Lu Thai Textile Co., Ltd. First Quarter Report 2018 LU THAI TEXTILE CO., LTD.
FIRST QUARTER REPORT 2018
April 2018
Lu Thai Textile Co., Ltd. First Quarter Report 2018 Part I Important Notes
The Board of Directors (or the “Board”), the Supervisory Board as well as the Directors, Supervisors and senior management of Lu Thai Textile Co., Ltd. (inclusive of its consolidated subsidiaries, the “Company”; exclusive of its subsidiaries, the “Parent Company”, except where the context otherwise requires) hereby guarantee the factuality, accuracy and completeness of the contents of this Report, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions in this Report.
All theCompany’s Directors have attended the Board meeting for the review of this Report. Liu Zibin, theCompany’s legal representative, Zhang Hongmei, theCompany’s Chief Accountant, and Zhang Keming, theCompany’s Financial Manager hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete.
This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Lu Thai Textile Co., Ltd. First Quarter Report 2018 Part II Key Corporate Information
I Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√ Yes□ No
Reason
Business combination under the same control
||||||
|-|-|-|-|-|
|||January-March 2017||Change|
||January-March 2018|Before|||
||||After adjustment|After adjustment|
|||adjustment|||
|Sales revenue (RMB)|1,520,075,607.17|1,273,058,505.40|1,275,925,984.80|19.14%|
|Net income attributable to shareholders of|159,278,371.57||159,008,371.62||
|||157,994,708.53||0.17%|
|the listed company (RMB)|||||
|Net income attributable to shareholders of|||||
|the listed company before nonrecurring|138,275,958.60|155,049,414.60|156,062,830.19|-11.40%|
|gains and losses (RMB)|||||
|Net cash flows from operating activities|84,118,827.13||-75,753,318.23||
|||-73,576,928.32||211.04%|
|(RMB)|||||
|Basic earnings per share (RMB/share)|0.17|0.17|0.17|0.00%|
|Diluted earnings per share (RMB/share)|0.17|0.17|0.17|0.00%|
|Weighted average return on equity (%)|2.18%|2.25%|2.26%|-0.08%|
|||December 31, 2017||Change|
||March 31, 2018|Before|||
||||After adjustment|After adjustment|
|||adjustment|||
||10,417,233,981.45|10,170,624,027.7|10,170,624,027.75||
|Total assets (RMB)||||2.42%|
|||5|||
|Equity attributable to shareholders of the|7,368,770,650.13||7,230,942,770.16||
|||7,230,942,770.16||1.91%|
|listed company (RMB)|||||

Nonrecurring gains and losses:
√ Applicable□ Not applicable
Unit: RM
||||
|-|-|-|
|Item|January-March 2018|Note|
|Gains and losses on disposal of non-current assets (inclusive of|||
||-670,957.85||
|offset allowance for asset impairments)|||
|Government subsidies charged to current profit and loss|13,262,821.51||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|(exclusive of government subsidies given in the Company’s|||
|ordinary course of business at fixed quotas or amounts as per|||
|government’s uniform standards )|||
|Gains and losses on changes in fair value of trading financial|||
|assets and liabilities & investment income from disposal of|||
|trading financial assets and liabilities and available-for-sale|10,391,184.80||
|financial assets (exclusive of effective portion of hedges that arise|||
|in the Company’s ordinary course of business)|||
|Non-operating revenue and expense other than above|498,380.22||
|Less: Income tax effects|999,728.27||
|Non-controlling interests effects (net of tax)|1,479,287.44||
|Total|21,002,412.97|--|

Explanation of why the Company classifies an item as a nonrecurring gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Nonrecurring Gains and Losses, or reclassifies any nonrecurring gain/loss item listed in the said explanatory announcement as a recurring gain/loss:□ Applicable√ Not applicable
No such cases for the Reporting Period.
II Total Number of Shareholders and Top 10Shareholders’ Holdings at Period-End
1. Numbers of Common Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders
Unit: share
||||||||
|-|-|-|-|-|-|-|
|Common shareholders at|||Preferred shareholders with resumed||||
|||61,943|||0||
|period-end|||voting rights at period-end (if any)||||
|Top 10 shareholders|||||||
|||Shareholding|||Pledged or frozen shares||
|Name of|Nature of||||||
|||percentage at|Shares|Restricted shares|||
|shareholder|shareholder||||Status|Shares|
|||period-end (%)|||||
|Zibo LuchengTextileInvestment Co.,Ltd.|Domesticnon-state-ownedjuridical person|15.21%|140,353,583||||
|Tailun (Thailand)Textile Co., Ltd.|Foreign juridicalperson|12.82%|118,232,400|118,232,400|||
|Hong KongSecuritiesClearing Co., Ltd|Foreign juridicalperson|2.73%|25,178,706||||
|Central Huijin|State-owned|2.20%|20,315,300||||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
|||||||
|-|-|-|-|-|-|
|AssetsManagement Co.,Ltd.|juridical person|||||
|T.ROWE PRICEINTLDISCOVERYFUND|Foreign juridicalperson|2.16%|19,948,219|||
|China SecuritiesFinanceCorporationLimited|Domesticnon-state-ownedjuridical person|1.70%|15,679,091|||
|Hong KongMonetaryAuthority-self-owned funds|Foreign juridicalperson|1.26%|11,669,693|||
|Bank of ChinaLimited-Hua’anNew Silk RoadTheme EquitySecuritiesInvestment Fund|Other|1.08%|9,990,000|||
|FORENINGENAP INVESTF.M.B.A.|Foreign juridicalperson|0.75%|6,879,562|||
|RBCEMERGINGMARKETSSMALL CAPEQUITY FUND|Foreign juridicalperson|0.74%|6,785,384|||
|Top 10 non-restricted shareholders||||||
|||||Type of shares||
|Name of shareholder||Non-restricted shares held at period-end||||
|||||Type|Shares|
|Zibo Lucheng Textile InvestmentCo., Ltd.||140,353,583||RMB common||
||||||140,353,583|
|||||stock||
|Hong Kong Securities Clearing Co.,Ltd||25,178,706||RMB common||
||||||25,178,706|
|||||stock||
|Central Huijin Assets ManagementCo., Ltd.||20,315,300||RMB common||
||||||20,315,300|
|||||stock||
|T.ROWE PRICE INTLDISCOVERY FUND||19,948,219||Domestically||
||||||19,948,219|
|||||listed stock for||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
|||||
|-|-|-|-|
|||foreign investors||
|China Securities FinanceCorporation Limited|15,679,091|RMB common||
||||15,679,091|
|||stock||
|Hong Kong MonetaryAuthority-self-owned funds|11,669,693|RMB common||
||||11,669,693|
|||stock||
|Bank of China Limited-Hua’an NewSilk Road Theme Equity SecuritiesInvestment Fund|9,990,000|||
|||RMB common||
||||9,990,000|
|||stock||
|FORENINGEN AP INVESTF.M.B.A.|6,879,562|Domestically||
|||listed stock for|6,879,562|
|||foreign investors||
|RBC EMERGING MARKETSSMALL CAP EQUITY FUND|6,785,384|Domestically||
|||listed stock for|6,785,384|
|||foreign investors||
|HTHK-MANULIFE CHINAVALUE FUND|5,727,638|Domestically||
|||listed stock for|5,727,638|
|||foreign investors||
||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 well|||
|Related or acting-in-concert parties||||
||as sponsor of foreign capital of the Company. All of other shareholders are people holding|||
|among shareholders above||||
||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.|||

Indicate by tick mark whether any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yea√ No
No such cases in the Reporting Period.
2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them
□ Applicable√ Not applicable
Lu Thai Textile Co., Ltd. First Quarter Report 2018 Part III Significant Events
I Changes in Selected Financial Statement Items and Explanation of why
√ Applicable□ Not applicable
Assets items:
(1) The monetary capital stood at RMB925,105,665.95 on March. 31, 2018, up by33.30% from the opening amount, mainly because of the increase in the share repurchase of the Company and the reserve fund for dividends at the end of the Reporting Period. (2) The financial assets measured at fair value and the changes recorded into the current gains and losses stood at RMB7,895,000.00 on March 31, 2018, up by100% from the opening amount, mainly because of the gains arising from changes in fair value of forward financial assets at the end of the Reporting Period.
(3) The notes receivable stood at RMB73,375,572.15 on March 31, 2018, down by47.32% from the opening amount, mainly because of the collection of the period-begin L/C at maturity and the remittance ofbanker’s acceptance.
(4) The interest receivable stood at RMB1,716,295.67 on March 31, 2018, up by190.90% from the opening amount, mainly because of the increase in the principal of fixed deposits and interest accrual days in the Reporting Period.
(5) The engineering materials stood at RMB103,498,148.45 on March 31, 2018, up by81.85% from the opening amount, mainly because of the increase of equipment to be installed.
(6) Other non-current assets stood at RMB75,435,092.14 on March 31, 2018, up by107.29% from the opening amount, mainly because of the increase of prepayment for equipment.
Liabilities andowners’ equity items:
(7) The payroll payable stood at RMB202,744,392.02 on March 31, 2018, down by36.01% from the opening amount, mainly because of the payment of year-end bonus for 2017 in the Reporting Period.
(8) The non-current liabilities due within one year stood at RMB0.00 on March 31, 2018, down by100.00% from the opening amount, mainly because of the repayment of the loan due within one year borrowed by Lu Thai (Vietnam) in the Reporting Period. (9) The long-term loans stood at RMB107,412,290.00 on March 31, 2018, up by100.00% from the opening amount, mainly because of the increase of the long-term loan borrowed by Lu Thai (Vietnam) for its second phase of expansion.
(10) Other comprehensive income stood at RMB-4,639,917.38 on March 31, 2018, down by127.60% from the opening amount, mainly because of the decrease of the translation balance of the foreign currency statement.
Income statement items
(11) The financial expense stood at RMB43,774,185.06 for January-March 2018, up by255.67% from the same period of last year, mainly because of the increase of exchange losses in the Reporting Period.
(12) The Asset impairment losses stood at RMB-725,392.20 for January-March 2018, up by80.12% from the same period of last year, mainly because of the provision for bad debts in the current period has increased year-on-year.
(13) The income arising from changes in fair value stood at RMB7,895,000.00 for January-March 2018, up by100.00% from the same period of last year, mainly because of the changes in fair value of financial assets at the end of the Reporting Period.
(14) The investment income stood at RMB2,439,952.13 for January-March 2018, up by307.68% from the same period of last year, mainly because of the increase of investment income in derivative financial instruments in the Reporting Period.
(15) The asset disposal income stood at RMB-300,994.82 for January-March 2018, up by65.13% from the same period of last year, mainly because of the decrease of fixed assets disposal loss in the Reporting Period.
(16) Other income stood at RMB13,262,821.51 for January-March 2018, up by118.09% from the same period of last year, mainly
Lu Thai Textile Co., Ltd. First Quarter Report 2018 because of the increase of government subsidies related to operation received in the Reporting Period.
(17) The non-operating expense stood at RMB1,054,317.03 for January-March 2018, down by69.43% from the same period of last year, mainly because of the decrease of payment for donations in the Reporting Period.
II Progress, Influence and Solutions Associated with Significant Events
□ Applicable√ Not applicable
III Commitments that theCompany’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company and Other Commitment Makers, Failed to Fulfill on Time during Reporting Period
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IV Operating Result Forecast for January-June 2018
Warning of a forecast loss on or a forecast significant year-over-year change in net income for January-June 2018, as well as explanation of why:
□ Applicable√ Not applicable
V Securities Investments
□ Applicable√ Not applicable
No such cases in the Reporting Period.
VI Investments in Derivative Financial Instruments
√ Applicable□ Not applicable
Unit:RMB’0,000 (in RMB ten thousand)
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Proporti||
|||||||||||||on of||
|||||||||||||closing||
|||||||||Amount||||investm||
|||Related-|Type of||||||Amount|Impairm|||Actual|
|||||Initial|||Opening||||Closing|ent||
|||||||||purchas||||||
|Operato||party|derivativ||Beginni|Ending|||sold in|ent||amount|gain/los|
||Relation|||investm|||investm|ed in|||investm|||
|||t ransacti|e||||||Reporting|provisio||in the|s in|
|r||||ent|ng date|date|ent|Reporti|||ent|||
|||on ornot|investment|amount|||amount|ng|Period|n (ifany)|amount|Company’s|Reporting Period|
|||||||||Period||||||
|||||||||||||closing||
|||||||||||||net||
|||||||||||||assets||
|||||||||||||(%)||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||Forward||||||||||
|Comme|||||||||||||
||Non-rel||exchange|28,270.|Feb. 22,|Dec. 21,||28,270.||25,090.|||
|rcial||No|||||0||3,180||3.17%|12.4|
||ated||settlemen|78|2018|2018||78||78|||
|bank|||||||||||||
||||t||||||||||
|Comme|||foreign||||||||||
||||foreign||||||||||
||Non-rel|||121,673|Nov. 30,|Dec. 27,||101,873|58,226.|63,447.|||
|rcial||No|exchange||||19,800||||8.01%|210.35|
||ated|||.66|2017|2018||.66|48|18|||
|bank|||option||||||||||
||||forward||||||||||
||||forward||||||||||
|Comme|||||||||||||
||Non-rel||exchange|16,163.|Mar. 14,|Mar. 20,||16,163.|16,163.||||
|rcial||No|||||0|||0||24.92|
||ated||transactio|06|2018|2018||06|06||||
|bank|||||||||||||
||||ns||||||||||
|Comme|||foreign||||||||||
||||foreign||||||||||
||Non-rel||||Mar. 21,|Mar. 30,|||||||
|rcial||No|exchange|2,850.4|||0|2,850.4|2,850.4|0||1.95|
||ated||||2018|2018|||||||
|bank|||swap||||||||||
|||||168,957||||149,157|80,419.|88,537.|||
|Total|||||--|--|19,800||||11.18%|249.62|
|||||.9||||.9|94|96|||
|Capital source for derivative|||||||||||||
|||||Self-owned funds|||||||||
|investment|||||||||||||
|Lawsuit (if applicable)||||No|||||||||
|Disclosure date of board|||||||||||||
|announcement on approval of||||April 28, 2017|||||||||
|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 it 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 market risks, liquidity risk and credit risk, operation risk and risk of|||||||||
|Risk analysis and risk control||||laws and regulations.|||||||||
|measures for derivative products held||||1. Market risk: when the international and domestic economic situations change, the|||||||||
|in Reporting Period (including but||||corresponding changes in exchange rates and interest rates may have an adverse impact on|||||||||
|not limited to market risk, liquidity||||the financial derivatives transactions of the Company. Precautionary measures to be taken|||||||||
|risk, credit risk, operation risk, legal||||include: the Company chooses risk-controlled financial derivative tools with simple structure|||||||||
|risk, etc.)||||and good liquidity to carry out the hedging business, strictly controls the scale of financial|||||||||
|||||derivatives trading by staged operations, and adjusts the strategy according to market changes|||||||||
|||||in a timely manner.|||||||||
|||||2. Liquidity risk and credit risk: a credit risk arising from failure of the contractually due|||||||||
|||||Company or counterparty in performing the contract due to liquidity or factors other than|||||||||
|||||liquidity. Precautionary measures to be taken include: the Company determines the upper|||||||||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
|||
|-|-|
||limit of derivatives transaction amounts according to production and operation scale as well|
||as foreign exchange income, and conducts operations by stage according to the budget of|
||future collections and disbursement. The derivative trades are free of guarantee deposit and|
||can still be guaranteed in performance after the contract expires by means of extension and|
||balance settlement etc. to prevent the Company from credit damages due to lack of liquidity.|
||The Company selects financial institutions with strong capability and good reputation as a|
||counterparty and signs standard derivative trading contracts to strictly control credit risk of|
||the counterparty.|
||3. Operation risk:|
||The derivative 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, formulated the 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|
||professional ethics education and business training for them. Besides, it established the|
||System of Reporting the Abnormal Situation Timely to lower the operation risks to the|
||maximum.|
||4. Risk concerning laws and regulations:|
||The Company conducted derivatives products transaction in strict accordance with State|
||relevant laws and rules, 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 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 transaction business. The Company carries out derivative|
||trading business upon fulfillment of relevant approval procedures, complying with relevant|
||national laws and regulations, the "Articles of Association", "Lu Thai Derivatives Trading|
||Management System" and the relevant provisions of the "Proposal on the Company's|
||Derivatives Trading Plan" reviewed and passed at the seventh meeting of the eighth session|
||of the Board of Directors held on April 26, 2017. Moreover, the Company fulfilled the|
||relevant information disclosure obligations.|
||1. As of Mar. 31, 2018, the Company held a total of 39 undue financial derivative contracts,|
||totaling US$ 141.20 million, all of which were forward exchange settlement and foreign|
|Changes in market prices or fair value||
||exchange options. The contract expires at the latest by December 2018. Financial derivatives|
|of invested derivatives in Reporting||
||accounted for 11.18% of the net assets at the end of the Reporting Period.|
|Period (fair value analysis should||
||2. From January to March of 2018, the mature financial derivatives of the Company|
|include specific analysis methods as||
||amounted to US$127.0124 million, generating an income of RMB2.4962 million after|
|well as relevant assumptions and||
||implemented in line with contracts, including the expiry long-term foreign exchange|
|parameters)||
||settlement of US$5 million, which generated an income of RMB0.124 million. The mature|
||foreign exchange options amounted to US$92 million, generating an income of RMB2.1035|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
|||
|-|-|
||million. The mature long-term foreign exchange sale amounted to US$25.5131 million,|
||generating an income of RMB249,200. The mature foreign exchange swap amounted to|
||US$ 4.4993 million, generating an income of RMB19,500.|
|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||
||The Company’s independent directors Xu Jianjun, Zhao Yao, Bi Xiuli, Pan Ailing and Wang|
||Xinyu, concerning conducting derivatives business, have issued the following professional|
||advice: We are of the opinion that it will strengthen the Company’s competitiveness to use|
|Specific opinion from independent|derivative transactions with focus on forward settlement and purchase as an effective tool to|
|directors on the Company’s|avoid foreign exchange risks, to strengthen the relevant internal control and to carry out the|
|derivatives investment and risk|loss and risk prevention measures so as to improve the operation and management. In|
|control|conducting derivative transactions with focus on forward settlement and purchase, the|
||Company follows a legal approval procedure, has sound relevant institutions and keeps the|
||risks relatively controllable. No harm has been done to the interests of the Company’s|
||shareholders.|

VII Visits Paid to the Company for Purposes of Research, Communication, Interview, etc. during Reporting Period
□ Applicable√ Not applicable
No such cases in the Reporting Period.
VIII Irregularities in Provision of Guarantees for External Parties
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IX Occupation of theCompany’s Money by Its Controlling Shareholder or Related Parties for Non-Operating Purposes
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Lu Thai Textile Co., Ltd. First Quarter Report 2018 Part IV Financial Statements
I Financial Statements
1. Consolidated Balance Sheet
Prepared by Lu Thai Textile Co., Ltd.
March 31, 2018
Unit: RMB
||||
|-|-|-|
|Item|March 31, 2018|December 31, 2017|
|Current assets:|||
|Monetary assets|925,105,665.95|693,989,293.38|
|Settlement reserve|||
|Interbank loans granted|||
|Financial assets at fair value through|||
||7,895,000.00||
|profit or loss|||
|Derivative financial assets|||
|Notes receivable|73,375,572.15|139,276,742.34|
|Accounts receivable|330,299,610.70|334,080,524.05|
|Prepayments|187,553,784.52|146,463,066.38|
|Premiums receivable|||
|Reinsurance receivables|||
|Receivable reinsurance contract|||
|reserve|||
|Interest receivable|1,716,295.67|590,003.07|
|Dividends receivable|||
|Other receivables|42,239,088.18|56,182,782.04|
|Financial assets purchased under|||
|resale agreements|||
|Inventories|2,126,669,831.68|2,100,661,221.93|
|Assets classified as held for sale|||
|Current portion of non-current assets|||
|Other current assets|126,033,802.29|118,588,703.34|
|Total current assets|3,820,888,651.14|3,589,832,336.53|
|Non-current assets:|||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Loans and advances to customers|||
|Available-for-sale financial assets|85,127,000.00|84,533,000.00|
|Held-to-maturity investments|||
|Long-term receivables|||
|Long-term equity investments|97,480,499.35|97,536,732.02|
|Investment property|24,210,125.14|24,563,544.58|
|Property, plant and equipment|5,323,758,356.52|5,421,295,850.03|
|Construction in progress|190,388,793.40|157,421,820.68|
|Engineering materials|103,498,148.45|56,913,806.06|
|Proceeds from disposal of property,|||
|plant and equipment|||
|Productive living assets|||
|Oil and gas assets|||
|Intangible assets|499,429,138.35|498,948,301.48|
|R&D expense|||
|Goodwill|20,613,803.29|20,613,803.29|
|Long-term prepaid expense|103,383,740.91|107,877,194.52|
|Deferred income tax assets|73,020,632.76|74,697,159.71|
|Other non-current assets|75,435,092.14|36,390,478.85|
|Total non-current assets|6,596,345,330.31|6,580,791,691.22|
|Total assets|10,417,233,981.45|10,170,624,027.75|
|Current liabilities:|||
|Short-term borrowings|1,327,065,938.93|1,135,124,996.40|
|Borrowings from central bank|||
|Customer deposits and deposits from|||
|banks and other financial institutions|||
|Interbank loans obtained|||
|Financial liabilities at fair value|||
|through profit or loss|||
|Derivative financial liabilities|||
|Notes payable|7,611,554.43|7,301,771.85|
|Accounts payable|343,203,319.45|366,265,132.65|
|Advances from customers|96,759,833.97|119,785,945.48|
|Financial assets sold under|||
|repurchase agreements|||
|Handling charges and commissions|||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|payable|||
|Payroll payable|202,744,392.02|316,836,488.95|
|Taxes payable|26,757,268.54|33,055,090.58|
|Interest payable|2,000,940.15|1,572,231.86|
|Dividends payable|441,113.64|441,113.64|
|Other payables|158,952,966.49|127,090,009.25|
|Reinsurance payables|||
|Insurance contract reserve|||
|Payables for acting trading of|||
|securities|||
|Payables for underwriting of|||
|securities|||
|Liabilities directly associated with|||
|assets classified as held for sale|||
|Current portion of non-current|||
|||62,750,292.49|
|liabilities|||
|Other current liabilities|||
|Total current liabilities|2,165,537,327.62|2,170,223,073.15|
|Non-current liabilities:|||
|Long-term borrowings|107,412,290.00||
|Bonds payable|||
|Including: Preferred shares|||
|Perpetual bonds|||
|Long-term payables|||
|Long-term payroll payable|93,843,473.02|93,843,473.02|
|Specific payables|||
|Provisions|||
|Deferred income|126,523,606.68|126,737,092.32|
|Deferred income tax liabilities|2,903,444.17|2,904,899.46|
|Other non-current liabilities|1,840,000.00|1,840,000.00|
|Total non-current liabilities|332,522,813.87|225,325,464.80|
|Total liabilities|2,498,060,141.49|2,395,548,537.95|
|Owners’ equity:|||
|Share capital|922,602,311.00|922,602,311.00|
|Other equity instruments|||
|Including: Preferred shares|||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Perpetual bonds|||
|Capital reserves|699,493,593.82|699,493,593.82|
|Less: Treasury shares|||
|Other comprehensive income|-4,639,917.38|16,810,574.22|
|Specific reserve|||
|Surplus reserves|962,933,579.06|962,933,579.06|
|General reserve|||
|Retained earnings|4,788,381,083.63|4,629,102,712.06|
|Total equity attributable to owners of|||
||7,368,770,650.13|7,230,942,770.16|
|Parent Company|||
|Non-controlling interests|550,403,189.83|544,132,719.64|
|Total owners’ equity|7,919,173,839.96|7,775,075,489.80|
|Total liabilities and owners’ equity|10,417,233,981.45|10,170,624,027.75|

 Legal representative: Liu Zibin TheCompany’s chief accountant: Zhang Hongmei TheCompany’s financial manager: Zhang Keming
2. Parent Company Balance Sheet
Unit: RMB
||||
|-|-|-|
|Item|March 31, 2018|December 31, 2017|
|Current assets:|||
|Monetary assets|410,894,461.13|267,809,829.78|
|Financial assets at fair value through|||
||6,736,100.00||
|profit or loss|||
|Derivative financial assets|||
|Notes receivable|50,588,412.08|93,244,480.81|
|Accounts receivable|353,647,366.36|305,903,590.98|
|Prepayments|37,437,993.48|81,471,605.69|
|Interest receivable|716,450.08|220,590.38|
|Dividends receivable|||
|Other receivables|407,246,970.03|519,788,239.57|
|Inventories|1,201,043,724.61|1,164,055,145.96|
|Assets classified as held for sale|||
|Current portion of non-current assets|||
|Other current assets|52,530,631.69|53,657,308.33|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Total current assets|2,520,842,109.46|2,486,150,791.50|
|Non-current assets:|||
|Available-for-sale financial assets|73,127,000.00|72,533,000.00|
|Held-to-maturity investments|||
|Long-term receivables|||
|Long-term equity investments|2,072,643,615.39|1,816,493,348.06|
|Investment property|15,353,874.24|15,536,968.08|
|Property, plant and equipment|2,710,451,455.73|2,811,046,847.91|
|Construction in progress|56,288,457.78|25,703,496.87|
|Engineering materials|950,398.04|1,609,204.75|
|Proceeds from disposal of property,|||
|plant and equipment|||
|Productive living assets|||
|Oil and gas assets|||
|Intangible assets|248,024,224.07|249,994,817.83|
|R&D expense|||
|Goodwill|||
|Long-term prepaid expense|||
|Deferred income tax assets|50,595,834.07|51,474,007.76|
|Other non-current assets|32,089,337.07|27,077,391.31|
|Total non-current assets|5,259,524,196.39|5,071,469,082.57|
|Total assets|7,780,366,305.85|7,557,619,874.07|
|Current liabilities:|||
|Short-term borrowings|800,508,914.22|622,438,413.87|
|Financial liabilities at fair value|||
|through profit or loss|||
|Derivative financial liabilities|||
|Notes payable|6,384,161.90|6,124,239.92|
|Accounts payable|172,043,142.33|147,883,359.29|
|Advances from customers|57,941,034.18|52,314,250.61|
|Payroll payable|155,501,642.29|240,391,459.47|
|Taxes payable|9,044,751.23|17,297,415.92|
|Interest payable|1,929,895.73|973,134.21|
|Dividends payable|441,113.64|441,113.64|
|Other payables|24,284,511.29|22,933,385.28|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Liabilities directly associated with|||
|assets classified as held for sale|||
|Current portion of non-current|||
|liabilities|||
|Other current liabilities|||
|Total current liabilities|1,228,079,166.81|1,110,796,772.21|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Including: Preferred shares|||
|Perpetual bonds|||
|Long-term payables|||
|Long-term payroll payable|93,843,473.02|93,843,473.02|
|Specific payables|||
|Provisions|||
|Deferred income|80,889,176.24|80,580,249.14|
|Deferred income tax liabilities|94,050.00|4,950.00|
|Other non-current liabilities|||
|Total non-current liabilities|174,826,699.26|174,428,672.16|
|Total liabilities|1,402,905,866.07|1,285,225,444.37|
|Owners’ equity:|||
|Share capital|922,602,311.00|922,602,311.00|
|Other equity instruments|||
|Including: Preferred shares|||
|Perpetual bonds|||
|Capital reserves|759,836,702.91|759,836,702.91|
|Less: Treasury shares|||
|Other comprehensive income|532,950.00|28,050.00|
|Specific reserve|||
|Surplus reserves|959,824,839.42|959,824,839.42|
|Retained earnings|3,734,663,636.45|3,630,102,526.37|
|Total owners’ equity|6,377,460,439.78|6,272,394,429.70|
|Total liabilities and owners’ equity|7,780,366,305.85|7,557,619,874.07|

Lu Thai Textile Co., Ltd. First Quarter Report 2018 3. Consolidated Income Statement
Unit: RMB
||||
|-|-|-|
|Item|January-March 2018|January-March 2017|
|1. Operating revenue|1,520,075,607.17|1,275,925,984.80|
|Including: Sales revenue|1,520,075,607.17|1,275,925,984.80|
|Interest revenue|||
|Premium revenue|||
|Handling charge and commission|||
|revenue|||
|2. Cost of operating revenue|1,350,782,281.17|1,078,187,498.30|
|Including: Cost of sales|1,085,683,246.68|861,673,738.94|
|Interest expense|||
|Handling charge and commission|||
|expense|||
|Surrenders|||
|Net claims paid|||
|Net amount provided as insurance|||
|contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium expense|||
|Taxes and surtaxes|27,882,652.80|22,307,609.32|
|Selling expense|30,483,720.76|33,468,425.19|
|Administrative expense|163,683,868.07|152,079,558.73|
|Finance costs|43,774,185.06|12,307,415.76|
|Asset impairment losses|-725,392.20|-3,649,249.64|
|Add: Gain on changes in fair value (“-”|||
||7,895,000.00||
|for loss)|||
|Investment income (“-” for loss)|2,439,952.13|598,500.00|
|Including: Share of profit or loss of|||
||-56,232.67||
|joint ventures and associates|||
|Foreign exchange gain (“-” for loss)|||
|Asset disposal income (“-” for loss)|-300,994.82|-863,142.70|
|Other income|13,262,821.51|6,081,296.64|
|3. Operating income (“-” for loss)|192,590,104.82|203,555,140.44|
|Add: Non-operating revenue|1,182,734.22|1,217,613.71|
|Less: Non-operating expense|1,054,317.03|3,448,846.28|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|4. Pretax income (“-” for loss)|192,718,522.01|201,323,907.87|
|Less: Income tax expense|27,669,680.25|34,425,547.44|
|5. Net income (“-” for net loss)|165,048,841.76|166,898,360.43|
|5.1 Net income from continuing|||
||165,048,841.76|166,898,360.43|
|operations (“-” for net loss)|||
|5.2 Net income from discontinued|||
|operations (“-” for net loss)|||
|Attributable to owners of Parent|||
||159,278,371.57|159,008,371.62|
|Company|||
|Attributable to non-controlling|||
||5,770,470.19|7,889,988.81|
|interests|||
|6. Other comprehensive income, net of|||
||-21,450,491.60|-3,925,723.62|
|tax|||
|Attributable to owners of Parent|||
||-21,450,491.60|-3,925,723.62|
|Company|||
|6.1 Items that will not be|||
|reclassified to profit or loss|||
|6.1.1 Changes in net liabilities or|||
|assets caused by re-measurements on|||
|defined benefit pension schemes|||
|6.1.2 Share of other|||
|comprehensive income of investees that|||
|will not be reclassified to profit or loss|||
|under equity method|||
|6.2 Items that may subsequently be|||
||-21,450,491.60|-3,925,723.62|
|reclassified to profit or loss|||
|6.2.1 Share of other|||
|comprehensive income of investees that|||
|will be reclassified to profit or loss under|||
|equity method|||
|6.2.2 Gains/Losses on changes in|||
|fair value of available-for-sale financial|504,900.00||
|assets|||
|6.2.3 Gains/Losses arising from|||
|reclassification of held-to-maturity|||
|investments to available-for-sale financial|||
|assets|||
|6.2.4 Effective gains/losses on|||
|cash flow hedges|||
|6.2.5 Differences arising from|||
|translation of foreign|-21,955,391.60|-3,925,723.62|
|currency-denominated financial|||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|statements|||
|6.2.6 Other|||
|Attributable to non-controllin|g||
|interests|||
|7. Total comprehensive income|143,598,350.16|162,972,636.81|
|Attributable to owners of Paren|t137,827,879.97||
|||155,082,648.00|
|Company|||
|Attributable to non-controllin|g5,770,470.19||
|||7,889,988.81|
|interests|||
|8. Earnings per share|||
|8.1 Basic earnings per share|0.17|0.17|
|8.2 Diluted earnings per share|0.17|0.17|

 Where business mergers under the same control occurred in the current period, the net income achieved by the merged parties before the business mergers was RMB , with the amount for the same period of last year being RMB .
Legal representative: Liu Zibin TheCompany’s chief accountant: Zhang Hongmei TheCompany’s financial manager: Zhang Keming
4. Parent Company Income Statement
Unit: RMB
||||
|-|-|-|
|Item|January-March 2018|January-March 2017|
|1. Sales revenue|1,162,278,986.58|1,078,892,478.02|
|Less: Cost of sales|871,297,002.70|768,104,469.94|
|Taxes and surtaxes|21,573,452.57|16,363,855.87|
|Selling expense|17,199,119.93|20,865,997.90|
|Administrative expense|112,651,019.32|101,447,551.05|
|Finance costs|22,144,987.67|3,528,511.56|
|Asset impairment losses|1,683,200.50|-2,657,643.03|
|Add: Gain on changes in fair value(“-” for loss)|||
||6,736,100.00||
|Investment income (“-” for loss)|1,461,867.85|598,500.00|
|Including: Share of profit or lossof joint ventures and associates|||
||-56,232.67||
|Asset disposal income (“-” forloss)|||
||-8,943,719.11|60,973.24|
|Other income|8,296,822.90|5,130,542.20|
|2. Operating income (“-” for loss)|123,281,275.53|177,029,750.17|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Add: Non-operating revenue|899,417.77|1,249,329.62|
|Less: Non-operating expense|335,839.31|3,131,888.90|
|3. Pretax income (“-” for loss)|123,844,853.99|175,147,190.89|
|Less: Income tax expense|19,283,743.91|27,186,021.23|
|4. Net income (“-” for net loss)|104,561,110.08|147,961,169.66|
|4.1 Net income from continuing|||
||104,561,110.08|147,961,169.66|
|operations (“-” for net loss)|||
|4.2 Net income from discontinued|||
|operations (“-” for net loss)|||
|5. Other comprehensive income, net of|||
||504,900.00||
|tax|||
|5.1 Items that will not be reclassified|||
|to profit or loss|||
|5.1.1 Changes in net liabilities or|||
|assets caused by re-measurements on|||
|defined benefit pension schemes|||
|5.1.2 Share of other|||
|comprehensive income of investees that|||
|will not be reclassified into profit or|||
|loss under equity method|||
|5.2 Items that may subsequently be|||
||504,900.00||
|reclassified to profit or loss|||
|5.2.1 Share of other|||
|comprehensive income of investees that|||
|will be reclassified into profit or loss|||
|under equity method|||
|5.2.2 Gains/Losses on changes in|||
|fair value of available-for-sale financial|504,900.00||
|assets|||
|5.2.3 Gains/Losses arising from|||
|reclassification of held-to-maturity|||
|investments to available-for-sale|||
|financial assets|||
|5.2.4 Effective gains/losses on|||
|cash flow hedges|||
|5.2.5 Differences arising from|||
|translation of foreign|||
|currency-denominated financial|||
|statements|||
|5.2.6 Other|||
|6. Total comprehensive income|105,066,010.08|147,961,169.66|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|7. Earnings per share|||
|7.1 Basic earnings per share|0.1|1 0.16|
|7.2 Diluted earnings per share|0.1|1 0.16|

 5. Consolidated Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Item|January-March 2018|January-March 2017|
|1. Cash generated by or used in|||
|operating activities:|||
|Proceeds from sale of commodities|||
||1,481,659,910.33|1,363,479,554.57|
|and rendering of services|||
|Net increase in customer deposits|||
|and deposits from banks and other|||
|financial institutions|||
|Net increase in loans from central|||
|bank|||
|Net increase in loans from other|||
|financial institutions|||
|Premiums received on original|||
|insurance contracts|||
|Net proceeds from reinsurance|||
|Net increase in deposits and|||
|investments of policy holders|||
|Net increase in proceeds from|||
|disposal of financial assets at fair value|||
|through profit or loss|||
|Interest, handling charges and|||
|commissions received|||
|Net increase in interbank loans|||
|obtained|||
|Net increase in proceeds from|||
|repurchase transactions|||
|Tax rebates|70,407,971.68|47,097,687.87|
|Cash generated by other operating|||
||37,904,123.48|37,616,268.66|
|activities|||
|Subtotal of cash generated by operating|||
||1,589,972,005.49|1,448,193,511.10|
|activities|||
|Payments for commodities and|||
||860,039,261.70|877,736,029.78|
|services|||
|Net increase in loans and advances|||
|||0.00|
|to customers|||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Net increase in deposits in central|||
|||0.00|
|bank and in interbank loans granted|||
|Payments for claims on original|||
|||0.00|
|insurance contracts|||
|Interest, handling charges and|||
|||0.00|
|commissions paid|||
|Policy dividends paid||0.00|
|Cash paid to and for employees|496,773,800.61|478,422,424.60|
|Taxes paid|68,934,998.71|91,094,590.03|
|Cash used in other operating|||
||80,105,117.34|76,693,784.92|
|activities|||
|Subtotal of cash used in operating|||
||1,505,853,178.36|1,523,946,829.33|
|activities|||
|Net cash flows from operating|||
||84,118,827.13|-75,753,318.23|
|activities|||
|2. Cash generated by or used in|||
|investing activities:|||
|Proceeds from disinvestments|||
|Investment income|||
|Net proceeds from disposal of|||
|property, plant and equipment,|||
||544,564.38|451,988.35|
|intangible assets and other long-lived|||
|assets|||
|Net proceeds from disposal of|||
|subsidiaries or other business units|||
|Cash generated by other investing|||
||4,259,032.24|70,980,953.36|
|activities|||
|Subtotal of cash generated by investing|||
||4,803,596.62|71,432,941.71|
|activities|||
|Payments for acquisition of property,|||
|plant and equipment, intangible assets|112,575,998.71|183,689,391.11|
|and other long-lived assets|||
|Payments for investments|||
|Net increase in pledged loans|||
|granted|||
|Net payments for acquisition of|||
|subsidiaries and other business units|||
|Cash used in other investing|||
|||0.00|
|activities|||
|Subtotal of cash used in investing|||
||112,575,998.71|183,689,391.11|
|activities|||
|Net cash flows from investing activities|-107,772,402.09|-112,256,449.40|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|3. Cash generated by or used in|||
|financing activities:|||
|Capital contributions received|500,000.00||
|Including: Capital contributions|||
|by non-controlling interests to|||
|subsidiaries|||
|Increase in borrowings obtained|736,133,783.53|465,765,338.71|
|Net proceeds from issuance of bonds|||
|Cash generated by other financing|||
||21,300,000.00|0.00|
|activities|||
|Subtotal of cash generated by financing|||
||757,933,783.53|465,765,338.71|
|activities|||
|Repayment of borrowings|484,376,409.32|287,319,968.88|
|Payments for interest and dividends|9,855,785.25|5,465,132.73|
|Including: Dividends paid by|||
|subsidiaries to non-controlling interests|||
|Cash used in other financing|||
|||0.00|
|activities|||
|Subtotal of cash used in financing|||
||494,232,194.57|292,785,101.61|
|activities|||
|Net cash flows from financing|||
||263,701,588.96|172,980,237.10|
|activities|||
|4. Effect of foreign exchange rate|||
||-7,731,641.43|-4,087,782.11|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||232,316,372.57|-19,117,312.64|
|equivalents|||
|Add: Cash and cash equivalents,|||
||676,639,212.86|659,116,137.67|
|beginning of the period|||
|6. Cash and cash equivalents, end of|||
||908,955,585.43|639,998,825.03|
|the period|||

6. Parent Company Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Item|January-March 2018|January-March 2017|
|1. Cash generated by or used in|||
|operating activities:|||
|Proceeds from sale of commodities|||
||1,402,617,102.18|1,162,666,666.42|
|and rendering of services|||
|Tax rebates|49,708,933.68|32,804,612.04|
|Cash generated by other operating|||
||15,058,269.35|12,626,116.36|
|activities|||

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Subtotal of cash generated by operating|||
||1,467,384,305.21|1,208,097,394.82|
|activities|||
|Payments for commodities and|||
||917,764,028.02|685,725,106.60|
|services|||
|Cash paid to and for employees|358,009,124.41|346,132,598.78|
|Taxes paid|44,479,611.73|46,951,812.96|
|Cash used in other operating|||
||31,339,072.23|45,317,103.44|
|activities|||
|Subtotal of cash used in operating|||
||1,351,591,836.39|1,124,126,621.78|
|activities|||
|Net cash flows from operating|||
||115,792,468.82|83,970,773.04|
|activities|||
|2. Cash generated by or used in|||
|investing activities:|||
|Proceeds from disinvestments|||
|Investment income|||
|Net proceeds from disposal of|||
|property, plant and equipment,|||
||64,995,332.71|466,988.35|
|intangible assets and other long-lived|||
|assets|||
|Net proceeds from disposal of|||
|subsidiaries or other business units|||
|Cash generated by other investing|||
||244,162,209.77|1,972,088.44|
|activities|||
|Subtotal of cash generated by investing|||
||309,157,542.48|2,439,076.79|
|activities|||
|Payments for acquisition of property,|||
|plant and equipment, intangible assets|43,650,645.56|12,742,051.92|
|and other long-lived assets|||
|Payments for investments|256,206,500.00|0.00|
|Net payments for acquisition of|||
|subsidiaries and other business units|||
|Cash used in other investing|||
||167,497,600.00|1,000,000.00|
|activities|||
|Subtotal of cash used in investing|||
||467,354,745.56|13,742,051.92|
|activities|||
|Net cash flows from investing activities|-158,197,203.08|-11,302,975.13|
|3. Cash generated by or used in|||
|financing activities:|||
|Capital contributions received|||
|Increase in borrowings obtained|475,339,258.78|268,549,314.61|

Lu Thai Textile Co., Ltd. First Quarter Report 2018
||||
|-|-|-|
|Net proceeds from issuance of bonds|||
|Cash generated by other financing|||
|activities|||
|Subtotal of cash generated by financing|||
||475,339,258.78|268,549,314.61|
|activities|||
|Repayment of borrowings|283,270,165.87|189,708,180.44|
|Payments for interest and dividends|4,169,374.27|2,366,745.41|
|Cash used in other financing|||
|activities|||
|Sub-total of cash used in financing|||
||287,439,540.14|192,074,925.85|
|activities|||
|Net cash flows from financing|||
||187,899,718.64|76,474,388.76|
|activities|||
|4. Effect of foreign exchange rate|||
||-2,410,353.03|-1,491,082.46|
|changes on cash and cash equivalents|||
|5. Net increase in cash and cash|||
||143,084,631.35|147,651,104.21|
|equivalents|||
|Add: Cash and cash equivalents,|||
||267,809,829.78|177,016,859.63|
|beginning of the period|||
|6. Cash and cash equivalents, end of|||
||410,894,461.13|324,667,963.84|
|the period|||

II IndependentAuditor’s Report
Indicate by tick mark whether the Q1 financial statements have been audited by an independent auditor.
□Yes√ No
The Q1 financial statements have not been audited by such an auditor.
Board Chairman: Liu Zibin
Lu Thai Textile Co., Ltd.
April 27, 2018