||Subsidy||Yes|No|100,000.00||
||Office of||updating and||||income|
|Development||||||||
||Zibo||transformatio|||||
||||n, etc.|||||
|Special fund|||Subsidy from|||||
||Finance|||||||
|for energy|||R&D|||||
||Bureau of||||||Related to the|
|conservation||Subsidy|Technical|Yes|No|99,000.00||
||Zichuan||||||income|
|and|||updating and|||||
||District|||||||
|emissions|||transformatio|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|reduction|||n, etc.|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
||Finance||with local|||||
|Government|Bureau of||government|||17,228,600.0|Related to the|
|||Subsidy||Yes|No|||
|financing|Zichuan||attracting|||0|income|
||District||investment|||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||||Subsidy|||||
||Unemployme|||||||
||||gained due to|||||
||nt Insurance|||||||
||||confirming|||||
||Division of|||||||
|Subsidies of|||with local|||||
||Human|||||||
|unemployme|||government||||Related to the|
||Resources|Subsidy||Yes|No|1,200.00||
|nt dynamic|||attracting||||income|
||and Social|||||||
|monitoring|||investment|||||
||Security|||||||
||||and local|||||
||Bureau of|||||||
||||supportive|||||
||Zibo|||||||
||||policy etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
||Finance||and|||||
|Import||||||||
||Department,||supported,||||Related to the|
|discount||Subsidy||Yes|No|60,000.00||
||Commercial||gained||||income|
|interest funds||||||||
||Department||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||Finance||engaged in|||||
|Export credit||||||||
||Bureau of||special||||Related to the|
|insurance||Subsidy||Yes|No|78,322.00||
||Zichuan||industry that||||income|
|premiums||||||||
||District||the state|||||
||||encouraged|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||and|||||
||||supported,|||||
||||gained|||||
||||subsidy|||||
||||(obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||Textile|||||||
||||the state|||||
||Industry|||||||
||||encouraged|||||
||CCPIT Sub|||||||
||||and|||||
|The|of China|||||||
||||supported,||||Related to the|
|exhibition|Council for|Subsidy||Yes|No|3,209.42||
||||gained||||income|
|subsidy|the|||||||
||||subsidy|||||
||Promotion of|||||||
||||(obtaining in|||||
||International|||||||
||||line with the|||||
||Trade|||||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy from|||||
||||R&D|||||
||People's|||||||
|The Tech|||Technical||||Related to the|
||Government|Award||Yes|No|20,000.00||
|Awards|||updating and||||income|
||of Zibo City|||||||
||||transformatio|||||
||||n, etc.|||||
||||Subsidy from|||||
||||R&D|||||
||People's|||||||
|The Tech|||Technical||||Related to the|
||Government|Award||Yes|No|450,000.00||
|Awards|||updating and||||income|
||of Zichuan|||||||
||||transformatio|||||
||||n, etc.|||||
||||Subsidy from|||||
||Finance|||||||
||||R&D|||||
|Patent fund|Department||||||Related to the|
|||Subsidy|Technical|Yes|No|4,000.00||
|subsidy|Office of||||||income|
||||updating and|||||
||Shandong|||||||
||||transformatio|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||n, etc.|||||
||||Due to|||||
||||engaged in|||||
||||special|||||
||||industry that|||||
||||the state|||||
||||encouraged|||||
||||and|||||
|Import|Department|||||||
||||supported,||||Related to the|
|discount|of Finance of|Subsidy||Yes|No|147,960.00||
||||gained||||income|
|interest funds|Shandong|||||||
||||subsidy|||||
||||( obtaining in|||||
||||line with the|||||
||||law and the|||||
||||regulations of|||||
||||national|||||
||||policy)|||||
||||Subsidy|||||
||||gained due to|||||
||||confirming|||||
|Contract|Economic|||||||
||||with local|||||
|energy|and|||||||
||||government||||Related to the|
|management|Information|Award||Yes|No|2,570,000.00||
||||attracting||||income|
|financial|Commission|||||||
||||investment|||||
|reward|of Zibo|||||||
||||and local|||||
||||supportive|||||
||||policy etc.|||||
||Akesu|||||||
||||Subsidy|||||
||Prefecture|||||||
||||gained due to|||||
||Bureau of|||||||
||||confirming|||||
||Finance,|||||||
||||with local|||||
|Fiscal interest|Office of|||||||
||||government||||Related to the|
|discount|Poverty|Subsidy||Yes|No|187,500.00||
||||attracting||||income|
|funds|Alleviation|||||||
||||investment|||||
||and|||||||
||||and local|||||
||Development|||||||
||||supportive|||||
||of Akesu|||||||
||||policy etc.|||||
||Prefecture|||||||
||Human||Subsidy|||||
||Resources||gained due to|||||
|Training|||||||Related to the|
||and Social|Subsidy|confirming|Yes|No|55,200.00||
|subsidies|||||||income|
||Security||with local|||||
||Bureau of||government|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
||Akesu||attracting||||||
||Prefecture,||investment||||||
||Akesu||and local||||||
||Prefecture||supportive||||||
||Bureau of||policy etc.||||||
||Finance||||||||
||||Subsidy||||||
||The People's||||||||
||||gained due to||||||
||Government||||||||
||||confirming||||||
||of Finance||||||||
||||with local||||||
|Social|Department||||||||
||||government|||||Related to the|
|security|of the|Subsidy||Yes|No||1,431,240.02||
||||attracting|||||income|
|subsidy|Xinjiang||||||||
||||investment||||||
||Uygur||||||||
||||and local||||||
||Autonomous||||||||
||||supportive||||||
||Region||||||||
||||policy etc.||||||
||||Subsidy||||||
||||gained due to||||||
||||confirming||||||
||The County||||||||
||||with local||||||
||People's||||||||
|Production|||government||||10,655,901.4|Related to the|
||Government|Subsidy||Yes|No||||
|subsidies|||attracting||||2|income|
||Office of||||||||
||||investment||||||
||Pupi Avati||||||||
||||and local||||||
||||supportive||||||
||||policy etc.||||||
||||Subsidy||||||
|Subsidies for|||gained due to||||||
||Finance||||||||
|transferring|||confirming||||||
||Department||||||||
|Xinjiang|||with local||||||
||of the||||||||
|cotton yarn|||government|||||Related to the|
||Xinjiang|Subsidy||Yes|No||2,379,268.00||
|to|||attracting|||||income|
||Uygur||||||||
|warehouses|||investment||||||
||Autonomous||||||||
|out of|||and local||||||
||Region||||||||
|Xinjiang|||supportive||||||
||||policy etc.||||||
||||Subsidy||||||
||||gained due to||||||
|Deferred|||confirming||||||
|||||||||Related to the|
|revenue|||with local|||2,272,524.55|2,173,157.84||
|||||||||assets|
|amortization|||government||||||
||||attracting||||||
||||investment||||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
||||and local||||||
||||supportive||||||
||||policy etc.||||||
|||||||43,266,788.4|99,126,878.5||
|Total|--|--|--|--|--|||--|
|||||||3|2||

Notes:
70. Non-operating expenses
Unit: RMB Yuan
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting period|Same period of last year||
||||non-recurring gains and losses|
|Loss on disposal of non-current|5,625,603.48|6,075,803.07||
||||5,625,603.48|
|assets||||
|Including: Loss on disposal of||||
||5,625,603.48|6,075,803.07|5,625,603.48|
|fixed assets||||
|Donation|2,758,673.04|3,239,163.80|2,758,673.04|
|Other|1,784,290.98|1,051,402.66|1,784,290.98|
|Total|10,168,567.50|10,366,369.53|10,168,567.50|

 Notes:
71. Income tax expense
(1) Lists of income tax expense
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Current income tax expense|159,937,653.51|173,888,537.51|
|Deferred income tax expense|-12,031,663.36|3,709,274.80|
|Total|147,905,990.15|177,597,812.31|

 (2) Adjustment process of accounting profit and income tax expense
Unit: RMB Yuan
|||
|-|-|
|Item|Reporting period|
|Total profits|883,449,018.92|
|Current income tax expense accounted by tax and relevant||
||132,517,352.84|
|regulations||
|Influence of different tax rate suitable to subsidiary|20,121,836.02|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||
|-|-|
|Influence of income tax before adjustment|-6,573.12|
|Influence of non taxable income|-5,563,921.42|
|Influence of not deductable costs, expenses and losses|3,325,862.56|
|Influence of deductable losses of deferred income tax assets||
||-788,850.57|
|derecognized used in previous period||
|Influence of deductible temporary difference or deductible losses||
||13,140,079.84|
|of deferred income tax assets derecognized in reporting period.||
|Influence of plus deducting costs|-14,839,796.00|
|Income tax expense|147,905,990.15|

 Other notes
72. Other comprehensive income
Refer to the notes
73. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Government subsidies|72,371,505.78|86,297,819.26|
|Collection for employees|419,975.80|600,744.31|
|Claim income|2,044,561.45|1,315,960.25|
|Penalty income|53,787.00|66,215.97|
|Recovery of employee borrowings, petty|||
||14,889,234.89|9,635,053.19|
|cash and deposit|||
|Other|5,715,940.06|6,931,182.35|
|Total|95,495,004.98|104,846,975.33|

 Notes:
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Freight and miscellaneous charges|52,801,900.32|46,642,382.10|
|Rental charges and management expenses|||
||19,063,808.42|17,785,897.90|
|of the shops|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Rental charges|24,130,924.34|21,791,858.34|
|Advertising expense|8,107,292.05|16,086,754.68|
|Business travel charges|10,863,337.81|10,214,144.89|
|Premium|9,069,684.52|8,991,889.03|
|Copyright royalty|2,893,772.65|3,194,102.88|
|Audit advisory announcement fee|3,730,447.16|7,557,295.92|
|Decoration & repair expenses|1,919,818.88|1,128,402.64|
|Donation|2,758,673.04|3,239,163.80|
|Other|100,141,576.47|104,434,306.33|
|Total|235,481,235.66|241,066,198.51|

 Notes:
(3) Other cash received relevant to investment activity
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Interest income|4,458,340.84|7,556,637.78|
|Income from forward foreign exchange|37,908,044.40|27,935,884.70|
|Sale of securities|7,196,971.33||
|Income from holding of tradable financial|||
||373,901.27||
|assets during holding period|||
|Option cost|1,003,700.00||
|Total|50,940,957.84|35,492,522.48|

 Notes:
(4) Other cash paid relevant to investment activity
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Purchase of securities|117,355,791.90||
|Total|117,355,791.90||

Notes:
(5) Other cash received relevant to financing activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Borrowings from related parties||12,000,000.00|
|Return of inward bill deposits||25,814,503.00|
|Return of loan guarantees|77,262,230.00||
|Total|77,262,230.00|37,814,503.00|

 Notes:
(6) Other cash paid relevant to financing activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Return of the B-share buy-back amount|32,244,864.33||
|Cash paid back to related parties||12,000,000.00|
|Cash paid for repurchasing restricted|||
|||129,317.20|
|stocks|||
|Inward bill deposits||25,814,503.00|
|The certificates of deposit pledged|91,016,652.42|16,000,000.00|
|Power bonds payable|220,000.00||
|Total|123,481,516.75|53,943,820.20|

 Notes:
74. Supplementary information to cash flow statement
(1) Information of net profit to net cash flows generated from operating activities
Unit: RMB Yuan
||||
|-|-|-|
|Supplementary materials|Reporting period|Last period|
|1. Reconciliation of net profit to net cash|||
||--|--|
|flows generated from operating activities|||
|Net profit|735,543,028.77|979,377,181.57|
|Add: Provision for impairment of assets|27,297,445.74|12,884,824.16|
|Depreciation of fixed assets, of oil-gas|||
||355,945,695.90|303,020,522.04|
|assets, of productive biological assets|||
|Amortization of intangible assets|12,242,543.28|11,760,038.33|
|Long-term unamortized expenses|2,036,355.90|1,021,677.72|
|Losses on disposal of fixed assets, intangible|||
|assets and other long-term assets (gains:|3,501,007.84|2,906,728.27|
|negative)|||
|Losses on retirement of fixed assets|1,165,149.72|409,284.28|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Losses from variation of fair value|60,685,931.36|33,255,320.00|
|Financial cost (gains: negative)|9,610,831.22|12,286,198.63|
|Investment loss (gains: negative)|-31,540,015.51|-28,055,884.70|
|Decrease in deferred income tax assets|||
||-12,159,644.69|8,194,576.35|
|(gains: negative)|||
|Increase in deferred income tax liabilities|||
||127,981.33|-4,485,301.55|
|(“-” means decrease)|||
|Decrease in inventory (gains: negative)|4,872,209.46|-109,327,962.73|
|Decrease in accounts receivable from|||
||-103,447,655.41|48,653,571.32|
|operating activities (gains: negative)|||
|Increase in payables from operating|||
||-38,285,460.57|-159,805,424.67|
|activities (decrease: negative)|||
|Net cash flows generated from operating|1,027,595,404.34|1,112,095,349.02|
|activities|||
|2. Investing and financing activities that do|||
||--|--|
|not involving cash receipts and payment:|||
|3. Net increase in cash and cash equivalents|--|--|
|Closing balance of cash|765,695,473.65|649,393,798.30|
|Less: Opening balance of cash|649,393,798.30|869,909,505.89|
|Net increase in cash and cash equivalents|116,301,675.35|-220,515,707.59|

 (2) Net Cash paid of obtaining the subsidiary
(3) Net Cash receive of disposal of the subsidiary
(4) Cash and cash equivalents
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|765,695,473.65|649,393,798.30|
|Including: Cash on hand|2,111,348.02|1,190,565.56|
|Bank deposit on demand|742,998,281.72|631,971,943.96|
|Other monetary funds on demand|20,585,843.91|16,231,288.78|
|III. Closing balance of cash and cash|765,695,473.65|649,393,798.30|
|equivalents|||

2015 Annual Report of Lu Thai Textile Co., Ltd. 75. Note of statement of changes in the owner's equity
76. The assets with the ownership or use right restricted
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing book value|Restricted reason|
|Monetary capital|29,805,722.42|Short term loan pledged, guarantee deposit|
|Intangible assets|31,971,662.37|Short-term loan pledged|
|Total|61,777,384.79|--|

Notes:
77. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing foreign currency||Closing convert to RMB|
|Item||Exchange rate||
||balance||balance|
|Including: USD|46,035,296.59|6.4936|298,934,801.96|
|EUR|72,217.31|7.0952|512,396.26|
|HKD|50,853,805.65|0.8378|42,605,318.37|
|JPY|809,393.00|0.0539|43,626.28|
|THB|120.19|0.1799|21.62|
|SGD|91.90|4.5875|421.59|
|GBP|688.36|9.6159|6,619.21|
|AUD|2,821.03|4.7276|13,336.70|
|CHF|102.68|6.4018|657.35|
|SEK|920.00|0.7718|710.06|
|MMK|68,175,156.37|0.0050|338,198.77|
|Dong|57,910,456,996.00|0.00029|16,909,853.44|
|Including: USD|26,494,198.26|6.4936|172,042,725.85|
|HKD|31,563,908.00|0.8378|26,444,242.12|

 Notes:
(2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place, recording currency and selection basis, if there are changes into recording currency, shall also disclose the
reason.
√ Applicable□ Inapplicable
2015 Annual Report of Lu Thai Textile Co., Ltd. The operating places ofCompany’s subsidiaries Lu Thai (Hong Kong), Lu Thai (Cambodia), Lu Thai (Burma) Co., Ltd. (hereinafter referred to as “Lu Thai (Burma)”) Lu Thai (America) Co., Ltd.( Hereinafter referred to as “Lu Thai (America)”) and Lu Thai (Vietnam) Co., Ltd. were Hong Kong Cambodia, Burma, America and Vietnam, and the recording currency respectively was HKD, USD, USD, USD and Dong.
78. Arbitrage
According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and been arbitraged risk qualitative and quantitative information:
79. Other
VIII. Changes of merge scope
1. Other reasons for the changes in combination scope
Note to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information:
The Company newly set up subsidiary, Lu Thai (Vietnam) Co., Ltd.
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
||||||||
|-|-|-|-|-|-|-|
|Name of the|Main operating|Registration||Holding percentage (%)|||
||||Nature of business|||Way of gaining|
|subsidiary|place|place||Directly|Indirectly||
|Lufeng Sunshine|Beijing|Beijing|Wholesale and retail industry|100.00%||Set-up|
|Beijing Innovative|Beijing|Beijing|Wholesale and retail industry|60.00%||Set-up|
|Luthai (Hong Kong)|Hong Kong|Hong Kong|Wholesale and retail industry|100.00%||Set-up|
|Shanghai Luthai|Shanghai|Shanghai|Wholesale and retail industry|100.00%||Set-up|
|||||||Business|
|||||||combination not|
|Xinjiang Luthai|Xinjiang|Xinjiang|Manufacturing industry|59.92%|||
|||||||under the same|
|||||||control|
|Lufeng Weaving &|||||||
||Zibo|Zibo|Manufacturing industry|75.00%||Set-up|
|Dyeing|||||||
|Luqun Textile|Zibo|Zibo|Manufacturing industry|100.00%||Set-up|
|||||||Business|
|Xinsheng Power|Zibo|Zibo|Manufacturing industry|100.00%|||
|||||||combination not|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||under the same|
||||||control|
|Xinjiang Luthai||||||
|Textile|Xinjiang|Xinjiang|Manufacturing industry|100.00%|Set-up|
|(sub-subsidiary)||||||
||||||Business|
|Helijie|||||combination not|
||Zibo|Zibo|Service|100.00%||
|(sub-subsidiary)|||||under the same|
||||||control|
|Beijing Youxian|Beijing|Beijing|Wholesale and retail industry|90.00%|Set-up|
|Lu Thai (Cambodia)|Cambodia|Cambodia|Manufacturing industry|100.00%|Set-up|
|Lu Thai (Burma)|Burma|Burma|Manufacturing industry|100.00%|Set-up|
|Lu Thai (America)|America|America|Wholesale and retail industry|100.00%|Set-up|
|Lu Tha i(Vietnam)|Vietnam|Vietnam|Manufacturing industry|100.00%|Set-up|

Notes: holding proportion in subsidiary different from voting proportion:
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee:
Significant structure entities and controlling basis in the scope of combination:
Basis of determine whether the Company is the agent or the principal:
Notes:
(2) Significant not wholly owned subsidiary
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Shareholding|The profits and losses|Declaring dividends|Balance of minority|
|Name of the subsidiary|proportion of|arbitrate to the minority|distribute to minority|shareholder at closing|
||minority shareholder|shareholders|shareholder|period|
|Xinjiang Luthai|40.08%|23,787,999.23|12,023,570.79|178,922,484.77|
|Lufeng Weaving & Dyeing|25.00%|13,310,395.71||289,632,571.55|

 Holding proportion of minority shareholder in subsidiary different from voting proportion:
Notes:
(3) The main financial information of significant not wholly owned subsidiary
Unit: RMB Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Name of|Closing balance||||||Opening balance||||||
|the||Non-currentassets|||Non-curr|||Non-curr||Currentliabilities|Non-curr||
||current||Total|Current||Total|current||Total|||Total|
|subsidiar|||||ent|||ent|||ent||
||assets||assets|liabilities||liabilities|assets||assets|||liabilities|
|y|||||liability|||assets|||liability||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Xinjiang|441,261,|327,696|, 768,958,|323,538,|5,897,44|329,435,|565,642,|336,357,|902,000,|484,470,|7,358,37|491,828,|
|Luthai|937.21|846.84|784.05|224.44|7.45|671.89|462.56|886.37|348.93|159.82|2.43|532.25|
|Lufeng|||||||||||||
|Weaving|497,062,|887,529|, 1,384,59|195,671,|30,390,2|226,061,|432,310,|947,299,|1,379,60|243,251,|31,069,3|274,320,|
|&|573.74|106.38|1,680.12|138.17|55.70|393.87|138.16|541.89|9,680.05|609.13|67.50|976.63|
|Dyeing|||||||||||||

Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Reporting period||||Same period of last year||||
|Name of|||||||||
||||Total||||Total||
|the|Operationrevenue|||Operating|Operation|||Operating|
|||Net profit|comprehensi|||Net profit|comprehensi||
|subsidiary||||cash flow|revenue|||cash flow|
||||ve income||||ve income||
|Xinjiang||59,351,295.4|59,351,295.4|159,852,668.|676,265,353.|46,264,010.2|46,264,010.2|-11,120,727.0|
||569,106,231.16||||||||
|Luthai||8|8|02|51|3|3|5|
|Lufeng|||||||||
||1,450,422,625.91|53,241,582.8|53,241,582.8|24,216,809.3|1,377,696,78|46,206,513.0|46,206,513.0|41,980,782.2|
|Weaving|||||||||
|||3|3|2|1.89|6|6|8|
|& Dyeing|||||||||

X. The risk related financial instruments
Main financial instruments of the Company included: Loans, accounts receivable, accounts payable, etc., all the details of the financial instruments, see related projects of “Section VII”. The risk associated with these financial instruments, as well as theCompany’s risk management policy to reduce these risks which were described below. The Company's management managed and supervised these risks to ensure that the above risk was controlled in a limited scope.
The Company use sensitivity analysis technology to analyze the reasonable of risk variables, influence of probable changes to the current profits and Stockholders' equity. Because rarely any risk variables change in isolation, and the correlation between variables for the eventual impact of the change of a risk variables will have a significant effect, thus, the aforesaid content was processing under the assumption of the change of each variable was conducted independently. Risk management objectives and policies
The goals of Company engaged in the risk management is to achieve the proper balance between the risks and benefits, reduced the negative impact to the Company operating performance risk to a minimum, maximized the profits of shareholders and other equity investors. Based on the risk management goal, the basic strategy of the Company's risk management is determine and analyze the various risks faced by the Company, set up the bottom line of risk and conducted appropriate risk management, and timely supervised various risks in a reliable way and controlled the risk within the range of limit.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate.
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate. The
Company’s foreign exchange risk was mainly related to USD, HKD and EUR, excepting the
2015 Annual Report of Lu Thai Textile Co., Ltd.Company’s several subsidiaries purchase and sale, in USD, HKD and Dong, the other main business settled by RMB. On 31 Dec. 2015, in addition to the following assets or liabilities in statement was USD, HKD and EUR, theCompany’s assets or liabilities was RMB balance. The foreign exchange risk incurred by assets and liabilities of foreign balance may have impact to the operation results of the Company.
|||
|-|-|
|Item|Closing amount|
|Cash and cash equivalents|359,365,961.61|
|Notes receivable|101,533,594.19|
|Account receivable|198,486,967.97|
|Other accounts receivable|21,499,240.95|
|Accounts payable|20,029,203.14|
|Other account payable|3,773,841.47|
|Short-term loans|572,766,318.90|
|Long-term loans due within 1 year||
|Long-term borrowings||

Sensitive analysis of foreign exchange risk:
Base on the foreign currency monetary assets and liabilities, and ignoring other factors, influence of change of exchange rate to current profits and losses and equity of shareholders was followed:
|||||
|-|-|-|-|
|Change|Reporting period|||
||Influence to theprofits|Influence to equity ofshareholders|Influence to theprofits|
|Up 10% against RMB|-6,138,055.73|-6,138,055.73|-22,822,257.83|
|Down 10% againstRMB|6,138,055.73|6,138,055.73|22,822,257.83|

(2) Interest rate risk
The risk of cash flow changes of financial instruments due to change of interest rate mainly was related bank loan (for details, see Section VII).
Sensitive analysis of interest rate risk:
Influence of interest increasing 100 BP to current profits and losses and equity of shareholders before tax was followed:
|||||
|-|-|-|-|
|Change|Reporting period|||
||Influence to theprofits|Influence to equityof shareholders|Influence to theprofits|
|Increase 100 BP|-7,394,269.19|-6,682,600.60|-4,640,123.66|
|Decrease 100 BP|7,394,269.19|6,682,600.60|4,640,123.66|

 (3) Other price risk
The categories held by the Company are the investment of tradable financial assets measured by fair value on assets liabilities date. Thus, the Company bares the risk of change in securities market. 2 Credit risk,
On 31 Dec. 2015, credit risk what may lead to the financial losses was the other party of the
contract failed to fulfill the obligations and causes loss of theCompany’s financial assets, which
including: book value of financial assets recognized in consolidated balance sheet.
2015 Annual Report of Lu Thai Textile Co., Ltd. In order to reduce the credit risk, the Company established a special team be responsible for the determination of credit limit to conduct credit approval, and perform other supervising procedures to ensure that taking necessary measures to recycle expired claims. In addition, the Company at each balance sheet date, review every single receivables recycling situation, to ensure that the money unable to recycle withdrawn provision for bad debt fully. Thus, the Company management believed that have assume the credit risk the Company shouldered had been greatly reduced. The company's working capital was in bank with higher credit rating, so credit risk of working capital was low.
3. Liquidity Risk
When manage liquidity risk, the Company keep administrators deemed sufficient cash and cash equivalents and supervised it to meet the need of the operation of the Company and reduce the influence of cash flow volatility. The Company management supervised the usage of bank loan and ensured to comply with the loan agreement.
In the end of reporting period, the Company held cash and bank deposit of RMB796 million. In recent two years, the average of net cash flow of operation activities was RMB1.070 billion. The Company believed that the liquidity risk was insignificant.
XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing fair value||||
|Item|Fair value measurement|Fair value measurement|Fair value measurement||
|||||Total|
||items at level 1|items at level 2|items at level 3||
|I. Consistent fair value|||||
||--|--|--|--|
|measurement|||||
|(I) Financial assets|||||
|calculated by fair value|||||
||71,696,678.70|||71,696,678.70|
|and changes record into|||||
|current profits or losses|||||
|1. Trading financial assets|71,696,678.70|||71,696,678.70|
|(2) Equity tool investment|71,696,678.70|||71,696,678.70|
|Total assets of consistent|||||
||71,696,678.70|||71,696,678.70|
|fair value measurement|||||
|(V) Tradable financial|||||
||46,695,875.00|||46,695,875.00|
|liabilities|||||
|Financial Derivative|||||
||46,695,875.00|||46,695,875.00|
|liabilities|||||
|II. Inconsistent fair value|--|--|--|--|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||
|-|
|measurement|

2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1 The Company recognized in according to the closing price of stock on 31 Dec. 2015 and in line with the forward settlement of exchange offer of the bank fair value measurement items at level 1. 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2
4. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 3
5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3
6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels
7. Changes in the valuation technique in the current period and the reason for change
8. Fair value of financial assets and liabilities not measured at fair value
9. Other
XII. Related party and related Transaction
1. Information related to parent company of the Company
|||||||
|-|-|-|-|-|-|
||||||Proportion of voting|
|||||Proportion of share||
||||||rights owned by|
|Name of parent||||held by parent||
||Registration place|Nature of business|Registered capital||parent company|
|company||||company against the||
||||||against the Company|
|||||Company (%)||
||||||(%)|
|Zibo Lucheng||Textile, electrical||||
|Textile Investment|Zibo|power and|63,260,000|14.69%|14.69%|
|Co., Ltd.||investment||||

Notes: Information on the parent company:
The finial control of the Company was Mr. Liu Shizhen
Notes:
2015 Annual Report of Lu Thai Textile Co., Ltd. 2. Subsidiaries of the Company
See details to Notes IX. 1. Equity in subsidiary.
3. Information on the joint ventures and associated enterprises of the Company
The details of significant joint venture and associated enterprise of the Company
Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reporting period, or form balance due to related party transactions in previous period:
|||
|-|-|
|Name|Relationship|

Other notes
4. Information on other related parties of the Company
|||
|-|-|
|Name|Relationship|
|Zibo Stanluian Cosmetics Co., Ltd. (hereinafter called|Affiliated person (the same chairman of the Board with the|
|“Stanluian”)|Company)|
|Zibo Taimei Ties Co., Ltd. (hereinafter called Taimei Ties)|Controlled subsidiary of the parent company|
|Zibo Limin Purified Water Co., Ltd. (hereinafter called Limin||
||Wholly-owned subsidiary of the parent company|
|Purified Water)||
|Zibo Luqun Land Co., Ltd (hereinafter called Luqun Land)|Wholly-owned subsidiary of the parent company|
|Chengshun Heating|Controlled subsidiary of the parent company|
|Zibo Limin Walling Material Co., Ltd. (hereinafter referred to as|Controlled subsidiary of the wholly-owned subsidiary of the|
|Limin Walling)|Company|
|Zibo Lurui Fine Chemical Co., Ltd. (hereinafter referred to as||
||Controlled subsidiary of the parent company|
|Lurui Chemical)||
|Zibo Lujia Property Management Co. , Ltd. (hereinafter referred||
||Wholly-owned subsidiary of the parent company|
|to as Lujia Property)||

Other notes
5. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||The approval trade|Whether exceed trade|Same period of last|
|Related-party|Content|Reporting period||||
||||credit|credit or not|year|
|Zibo Lucheng|Towel, sock, oil|||||
|||10,664,706.25|15,000,000.00|No|9,008,950.91|
|Textile Investment|product,|||||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Co., Ltd.|supermarket retail,|||||
||welfare, electronic|||||
||products, computer|||||
||equipment,|||||
||computer supplies,|||||
||paper core, hose|||||
||processing fees,|||||
||etc.|||||
||Gift box for|||||
||cosmetic, lotion,|||||
|Stanluian Company||166,565.07|||152,497.47|
||washing-up liquid,|||||
||Liquid soap, etc.|||||
||Goods processing|||||
|Taimei Ties||989,608.31|||1,023,260.31|
||fee|||||
|Limin Purified|Sewage treatment,|||||
|||9,152,198.70|14,423,200.00|No|9,105,162.48|
|Water|materials|||||
|Limin Walling|Building materials||||224,266.67|
|Lurui Fine||||||
||Equipment||||29,059.83|
|Chemical||||||
|Lurui Fine||||||
||Auxiliaries|71,967,937.29|80,000,000.00|No|43,683,120.01|
|Chemical||||||

Information of sales of goods and provision of labor service
Unit: RMB Yuan
|||||
|-|-|-|-|
|Related-party|Content|Reporting period|Same period of last year|
||Sales of materials, electricity,|||
|Zibo Lucheng Textile||||
||running water, steam and|215,167.98|206,738.98|
|Investment Co., Ltd.||||
||LED lamp|||
|Zibo Lucheng Textile|Sales of dyed yarn, fabric and|||
|||686,963.97|655,798.17|
|Investment Co., Ltd.|garments|||
||Sales of electricity, heating|||
|Taimei Ties||19,820.34|20,787.92|
||charges, garment etc.|||
||Sales of materials, electricity,|||
|Stanluian Company|running water, heating|35,778.98|55,253.10|
||charges, and LED lamp|||
||Sales of materials, garment,|||
|Limin Purified Water||29,816.47|38,154.29|
||and LED lamp|||
||Sales of garments, equipment,|||
|Lurui Fine Chemical|LED lamp, fabric, auxiliaries|967,389.83|123,141.44|
||and lunch components|||
|Chengshun Heating|Sales of materials, power, hot|5,129,186.09|4,186,147.42|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||
|-|-|-|-|
||water, running water, Low|||
||temperature hot water, pipe|||
||flushing fee and garment|||
||Sales of materials and|||
|Lujia Property||92,734.28|42,055.19|
||recycled water|||

Notes:
(2) Related trusteeship/contract
Lists of related trusteeship/contract:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the|Name of the|||||Income|
|entruster/contract|entrustee/|Type|Initial date|Due date|Pricing basis|recognized in the|
|ee|contractor|||||reporting period|

 Notes:
Lists of entrust/contractee
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the|Name of the|||||Charge|
|entruster/contract|entrustee/|Type|Initial date|Due date|Pricing basis|recognized in the|
|ee|contractor|||||reporting period|

 Notes:
(3) Information of related lease
The Company was lessor:
Unit: RMB Yuan
|||||
|-|-|-|-|
|||The lease income confirmed in|The lease income confirmed in|
|Name of lessee|Category of leased assets|||
|||this year|last year|
|Zibo Lucheng Textile||||
||Houses and buildings|390,400.00|390,400.00|
|Investment Co., Ltd.||||
|Chengshun Heating|Houses and buildings||1,350.00|

 The Company was lessee:
Unit: RMB Yuan
|||||
|-|-|-|-|
|||The lease income confirmed in||
|lessor|Category of leased assets||Category of leased assets|
|||this year||
|Zibo Lucheng Textile||||
||Rent of land|3,995,600.00|3,995,600.00|
|Investment Co., Ltd.||||
|Zibo Lucheng Textile||||
||Rent of gas station|526,800.00|526,800.00|
|Investment Co., Ltd.||||
|Zibo Lucheng Textile|Rent of land and buildings|8,197,200.00|8,197,200.00|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||
|-|-|-|-|
|Investment Co., Ltd.||||
|Luqun Property|Rent of land and buildings|1,802,400.00|1,802,400.00|
|Zibo Lucheng Textile||||
||Rent of houses|4,417,200.00|4,417,200.00|
|Investment Co., Ltd.||||

Notes:
(4) Related-party guarantee
The Company was guarantor:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|Secured party|Guarantee amount|Start date|End date||
|||||or not|

The Company was Secured party
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|Guarantor:|Guarantee amount|Start date|End date||
|||||or not|

Notes:
(5) Inter-bank lending of capital of relatedparties：
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Amount borrowed and||||
|Related-party||Initial date|Due date|Explanation|
||loaned||||
|Borrowed|||||
|Loaned|||||

(6) Related party asset transfer and debt restructuring
Unit: RMB Yuan
|||||
|-|-|-|-|
|Related-party|Content|Reporting period|Same period of last year|
|Luqun Property|Houses and buildings||31,416,086.66|

 (7) Rewards for the key management personnel
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Rewards for the key management|||
||22,455,700.00|22,502,000.00|
|personnel|||

2015 Annual Report of Lu Thai Textile Co., Ltd. (8) Other related-party transactions
6. Receivables and payables of related parties
(1) Receivables
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Name o f item|Related-party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|

 (2) Payables
Unit: RMB Yuan
|||||
|-|-|-|-|
|Name o f item|Related-party|Closing book balance|Opening book balance|
||Zibo Lucheng Textile|||
|Accounts payable||131,696.00|391,531.00|
||Investment Co., Ltd|||
|Accounts payable|Taimei Ties||100,485.00|

 7. Related party commitment
8. Other
XIII. Commitments and contingency
1. Significant commitments
Significant commitments at balance sheet date
Capital commitments
|||
|-|-|
|Item|Closing balance (RMB Tenthousand Yuan)|
|Commitments signed but hasn’t been recognizedin financial statements||
|-- Commitment for constructing and purchasinglong-term assets|5,524.91|
|Total|5,524.91|

 2. Contingency
(1) Significant contingency at balance sheet date
As of 31 Dec. 2015, there was no significant contingency to be disclosed.
2015 Annual Report of Lu Thai Textile Co., Ltd. (2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
3. Other
XIV. Events after balance sheet date
1. Significant events had not adjusted
Unit: RMB Yuan
|||||
|-|-|-|-|
|||Influence number to the||
||||Reason of unable to estimate|
|Item|Content|financial position and operating||
||||influence number|
|||results||

2. Profit distribution
Unit: RMB Yuan
|||
|-|-|
|Profits or dividends planned for distribution|477,203,948.00|
|Profits or dividends declared for distribution upon review and||
||477,203,948.00|
|approval||

3. Sales return
4. Notes of other significant events
XV. Other significant events
1. Other important transactions and events have an impact oninvestors’ decision-making
XVI. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Category|||||||
||Book balance|Bad debt provision|Book|Book balance|Bad debt provision|Book value|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||Withdra|value||||||
|||Proportio||walproportion|||Proportio||Withdrawal||
||Amount||Amount|||Amount||Amount|||
|||n|||||n||proportion||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|120,361,083.64||72,592,9||47,768,13||||||
|||37.90%||60.31%|||||||
|which bad debt|||47.77||5.87||||||
|provision separately|||||||||||
|accrued|||||||||||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
||197,230,287.58||9,869,96||187,360,3|348,586||26,689,90||321,897,07|
|debt provision of by||62.10%||5.00%|||100.00%||7.66%||
||||9.51||18.07|,979.40||4.79||4.61|
|credit risks|||||||||||
|characteristics:|||||||||||
||317,591,371.22||82,462,9||235,128,453.94|348,586||26,689,90||321,897,074.61|
|Total||100.00%||25.97%|||100.00%||7.66%||
||||17.28|||,979.40||4.79|||

 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Accounts receivable|Closing balance||||
|(entity)|Account receivable|Bad debt provision|Withdrawal proportion|Withdrawal reason|
|||||Due to the losses of the|
|||||Company’s subsidiary|
|Beijing Innovative|120,361,083.64|72,592,947.77|60.31%|Beijing Innovative, the|
|||||amount of net asset was|
|||||negative.|
|Total|120,361,083.64|72,592,947.77|--|--|

In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Inapplicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Account receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|197,061,184.98|9,853,059.25|5.00%|
|Subtotal of within 1 year|197,061,184.98|9,853,059.25|5.00%|
|1 to 2 years|169,102.60|16,910.26|10.00%|
|Total|197,230,287.58|9,869,969.51|5.00%|

Notes:
2015 Annual Report of Lu Thai Textile Co., Ltd. In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the reporting period was of RMB55, 773,012.49; the amount of the reversed or collected part during the reporting period was of RMB000.
Significant amount of reversed or recovered bad debt provision:
Unit: RMB Yuan
||||
|-|-|-|
|Name of the entity|Amount|Method|

(3) Particulars of the actual verification of accounts receivable during the reporting period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of accounts receivable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes:
(4) Top five of account receivable of closing balance collected by arrears party
The total amount of top five of account receivable of closing balance collected by arrears party was RMB193, 100,382.40,60.80% of total closing balance of account receivable, the relevant closing balance of bad debt provision withdrawn was RMB76, 229,912.71.
(5) Derecogniziton of account receivable due to the transfer of financial assets
(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable
Notes:
2. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provisionWithdrawalAmountproportion|||Book balance||Bad debt provision|||
||Amount||||||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book value|
||||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Other accounts|36,565,379.68|||8.27%|||||||
|receivable withdrawn|||||||||||
||||3,024,83||33,540,54|30,826,||2,777,139||28,049,517.|
|bad debt provision||100.00%|||||100.00%||9.01%||
||||9.14||0.54|657.21||.42||79|
|according to credit|||||||||||
|risks characteristics|||||||||||
||36,565,379.68||3,024,83|8.27%|33,540,540.54|30,826,||2,777,139||28,049,517.79|
|Total||100.00%|||||100.00%||9.01%||
||||9.14|||657.21||.42|||

 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Inapplicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|31,038,917.83|1,551,945.89|5.00%|
|Subtotal of within 1 year|31,038,917.83|1,551,945.89|5.00%|
|1 to 2 years|831,732.53|83,173.25|10.00%|
|2 to 3 years|186,987.98|37,397.60|20.00%|
|Over 3 years|4,507,741.34|1,352,322.40|30.00%|
|Total|36,565,379.68|3,024,839.14|8.27%|

 Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Inapplicable
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The withdrawal amount of the bad debt provision during the reporting period was of RMB247,699.72; the amount of the reversed or
collected part during the reporting period was of RMB000.
Of which the significant amount of the reversed or collected part during the reporting period:
Unit: RMB Yuan
2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Name of the entity|Reversed or collected amount|Method|

(3) Particulars of the actual verification of other accounts receivable during the reporting period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of other accounts receivable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes of write-off other accounts receivable:
(4) Other account receivable classified by account nature
Unit: RMB Yuan
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Intercourse funds|4,175,136.88|2,861,317.03|
|Export rebates|16,073,852.13|8,218,844.96|
|Payment on behalf|11,217,554.27|13,311,113.23|
|The deposit and guarantee|2,427,649.51|2,191,658.50|
|Borrowings and deposit|757,574.35|2,121,376.44|
|Other|1,913,612.54|2,122,347.05|
|Total|36,565,379.68|30,826,657.21|

 (5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Closing balance of|
|Name of the entity|Nature|Closing balance|Aging|Proportion%||
||||||bad debt provision|
|Refund of tax for||||||
||Export rebates|16,073,852.13|Within 1 year|43.96%|803,692.61|
|export receivable||||||
|Accounts receivable||||||
||Advance money for|||||
|of advance money for||||||
||the social security|||||
|the social security||||||
||undertake by the|6,053,141.26|Within 1 year|16.55%|302,657.06|
|undertake by the||||||
||individual of the|||||
|individual of the||||||
||employee|||||
|employee||||||
|Lu Thai (Cambodia)|Intercourse funds|4,097,305.95|Within 1 year|11.21%|204,865.30|

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Deposits for wages|Deposits for wages|||||
|paid to migrant|paid to migrant|||||
|||1,458,593.50|Over 3 years|3.99%|437,578.05|
|workers of Zichuan|workers of|||||
|District, Zibo city|infrastructure works|||||
|Alipay (China)|||Within 1|||
||The cash pledge and|||||
|Network Technology||471,537.88|year ,1-2years, 2-3|1.29%|51,265.09|
||guarantee|||||
|Co., Ltd.|||years|||
|Total|--|28,154,430.72|--|77.00%|1,800,058.11|

 (6) Account receivable involving government subsidies
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Project of government|||Estimated recovering|
|Name of the entity||Closing balance|Closing aging||
||subsidies|||time, amount and basis|

 (7) Other account receivable derecognized due to the transfer of financial assets
(8) Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement
Notes:
3. Long-term equity investment
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Investment to thesubsidiary|||||||
||1,613,379,740.04|35,675,000.00|1,577,704,740.04|1,170,861,572.56||1,170,861,572.56|
|Total|1,613,379,740.04|35,675,000.00|1,577,704,740.04|1,170,861,572.56||1,170,861,572.56|

 (1) Investment to the subsidiary
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
|||||||Closing balance|
||||||impairment||
|Investee|Opening balance|Increase|Decrease|Closing balance||of impairment|
||||||provision in the||
|||||||provision|
||||||reporting period||
|Beijing Innovative|25,200,000.00|||25,200,000.00|25,200,000.00|25,200,000.00|
|Xinjiang Luthai|147,303,034.16|||147,303,034.16|||

2015 Annual Report of Lu Thai Textile Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Xinsheng Power|176,340,737.93||176,340,737.93|||
|Lufeng Weaving &||||||
||529,620,000.00||529,620,000.00|||
|Dyeing||||||
|Luqun Textile|171,784,550.00||171,784,550.00|||
|Luthai (Hong||||||
||6,366,600.00|122,405,200.00|128,771,800.00|||
|Kong)||||||
|Lufeng Sunshine|15,000,000.00||15,000,000.00|10,475,000.00|10,475,000.00|
|Shanghai Luthai|20,000,000.00||20,000,000.00|||
|Lu Thai||||||
||70,585,030.47|37,638,933.91|108,223,964.38|||
|(Cambodia)||||||
|Lu Thai (America)|3,670,380.00|3,103,920.00|6,774,300.00|||
|Lu Thai(Burma)|491,240.00|61,836,513.57|62,327,753.57|||
|Beijing Youxian|4,500,000.00|4,500,000.00|9,000,000.00|||
|Lu Thai (Vietnam)||213,033,600.00|213,033,600.00|||
|Total|1,170,861,572.56|442,518,167.48|1,613,379,740.04|35,675,000.00|35,675,000.00|

 (2) Investment to joint ventures and associated enterprises
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease in reporting period||||||||||
|||||Investme|||||||Closing|
||||||Adjustme|||||||
|||||nt profit||||Withdraw|||balance|
|||Additiona|||nt of||Declarati|||||
||Opening||Negative|and loss||Other||n||Closing|of|
|Investee||||||||||||
|||l|||other||on of cash|||||
||balance||investmen|recognize||equity||impairme|Other|balance|impairme|
|||investmen|||comprehe||dividends|||||
||||t|d under||changes||nt|||nt|
|||t|||nsive||or profits|||||
|||||the equity||||provision|||provision|
||||||income|||||||
|||||method||||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||

(3) Other notes
4. Revenues and operating costs
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Reporting period||Same period of last year||
|Item|||||
||Revenue|Operating costs|Revenue|Operating costs|
|Main operations|4,760,669,805.94|3,504,388,812.66|4,567,509,952.85|3,214,341,389.02|

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||||
|-|-|-|-|-|
|Other operations|183,360,368.55|144,071,749.25|157,011,104.51|114,158,449.22|
|Total|4,944,030,174.49|3,648,460,561.91|4,724,521,057.36|3,328,499,838.24|

 Notes:
5. Investment income
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Long-term equity investment income|||
||217,976,429.21|59,921,434.43|
|accounted by cost method|||
|Investment income received from disposal of|||
|financial assets measured by fair value and|||
||33,986,744.40|24,355,244.66|
|the changes be included in the current profits|||
|and losses during holding period|||
|Total|251,963,173.61|84,276,679.09|

 6. Other
XVII. Supplementary materials
1. Items and amounts of extraordinary gains and losses
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current|||
||-4,666,157.56||
|assets|||
|Tax rebates, reductions or exemptions due to|||
|approval beyond authority or the lack of|43,266,788.43||
|official approval documents|||
|Gain/loss from change of fair value of|||
|transactional assets and liabilities, and|||
|investment gains from disposal of|||
|transactional financial assets and liabilities|-29,145,915.85||
|and available-for-sale financial assets, other|||
|than valid hedging related to the Company’s|||
|common businesses|||
|Other non-operating income and expenses|||
||3,432,535.47||
|other than the above|||
|Less: Income tax effects|12,302,309.25||

2015 Annual Report of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Minority interests effects|6,654,823.94||
|Total|-6,069,882.70|--|

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 thePublic—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
2. Return on equity (ROE) and earnings per share (EPS)
|||||
|-|-|-|-|
|||EPS（Yuan/share）||
|Profit as of reporting period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common||0.750|0.750|
||10.66%|||
|shareholders of the Company||||
|Net profit attributable to common||||
|shareholders of the Company after||||
||10.76%|0.75|0.75|
|deduction of non-recurring profit||||
|and loss||||

3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Net profit||Net asset||
||Reporting period|Same period of last year|Closing balance|Opening balance|
|According to Chinese|712,193,243.19|958,725,402.84|6,837,113,075.58|6,588,772,245.55|
|accounting standards|||||
|Items and amounts adjusted according to international accounting standards|||||
|Impact on domestic|||||
|equipments tax credit|||||
|recognized as deferred|||||
||1,015,000.00|1,225,000.00|-1,054,000.00|-2,069,000.00|
|income under|||||
|international accounting|||||
|standards|||||
|According to international|||||
||713,208,243.19|959,950,402.84|6,836,059,075.58|6,586,703,245.55|
|accounting standards|||||

2015 Annual Report of Lu Thai Textile Co., Ltd. (2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
□ Applicable√ Inapplicable
(3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreign institutions
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.
4. Other
2015 Annual Report of Lu Thai Textile Co., Ltd. Section XI. Documents Available for Reference
1. Accounting statement signed by legal representative, responsible person in charge of accounting work and responsible person of accounting department;
2. The original ofAuditors’ Report carried with the seal of the accounting firm, as well as the personal signatures of certified public accountants.
3. The originals of all documents and manuscripts of Public Notices of the Company disclosed publicly on Securities Times, Shanghai Securities News and Ta Kung Pao.
Board Chairman: Liu Zibin
Lu Thai Textile Co., Ltd.
30 Mar. 2016