Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd. Stock code: 000726, 200726 Stock name: Lu Thai A, Lu Thai B Announcement No.: 2016-019 Lu Thai Textile Co., Ltd.
Abstract of the Report for the First Quarter of 2016
Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd. Section I Important Statements
The Board of Directors, the Supervisory Committee, directors, supervisors and senior management staff of Lu Thai Textile Co., Ltd. (hereinafter referred to as “the Company”) warrant that the information carried in this report is factual, accurate and complete, without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that.
All directors have attended the board session for reviewing this report.
Liu Zibin, company principal, Zhang Hongmei, chief of the accounting work, and Zhang Keming, chief of the accounting organ (chief of accounting), hereby confirm that the financial statements enclosed in this report are factual, accurate and complete.
This Report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd. Section II Financial Results and Changes in Shareholders
I Financial results
Whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting policies or correction of accounting errors
□ Yes√ No
|||||
|-|-|-|-|
|||January-March||
||January-March 2016||+/-%|
|||2015||
|Operating revenues (RMB)|1,282,806,624.05|1,428,557,406.74|-10.20%|
|Net profit attributable to shareholders of the Company|150,268,522.21|152,714,080.35||
||||-1.60%|
|(RMB)||||
|Net profit attributable to shareholders of the Company after|137,542,633.98|131,929,166.88|4.25%|
|deducting exceptional profit and loss (RMB)||||
|Net operating cash flow (RMB)|183,258,282.60|-97,329,127.52|-288.29%|
|Basic earnings per share (RMB/share)|0.16|0.16|0.00%|
|Diluted earnings per share (RMB/share)|0.16|0.16|0.00%|
|Weighted average return on equity|2.15%|2.29%|-0.14%|
||31 March 2016|31 December 2015|+/-%|
|Total assets (RMB)|9,059,317,160.04|9,091,170,499.22|-0.35%|
|Net assets attributable to shareholders of the Company|6,865,658,300.17|6,837,113,075.58||
||||0.42%|
|(RMB)||||

Exceptional profit and loss
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|January-March 2016|Note|
|Profit/loss on disposal of non-current assets (including offset amount of asset impairment|||
||-119,596.26||
|provisions)|||
|Government grants charged to the profit/loss for the Reporting Period (except for the|||
|government grants closely related to the business of the Company and given at a fixed quota|4,596,057.87||
|or amount in accordance with the State’s uniform standards)|||
|Gains and losses on change in fair value from tradable financial assets and tradable financial|||
|liabilities, as well as investment income from disposal of tradable financial assets and|||
||4,700,743.33||
|tradable financial liabilities and financial assets available for sales, except for effective|||
|hedging related with normal businesses of the Company|||
|Non-operating incomes and expenses other than the above|2,954,115.86||
|Less: Income tax effects|-1,211,324.23||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
||||
|-|-|-|
|Minority interests effects (after tax)|616,756.80||
|Total|12,725,888.23|--|

 Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Profit and Loss, or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss□ Applicable√ Not applicable
No such cases in the Reporting Period.
II Total number of shareholders at the period-end and shareholdings of top ten shareholders 1. Numbers of common shareholders and preference shareholders with resumed voting rights as well as shareholdings of top ten shareholders
Unit: share
||||||||||
|-|-|-|-|-|-|-|-|-|
|Total number of common||||Total number of preference shareholders with|||||
||69,043|||||||0|
|shareholders at the period-end||||resumed voting rights at the period-end (if any)|||||
|Shareholdings of top ten shareholders|||||||||
||||||||Pledged or frozen||
||||Shareholdi||||||
|||||||Number of|shares||
|||Nature of|ng||Number of||||
|Name of shareholder||||||restricted shares||Numbe|
|||shareholder|percentage||shares held||Status of||
|||||||held||r of|
||||(%)||||shares||
|||||||||shares|
|Zibo Lucheng Textile Investment Co., Ltd.||Domesticnon-state-ownedcorporation|14.69%||140,353,583||||
|Tailun Textile Co., Ltd.||Foreigncorporation|12.37%||118,232,400|118,232,400|||
|Central Huijin Investment Co., Ltd.||State-ownedcorporation|2.13%||20,315,300||||
|T.ROWE PRICE INTL DISCOVERY FUND||Foreigncorporation|2.09%||19,948,219||||
|CHINA SECURITIES FINANCECORPORATION LIMITED||State-ownedcorporation|1.64%||15,679,091||||
|LYNAS ASIA FUND||Foreigncorporation|1.51%||14,413,375||||
|FIRST STATE INVESTMENTSICVC-FIRST STATE GREATER CHINAGROWTH FUND||Foreigncorporation|1.12%||10,714,368||||
|HUA AN NEW SILK ROAD THEMEEQUITY SECURITIES INVESTMENT||Domesticnon-state-owned|1.06%||10,110,000||||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|FUND|corporation||||||
|VALUE PARTNERS CLASSIC FUND|Foreigncorporation||0.85%|8,156,383|||
|First State China A Share Fund|Foreigncorporation||0.82%|7,881,381|||
|Shareholdings of top ten non-restricted shareholders|||||||
|||Number of non-restricted|||Variety of shares||
|Name of shareholder|||||||
|||shares held|||Variety|Number|
|Zibo Lucheng Textile Investment Co., Ltd.||140,353,583|||RMB common||
|||||||140,353,583|
||||||shares||
|Central Huijin Investment Co., Ltd.||20,315,300|||RMB common||
|||||||20,315,300|
||||||shares||
|T.ROWE PRICE INTL DISCOVERY FUND||19,948,219|||Domestically||
||||||listed foreign|19,948,219|
||||||shares||
|CHINA SECURITIES FINANCE CORPORATION LIMITED||15,679,091|||RMB common||
|||||||15,679,091|
||||||shares||
|LYNAS ASIA FUND||14,413,375|||Domestically||
||||||listed foreign|14,413,375|
||||||shares||
|FIRST STATE INVESTMENTS ICVC-FIRST STATEGREATER CHINA GROWTH FUND||10,714,368|||Domestically||
||||||listed foreign|10,714,368|
||||||shares||
|HUA AN NEW SILK ROAD THEME EQUITY SECURITIESINVESTMENT FUND||10,110,000|||RMB common||
|||||||10,110,000|
||||||shares||
|VALUE PARTNERS CLASSIC FUND||8,156,383|||Domestically||
||||||listed foreign|8,156,383|
||||||shares||
|First State China A Share Fund||7,881,381|||RMB common||
|||||||7,881,381|
||||||shares||
|HTHK-MANULIFE CHINA VALUE FUND||6,858,138|||Domestically||
||||||listed foreign|6,858,138|
||||||shares||
|||Zibo Lucheng Textile Investment Co., Ltd. is the largest|||||
|||shareholder of the Company and the actual controller. Tailun|||||
|||(Thailand) Textile Co., Ltd. is the second largest shareholder as|||||
|Related or acting-in-concert parties among the above|||||||
|||well as sponsor of foreign capital of the Company. All of other|||||
|shareholders|||||||
|||shareholders are people holding circulating A share or circulating|||||
|||B share and the Company is not able to confirm whether there is|||||
|||associated relationship or concerted action among other|||||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
|||
|-|-|
||shareholders.|
|Top ten common shareholders conducting securities margin||
||N/A|
|trading (if any)||

Did any of the top ten common shareholders or the top ten non-restricted common shareholders of the Company conduct any promissory repo during the Reporting Period?
□ Yea√ No
No such cases in the Reporting Period.
2. Total number of preference shareholders and shareholdings of the top ten of them
□ Applicable√ Not applicable
Section III Significant Events
I Changes in major accounting statement items and financial indicators for the Reporting Period, as well as reasons for such changes
√ Applicable□ Not applicable
(1) Notes receivable stood at RMB87,564,218.01 on 31 March 2016, down34.23% from the opening amount, mainly because letters of credit became due.
(2) Interest receivable stood at RMB0.00 on 31 March 2016, down100.00% from the opening amount, mainly because savings became due and interest was collected.
(3) Other accounts receivable stood at RMB44,055,162.39 on 31 March 2016, down37.79% from the opening amount, mainly because export rebates were received.
(4) Engineering materials stood at RMB19,909,444.99 on 31 March 2016, up215.03% from the opening amount, mainly because equipment to be installed increased.
(5) Other non-current assets stood at RMB47,372,488.77 on 31 March 2016, up37.30% from the opening amount, mainly because prepayments for equipment increased.
(6) Financial liabilities measured at fair value with fair value changes charged to the current profit and loss stood at RMB19,928,030.00 on 31 March 2016, down57.32% from the opening amount, mainly because financial liabilities became due and loss on the fair value changes decreased. (7) Payroll payable stood at RMB181,404,630.78 on 31 March 2016, down37.72% from the opening amount, mainly because the year-end bonuses for employees for 2015 were paid in the current period.
(8) Interest payable stood at RMB988,920.36 on 31 March 2016, down46.60% from the opening amount, mainly because interest payable decreased.
(9) Treasury shares stood at RMB131,096,061.14 on 31 March 2016, up1029.09% from the opening amount, mainly because repurchased shares increased.
(10) Asset impairment loss stood at RMB-870,101.65 for January-March 2016, down175.08%
from the same period of last year, mainly because accounts receivable decreased.
(11) Profit on fair value changes stood at RMB21,750,839.63 for January-March 2016, up281.23%
from the same period of last year, mainly because of the profit on fair value changes in due
Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd. financial liabilities and the fair value changes in the current period.
(12) Investment profit stood at RMB-17,050,096.30 for January-March 2016, down225.14% from the same period of last year, mainly because loss on investment in financial derivative instruments increased.
(13) Non-operating income stood at RMB8,337,965.06 for January-March 2016, up73.10% from the same period of last year, mainly because governmental subsidies increased.
II Progress of significant events and analysis& explanations on their influence and solutions√ Applicable□ Not applicable
On 5 August 2015, the Company held the 2015 1st Extraordinary General Meeting, which reviewed and approved the Proposal on Repurchasing Part of the Share A and Share B of the Company, and had published the Report about Repurchasing Part of the Share A and Share B of the Company on 10 October 2015 and as for the details of the above, please refer to the announcement of the Company (No.: 2015-029) and the report about repurchasing the shares that respectively diclosed on www.cninfo.com.cn on 6 August 2015 and 10 October 2015. The Company began to execute the repurchase proposal since 10 November 2015 and up to 31 March 2016, the Company had accumulatively repurchased the Share B of 15,318,707 shares and as for the detailed situation, please refer to the announcement of the Company (No.: 2016-016) that disclosed on www.cninfo.com.cn on 6 April 2016.
||||
|-|-|-|
|||Index to the relevant announcement|
|Overview of the significant event|Date of disclosure||
|||disclosed on the website|
|On 5 August 2015, the Company held the2015 1st Extraordinary General Meeting,which reviewed and approved the Proposalon Repurchasing Part of the Share A andShare B of the Company, and hadpublished the Report about RepurchasingPart of the Share A and Share B of theCompany on 10 October 2015 and as forthe details of the above, please refer to theannouncement of the Company (No.:2015-029) and the report aboutrepurchasing the shares that respectivelydiclosed on www.cninfo.com.cn on 6August 2015 and 10 October 2015. TheCompany began to execute the repurchaseproposal since 10 November 2015 and upto 31 March 2016, the Company hadaccumulatively repurchased the Share B of15,318,707 shares and as for the detailedsituation, please refer to the announcementof the Company (No.: 2016-016) thatdisclosed on www.cninfo.com.cn on 6April 2016.||Announcement on the Resolution of the|
|||2015 1st Extraordinary General Meeting|
||6 Aug. 2015||
|||(No.: 2015-029), which disclosed on|
|||http://www.cninfo.com.cn|
|||Report about Repurchasing Part of the|
|||Share A and Share B of the Company,|
||10 Oct. 2015||
|||which disclosed on|
|||http://www.cninfo.com.cn|
|||Announcement on the Execution of|
|||Repurchasing the Shares (No.: 2015-047),|
||11 Nov. 2015||
|||which disclosed on|
|||http://www.cninfo.com.cn|
|||Announcement on the Progress of|
|||Repurchasing the Shares (No.: 2016-016),|
||6 Apr. 2016||
|||which disclosed on|
|||http://www.cninfo.com.cn|

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd. III Commitments of the Company, its shareholders, actual controller, acquirer, directors, supervisors, senior management or other related parties fulfilled in the Reporting Period or ongoing at the period-end
√ Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||||Date of|||
||Commitment|Type of|||Term of||
|Commitment|||Contents|commitment||Fulfillment|
||maker|commitment|||commitment||
|||||making|||
|Commitments made in share reform|||||||
|Commitments made in acquisition|||||||
|documents or shareholding alteration|||||||
|documents|||||||
|Commitments made in time of asset|||||||
|restructuring|||||||
|Commitments made in time of IPO or|||||||
|refinancing|||||||
|Commitments concerning stock|||||||
|ownership incentive|||||||
|||||||The major|
||||The biggest|||shareholder|
||||shareholder|||Zibo Lucheng|
||||Zibo Lucheng|||Textile|
||||Textile|||Investment|
||||Investment|||Co., Ltd. and|
||||Co., Ltd. and|||the directors,|
||||the directors,|||supervisors as|
||Zibo Lucheng||||||
||||supervisors|||well as senior|
||Textile||||||
||||and senior|||executives of|
||Investment||||||
||||executives||10 Jul. 2015|which had not|
|Other commitments made to minority|Co., Ltd. and|Other|||||
||||committed|10 Jul. 2015|to 10 Jan.|decreased the|
|shareholders|the directors,|commitments|||||
||||that the shares||2016|shareholding|
||supervisors||||||
||||of the|||of the|
||and senior||||||
||||Company held|||Company|
||executives||||||
||||by them|||from 10 Jul.|
||||would not be|||2015 to 10|
||||decreased|||Jan. 2016.|
||||from 10 Jul.|||The|
||||2015 to the|||commitment|
||||future six|||had|
||||months|||completed the|
|||||||execution.|
|Executed on time|Yes||||||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
|||
|-|-|
|Specific reasons for failing to fulfill||
|commitments on time and plans for|N/A|
|next step||

IV Operating result forecast for January-June 2016
Forecast of a possible deficit or considerable YoY change in the accumulative net profit made during the period from the beginning of the year to the end of the next reporting period, as well as explanation of why:
□ Applicable√ Not applicable
V Securities investments
√ Applicable□ Not applicable
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Variet|||||||Closin||||Sour|
||Code of||Initial||Opening||g|||||
|y of||Name of||Opening|sharehol|Closing|||Profit/loss in|Accountin|ce of|
||securitie||investment cost|number of|ding|number of|shareh|Closing book|the Reporting|||
|securit||securities|||||olding|value (RMB)||g title|secu|
||s||(RMB)|shares held|percenta|shares held|percen||Period (RMB)|||
|ies|||||ge||||||rities|
||||||||tage|||||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|01788|GTJA|27,521,014.00|12,100,000|0.17%|12,100,000|0.17%|27,425,569.60||financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|02883|ZHYT|17,255,412.00|2,450,000|0.05%|3,000,000|0.06%|15,149,394.00|-1,294,179.90|financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|00980|LHCS|12,625,586.00|3,839,000|0.34%|4,574,000|0.41%|10,138,627.77|-2,443,171.44|financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|02006|JJJD|9,242,184.00|3,380,000|0.06%|3,380,000|0.06%|8,900,310.64|-309,820.94|financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|00116|ZSS|3,964,789.00|40,000|0.01%|377,000|0.06%|3,675,602.97|-275,435.65|financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|01666|TRTKJ|3,190,939.00|300,000|0.02%|300,000|0.02%|3,114,875.40|-64,997.40|financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|200056|HTB|2,175,792.00|200,000|0.03%|200,000|0.03%|1,906,590.40|-261,656.20|financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|00525|GSTL|2,750,680.00|850,000|0.01%|500,000|0.01%|1,387,444.50|-293,634.92|financial||
||||||||||||in|
|||||||||||assets||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|200053|SJDB|830,765.00|50,000|0.02%|50,000|0.02%|684,555.95|-143,327.60|financial||
||||||||||||in|
|||||||||||assets||
|||||||||||Tradable||
||||||||||||Buy-|
|Stock|200058|SSGB|468,272.00|100,000|0.01%|100,000|0.01%|484,147.30|17,499.30|financial||
||||||||||||in|
|||||||||||assets||
|Other securities investment||||||||||||
||||524,000.00|100,000|--|100,000|--|415,816.71|-20,831.92|--|--|
|held at the period-end||||||||||||
|Total|||80,549,433.00|23,409,000|--|24,681,000|--|73,282,935.24|-5,089,556.67|--|--|
|Disclosure date of the||||||||||||
|announcement about the||||||||||||
|board’s consent for the||||||||||||
|securities investment||||||||||||
|Disclosure date of the||||||||||||
|announcement about the||||||||||||
|general meeting’s consent||||||||||||
|for the securities investment||||||||||||
|(if any)||||||||||||

VI Investment in financial derivatives
√ Applicable□ Not applicable
Unit:RMB’0,000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Proporti||
|||||||||||||on of||
|||||||||||||closing||
|||||||||Amou||||||
|||Relate|Type|||||||||investme||
|||||||||||Impair|||Actual|
|||||||||nt|Amount|||nt||
|||d-part|of|Initial|||Opening||||Closing|||
|Operat|Relati||||Beginning|Ending||purcha||ment||amount|gain/loss|
|||y|derivat||||||sold in|||||
|||||investment|||investment|sed in||provisi|investment|in the|in|
|or|on|transac|ive||date|date|||reporting|||||
|||||amount|||amount|reporti||on (if|amount|Compan|reporting|
|||tion or|invest|||||ng|period|any)||y’s|period|
|||not|ment|||||||||||
|||||||||period||||closing||
|||||||||||||net||
|||||||||||||assets||
|||||||||||||(%)||
||||Forwa|||||||||||
|Comm|||rd|||||||||||
||Non-re||||2015-01-2|2016-07-||||||||
|ercial||No|exchan|79,386.21|||79,386.21|18.35|28,157.11|0|51,247.45|7.01%|-915.2|
||lated||||6|18||||||||
|bank|||ge|||||||||||
||||settle|||||||||||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||ment|||||||||||
|Comm|||Option|||||||||||
||Non-re||||2015-01-2|2016-07-||||||||
|ercial||No|portfol|104,300|||104,300|0|53,650|0|50,650|6.93%|-782.55|
||lated||||3|10||||||||
|bank|||io|||||||||||
|Total||||183,686.21|--|--|183,686.21|18.35|81,807.11|0|101,897.45|13.94%|-1,697.75|
|Capital source for derivative||||||||||||||
|||||Own funds||||||||||
|investment||||||||||||||
|Lawsuit (if applicable)||||No lawsuits||||||||||
|Disclosure date of board||||||||||||||
|announcement on approval of||||2015-04-25||||||||||
|derivative investment (if any)||||||||||||||
|Disclosure date of general||||||||||||||
|meeting announcement on||||||||||||||
|approval of derivative||||||||||||||
|investment (if any)||||||||||||||
|||||The Company conducted derivatives products transaction in order for hedging. And the forward settlement||||||||||
|||||hedging was operated by installments, with the relevant amount not more than the planned derivatives products||||||||||
|||||transactions. And all derivatives products transaction was zero-deposit. Meanwhile, the Company had a||||||||||
|||||complete risk control system for sufficient analysis and prevention of possible risks such as risk of laws and||||||||||
|||||regulations, credit risk, operation risk and market risk.||||||||||
|||||1. Risk concerning laws and regulations:||||||||||
|||||The Company conducted derivatives products transaction in strict accordance with relevant laws and rules as||||||||||
|||||well as regulatory policies from government securities regulatory authorities, if there were no standard||||||||||
|||||operation procedures and strict approval procedures, it was easy to cause compliant and regulatory risks||||||||||
|||||existing in the validity and feasibility of contract, commitments and other legal documents signed.||||||||||
|Risk analysis and risk control||||||||||||||
|||||Risk control measures: The Company carefully studied and mastered laws, regulations and policies relevant to||||||||||
|measures for derivative||||||||||||||
|||||derivative products transaction, formulated internal control rules for the forward settlement hedging business,||||||||||
|products held in reporting||||||||||||||
|||||standardized the operation procedures. And strengthened the compliant examination on derivative products||||||||||
|period (including but not||||||||||||||
|||||investment business, and strictly abided by relevant laws, regulations and the Company’s internal management||||||||||
|limited to market risk,||||||||||||||
|||||rules.||||||||||
|liquidity risk, credit risk,||||||||||||||
|||||2. Credit risk and liquidity risk:||||||||||
|operation risk, legal risk, etc.)||||||||||||||
|||||When the contract matures, the Company couldn’t deliver as scheduled due to insufficient liquidity, and the||||||||||
|||||counterparty or the Company couldn’t fulfill the contract due to other aspects except the liquidity, which would||||||||||
|||||cause credit risk and further economic losses for the Company.||||||||||
|||||Risk control measures: the Company chose the powerful financial institutions with good reputation as the||||||||||
|||||counterparty, and signed standard derivative products transaction contract, as well as strictly controlled the||||||||||
|||||credit risk of counterparty. The Company conducted derivative investment transactions according to the||||||||||
|||||relevant approval procedure, which was in line with relevant laws, regulations, the Company’s Articles of||||||||||
|||||Association, the Management Rules for Derivative Investment of Lu Thai Textile Co., Ltd. and the Proposal on||||||||||
|||||the Plan of Lu Thai Textile Co., Ltd. for Derivative Transactions in 2015 approved at the 20th Session of the 7th||||||||||
|||||Board of Directors on 23 Apr. 2015, and performed relevant information disclosure responsibilities. The||||||||||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
|||
|-|-|
||Company decided the up limit for the amount of derivative products transaction according to the production|
||and operation scale and the progress of foreign exchange income for the Company, and delivered by phases. It|
||was also possible to use extension of term and other ways to ensure the fulfillment of contract as schedules|
||upon the mature of contract, and wouldn’t cause any loss of credit risk for the Company due to insufficient|
||liquidity or other reasons.|
||3. Operation risk:|
||The derivative financial transactions had high specialty and complexity, so imperfect internal operation|
||procedures, staffs and external events would make the Company to undertake risks during the transaction.|
||Risk control measures: The Company promulgated strict authorization and approval system and perfect|
||regulatory mechanism, fixed the departments, operation procedures and approval procedures system to conduct|
||derivative products transaction, established special risk control positions, implemented strict authorization and|
||post checks and balances system, meanwhile, it improved the overall quality of relevant personnel through|
||strengthening the business training and professional ethics education for them. Besides, it established the|
||System of Reporting the Abnormal Situation Timely, formed an efficient risk management procedures, so as to|
||ensure to lower the operation risks to the maximum.|
||4. Market risk:|
||Since the RMB exchange rate reform on 8 Nov. 2015, the reform towards a market-based RMB exchange rate|
||regime has stepped into a new stage. In the short run, there is some depreciation pressure on the RMB, but a|
||sharp depreciation is considered unlikely. In the long run, the positive economic fundamentals of China, the|
||large surplus of the current accounts and the faster globalization of the RMB will enable the RMB to remain a|
||strong currency. In the near future, the RMB exchange rate is expected to be more flexible with a distinct|
||feature of bidirectional volatility and stable within a rational and balanced range. The forward settlement of|
||exchange and the option business is important derivative product transactions of the Company, which was|
||significantly affected by the exchange rate fluctuation. If the RMB is devalued by a large margin on the basis|
||of the current situation before the contract is due, so then, the larger losses shall incur in the contract on|
||forward settlement of exchange or option signed by the Company.|
||Risk control measures: Although a more flexible RMB exchange rate and the increased fluctuation range added|
||to the operation difficulty, it provided a certain opportunity. Therefore, the relevant personnel of the Company|
||will actively analyze market changes, carefully operate and hold positive opportunity, so as to try the best to|
||reduce the market risks under the condition of increased market difficulty.|
||1. Up to 31 March 2016, the Company held 32 undue financial derivative product contracts, totaling USD179|
||million, including 17 forward settlement contracts worth USD81 million and 15 foreign exchange option|
|Changes in market prices or||
||contracts worth USD98 million (the latest expiration before July 2016). The financial derivative products|
|fair value of invested||
||above accounted for 13.94% of the closing net assets.|
|derivatives in reporting period||
||2. From January- March 2016, the due financial derivative products of the Company totally equaled to|
|(fair value analysis should||
||USD121 million, and the losses generated was RMB16.9775 million. To be specific, the due forward|
|include specific analysis||
||settlement was USD44.5 million, generating loss of RMB9.152 million; the due foreign exchange options|
|methods as well as relevant||
||equaled to USD76.5 million, of which USD50.5 million was delivered on time upon satisfaction of the|
|assumptions and parameters)||
||delivery conditions, generating loss of RMB7.8255 million, and USD26 million was undelivered due to|
||dissatisfaction of the delivery conditions.|
|Significant changes in the||
|Company’s accounting policy|No significant changes|
|and specific accounting||

Abstract of the Report for the First Quarter of 2016 of Lu Thai Textile Co., Ltd.
|||
|-|-|
|principles for derivatives in||
|reporting period when||
|compared to last period||
||The Company’s independent directors Zhou Zhiji, Zhang Chengzhu, Wang Lei, Xu Jianjun and Zhao Yao,concerning conducting derivatives business, have issued the following professional advice: We are of the|
|Specific opinion from|opinion that it will strengthen the Company’s competitiveness to use derivative transactions with focus on|
|independent directors on the|forward settlement and purchase as an effective tool to avoid foreign exchange risks, to strengthen the relevant|
|Company’s derivatives|internal control and to carry out the loss and risk prevention measures so as to improve the operation and|
|investment and risk control|management. In conducting derivative transactions with focus on forward settlement and purchase, the|
||Company follows a legal approval procedure, has sound relevant institutions and keeps the risks relativelycontrollable. No harm has been done to the interests of the Company’s shareholders.|

VII Visits paid to the Company in the Reporting Period for purposes of research, communication, interview, etc.
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|Date of visit|Way of visit|Type of visitor|Index to main inquiry information|
|2016-03-30|Telephone communication|Institution|The basic situation of the Company|

 VIII Illegal provision of guarantees for external parties
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IX Occupation of theCompany’s funds by the controlling shareholder or its related parties for non-operating purposes
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Chairman of the Board: Liu Zibin Lu Thai Textile Co., Ltd.
27 April 2016