Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
Stock code: 000726, 200726 Stock abbreviation: LTA, LTB Announcement No.: 2015-045
Lu Thai Textile Co., Ltd.
Abstract of the Report for the Third Quarter of 2015
1
Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
Section I. Important Reminders
The Board of Directors, the Supervisory Committee as well as all 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 record, misleading statement or material omission. And they shall be
jointly and severally liable for that.
Liu Shizhen, company principal, Zhang Hongmei, chief of the accounting work, and Zhang Keming, chief of the
accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual,
accurate and complete.
This report is prepared in both Chinese and English. Should there be any discrepancy between the two versions,
the Chinese version shall prevail.
Section II. Financial Highlights & Change of Shareholders
I. Major accounting data and financial indexes
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or
correction of any accounting error?
□ Yes √ No
30 Sept. 2015 31 Dec. 2014 Increase/decrease (%)
Total assets (RMB Yuan) 8,829,506,971.03 8,627,671,393.88 2.34%
Net assets attributable to shareholders
6,676,069,664.40 6,588,772,245.55 1.32%
of the Company (RMB Yuan)
YoY increase/decrease YoY
Jul.-Sept. 2015 Jan.-Sept. 2015
(%) increase/decrease (%)
Operating revenues (RMB Yuan) 1,569,500,236.21 7.55% 4,511,336,133.37 -1.36%
Net profit attributable to shareholders of
204,342,167.24 -12.40% 548,863,683.96 -22.71%
the Company (RMB Yuan)
Net profit attributable to shareholders of
the Company after extraordinary gains 188,913,906.19 -3.37% 497,518,363.60 -25.91%
and losses (RMB Yuan)
Net cash flows from operating activities
-- -- 833,510,131.79 -1.08%
(RMB Yuan)
Basic EPS (RMB Yuan/share) 0.21 -12.50% 0.57 -22.97%
Diluted EPS (RMB Yuan/share) 0.21 -12.50% 0.57 -22.97%
Weighted average ROE (%) 2.89% -0.56% 7.99% -3.27%
Items and amounts of extraordinary gains and losses
√Applicable □Inapplicable
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
Unit: RMB Yuan
Item Amount as of Jan.-Sept. 2015 Note
Gains/losses on the disposal of non-current assets (including the offset part of asset
-2,799,179.00
impairment provisions)
Government grants recognized in the current period, except for those acquired in the
ordinary course of business or granted at certain quotas or amounts according to the 47,595,882.23
country’s unified standards
Gains and losses on change in fair value from tradable financial assets and tradable
financial liabilities, as well as investment income from disposal of tradable financial
20,476,085.69
assets and 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 2,602,829.18
Less: Income tax effects 12,471,948.08
Minority interests effects (after tax) 4,058,349.66
Total 51,345,320.36 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
There was no such situation of the Company during the reporting period.
II. Total number of shareholders and shareholdings of the top ten shareholders at the
period-end
1. Total number of common shareholders and shareholdings of the top ten common shareholders at the
period-end
Unit: share
Total number of common
74,991
shareholders at the period-end
Shareholdings of the top ten common shareholders
Pledged or frozen
Shareholdi shares
Number of Number of
ng Num
Name of shareholder Nature of shareholder the shares restricted shares
percentage Status of ber of
held held
(%) shares share
s
Domestic
Zibo Lucheng Textile Investment Co., Ltd. non-state-owned 14.69% 140,353,583
corporation
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
Tailun Textile Co., Ltd. Foreign corporation 12.37% 118,232,400 118,232,400
State-owned
Central Huijin Investment Co., Ltd. 2.13% 20,315,300
corporation
T.ROWE PRICE INTL DISCOVERY
Foreign corporation 1.99% 18,972,618
FUND
LYNAS ASIA FUND Foreign corporation 1.72% 16,443,675
CHINA SECURITIES FINANCE State-owned
1.64% 15,679,091
CORPORATION LIMITED corporation
VALUE PARTNERS HIGH-DIVIDEND
Foreign corporation 1.46% 13,923,715
STOCKS FUNDS
HUA AN NEW SILK ROAD THEME Domestic
EQUITY SECURITIES INVESTMENT non-state-owned 1.06% 10,110,000
FUND corporation
NATIONAL WESTMINSTER BANK PLC
AS DEP OF FS GREATER CHINA Foreign corporation 0.96% 9,211,092
GROWTH FUND
VALUE PARTNERS CLASSIC FUND Foreign corporation 0.85% 8,156,383
Shareholdings of the top ten non-restricted common shareholders
Number of Type of shares
non-restricted
Name of shareholder
common shares held Type Number
at the period-end
RMB ordinary
Zibo Lucheng Textile Investment Co., Ltd. 140,353,583 140,353,583
share
RMB ordinary
Central Huijin Investment Co., Ltd. 20,315,300 20,315,300
share
Domestically
T.ROWE PRICE INTL DISCOVERY FUND 18,972,618 listed foreign 18,972,618
share
Domestically
LYNAS ASIA FUND 16,443,675 listed foreign 16,443,675
share
RMB ordinary
CHINA SECURITIES FINANCE CORPORATION LIMITED 15,679,091 15,679,091
share
Domestically
VALUE PARTNERS HIGH-DIVIDEND STOCKS FUNDS 13,923,715 listed foreign 13,923,715
share
HUA AN NEW SILK ROAD THEME EQUITY SECURITIES RMB ordinary
10,110,000 10,110,000
INVESTMENT FUND share
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
Domestically
NATIONAL WESTMINSTER BANK PLC AS DEP OF FS GREATER
9,211,092 listed foreign 9,211,092
CHINA GROWTH FUND
share
Domestically
VALUE PARTNERS CLASSIC FUND 8,156,383 listed foreign 8,156,383
share
RMB ordinary
First State China A share fund 8,010,206 8,010,206
share
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
Explanations about associated relationship or concerted action among shareholder as well as sponsor of foreign capital of the
the above shareholders Company. All of other shareholders are people holding
circulating A share or circulating B share and the Company
is not able to confirm whether there is associated
relationship or concerted action among other shareholders.
Top ten non-restricted common shareholders taking part in margin
Naught
financing and securities lending (if any)
Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company carry out any agreed
buy-back in the reporting period?
□ Yes √ No
No shareholder of the Company carried out any agreed buy-back in the reporting period.
2. Total number of preferred share holders and shareholdings of the top ten preferred share holders at the
period-end
□ Applicable √ Inapplicable
Section III. Significant Events
I. Major changes of main accounting statement items and financial indicators in the reporting
period, as well as reasons for the changes
√ Applicable □ Inapplicable
(1) Monetary funds as at 30 Sept. 2015 stood at RMB 956,833,305.54, up 43.61% from the
year-beginning amount, mainly because the shares repurchase reserve funds had not paid.
(2) Notes receivable as at 30 Sept. 2015 stood at RMB 168,400,772.02, up 47.97% from the
year-beginning amount, mainly because the corresponding bank acceptance bills receivable and the
LC of the operating income increased at the reporting period.
(3) Interests receivable as at 30 Sept. 2015 stood at RMB 461,711.95, up 100.00% from the
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
year-beginning amount, mainly because the interests receivable increased at the reporting period.
(4) Other current assets as at 30 Sept. 2015 stood at RMB 24,641,973.01, up 376.88% from the
year-beginning amount, mainly because the VAT and the input tax to be deducted and the pre-paid
Income tax to be deducted increased.
(5) Engineering material as at 30 Sept. 2015 stood at RMB 31,577,585.24, up 58.79% from the
year-beginning amount, mainly because the equipments to be installed of the Lu Thai (Cambodia)
and the Lu Thai (Myanmar) increased.
(6) Long-term deferred expense as at 30 Sept. 2015 stood at RMB 73,791,208.53, up 160.57% from
the year-beginning amount, mainly because the land rentals of the Lu Thai (Vietnam), the Lu Thai
(Cambodia) and Lu Thai (Myanmar) newly increased.
(7) Short-term borrowings as at 30 Sept. 2015 stood at RMB 749,720,308.36, up 44.89% from the
year-beginning amount, mainly because the short-term borrowings of the parent company
increased.
(8) Financial liabilities measured at fair value with changes recorded into current gains and losses as
at 30 Sept. 2015 stood at RMB 19,444,595.00, up 488.13% from the year-beginning amount,
mainly because the losses of the changes of the fair value of the forward foreign exchange
settlement at the period-end.
(9) Notes payable as at 30 Sept. 2015 stood at RMB 1,823,163.13, down 75.44% from the
year-beginning amount, mainly because the notes payable paid as expired.
(10) Accounts payable as at 30 Sept. 2015 stood at RMB 231,878,445.18, down 32.61% from the
year-beginning amount, mainly because the purchase amount of the raw materials payable at the
period-begin paid at the reporting period.
(11) Prepayments as at 30 Sept. 2015 stood at RMB 117,594,870.83, up 43.10% from the
year-beginning amount, mainly because the customer payment in advance increased.
(12) Interests payable as at 30 Sept. 2015 stood at RMB 1,305,403.16, up 155.27% from the
year-beginning amount, mainly because the increase of the borrowings of the parent company due
to the increase of the interests payable.
(13) Long-term borrowings as at 30 Sept. 2015 stood at RMB 0.00, down 100.00% from the
year-beginning amount, mainly because the transfer from the long-term borrowings at the
period-end to the non-current liabilities due within 1 year.
(14) Long-term accounts payable as at 30 Sept. 2015 stood at RMB 0.00, down 100.00% from the
year-beginning amount, mainly because the payment of the bond amount of the electric power at the
reporting period.
(15) Other comprehensive income as at 30 Sept. 2015 stood at RMB 7,770,092.57, up 192.06%
from the year-beginning amount, mainly because the changes of the exchange rate at the period-end
due to the increase of the revenue from the foreign currency statement translation.
(16) Financial expenses for Jan.-Sept. 2015 stood at RMB 15,616,968.80, up 48.73% year on year,
mainly because the losses of the exchange increased.
(17) Assets impairment losses for Jan.-Sept. 2015 stood at RMB 2,320,358.38, up 141.55% year on
year, mainly because the increase of the accounts receivable at the period-end due to the increase of
the assets impairment losses.
(18) Revenues from the changes of the fair value for Jan.-Sept. 2015 stood at RMB -16,138,395.00,
up 42.31% year on year, mainly because the financial assets delivered as expired which
correspondingly carried forward the originally recognized losses of the changes of the fair value and
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
the changes of the fair value of the financial assets at the reporting period.
(19) Investment revenue for Jan.-Sept. 2015 stood at RMB 36,614,480.69, up 47.04% year on year,
mainly because the revenue from the derivative investment increased.
II. Progress and influence of significant events, as well as the analysis and explanation on
solutions
√ Applicable □ Inapplicable
1. The Company held the 22nd Session of the 7th Board of Directors on 12 Jul., which reviewed and approved the Proposal on
Repurchasing Part of the Share A and Share B of the Company and at the same time issued the Preplan on Repurchasing Part of the
Share A and Share B of the Company as well as submitted the proposals above to the 1st Extraordinary General Meeting of 2015 held
on 5 Aug. 2015, which reviewed and approved the Proposal on Repurchasing Part of the Share A and Share B of the Company. The
Company completed the relevant examination and approval and filing procedures on 10 Oct., and issued the Report about Lu Thai
Textile Co., Ltd. Repurchasing Part of the Share A and Share B of the Company. For the details, please refer to the relevant
announcements disclosed on the Securities Times, Shanghai Securities News, Ta Kung Pao and the www.cninfo.com.cn respectively
on 14 Jul. 2015, 6 Aug. 2015 and 10 Oct. 2015.
2. The major shareholders and the Directors, Supervisors as well as the Senior Executives of the Company had committed on 10 Jul.
that not to decrease the shareholding of the stocks of the Company within the future 6 months since 10 Jul., and for the details, please
refer to the relevant announcements disclosed on the Securities Times, Shanghai Securities News, Ta Kung Pao and the
www.cninfo.com.cn on 10 Jul. 2015.
Index to the relevant
Overview of the significant event Date of disclosure announcement disclosed on the
website
On 12 Jul. 2015, the Company held the 22nd Session of the 7th Board of
Directors, which reviewed and approved the Proposal on Repurchasing
Relevant announcements on
Part of the Share A and Share B of the Company and at the same time 14 Jul. 2015
www.cninfo.com.cn
issued the Preplan on Repurchasing Part of the Share A and Share B of
the Company.
On 5 Aug. 2015, the Company held the 1st Extraordinary General
Relevant announcements on
Meeting of 2015, which reviewed and approved the Proposal on 6 Aug. 2015
www.cninfo.com.cn
Repurchasing Part of the Share A and Share B of the Company.
On 10 Oct. 2015, the Company completed the relevant examination and
approval and filing procedures and issued the Report about Lu Thai Relevant announcements on
10 Oct. 2015
Textile Co., Ltd. Repurchasing Part of the Share A and Share B of the www.cninfo.com.cn
Company.
III. Commitments made by the Company or shareholders holding over 5% of the Company’s
shares in the reporting period or such commitments carried down into the reporting period
√ Applicable □ Inapplicable
Time of
Commitment Period of
Commitment Contents making Fulfillment
maker commitment
commitme
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
nt
Commitments made in a share reform
Commitments made in an acquisition report
or a report on equity changes
Commitments made in asset reorganization
Commitments made in the first public
offering or refinancing.
The biggest shareholder
Zibo Zibo Lucheng Textile As the end of
Lucheng Investment Co., Ltd. and the
Textile the directors, supervisors reporting
Investment and senior executives period,
Other commitments made to minority 10 Jul. 10 Jul. 2015 to
Co., Ltd. and committed that the shares decreased
shareholders 2015 10 Jan. 2016
the directors, of the Company held by its holding
supervisors them would not be of shares
and senior decreased from 10 Jul. of the
executives 2015 to the future six Company
months
Executed in time or not? Yes
IV. Predict the 2015 annual operating results
Warnings of possible loss or large-margin change of the accumulated net profit made during the period from the beginning of the
year to the end of the next reporting period compared with the same period of the last year according to prediction, as well as
explanations on the reasons
□Applicable √Inapplicable
V. Securities investment
□Applicable √Inapplicable
The Company was not involved in any securities investment of the reporting period.
VI. Shareholdings in other listed companies
□Applicable √ Inapplicable
There was no shareholding in other listed companies during the reporting period.
VII. Derivative investment
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Operat Relati Rela Type of Initial Beginning Opening Impairm Closing Proportion Actual
Ending date
or on ted-p derivative investment date investmen ent investment of the gain/loss
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
arty investment amount t amount provisio amount closing in
trans n (if investment reportin
actio any) amount in g period
n or the
not Company’s
closing net
assets (%)
Comm Forward
Non-re 14 Nov.
ercial No exchange 236,368.66 28 Jun. 2016 21,213.88 109,253.37 15.38% 2,411.32
lated 2014
bank settlement
Comm Foreign
Non-re 11 Feb.
ercial No exchange 7,065.35 28 Sep. 2015 0 0 10.18
lated 2015
bank trading
Comm
Non-re Option
ercial No 228,752.31 21 Oct. 2015 10 Jul. 2016 31,835 145,982.05 20.55% 1,239.95
lated portfolio
bank
Total 472,186.32 -- -- 53,048.88 255,235.42 35.93% 3,661.45
Capital source for derivative
Self-owned funds
investment
Cases involving lawsuit (if
No
applicable)
Disclosure date of the board
announcement approving the 25 Apr. 2015
derivative investment (if any)
Disclosure date of the general
meeting announcement
approving the 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
Analysis on risks and control zero-deposit. Meanwhile, the Company had a complete risk control system for sufficient analysis
measures of derivative products and prevention of possible risks such as risk of laws and regulations, credit risk, operation risk and
held in the reporting period market risk.
(including but not limited to 1. Risk of laws and regulations:
market risk, liquidity risk, credit The Company conducted derivatives products transaction in strict accordance with relevant laws
risk, operation risk, law risk, and rules as well as regulatory policies from government securities regulatory authorities, if there
etc.) 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.
Precautionary measures: The Company carefully studied and mastered laws, regulations and
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
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
liquidity, and the counterparty or the Company couldn’t fulfill the contract due to other aspects
except the liquidity, which would cause credit risk and further economic losses for the Company.
Precaution measure: the Company chose the powerful financial institutions with good reputation as
the counterparty, and signed standard derivative products transaction contract, as well as strictly
controlled the credit risk of 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., the Proposal on the Plan of Lu Thai Textile Co., Ltd. for
Derivative Transactions in 2014 approved at the 7th Session of the 7th Board of Directors on 25
Mar. 2014, and performed relevant information disclosure responsibilities. The Company decided
the up limit for the amount of derivative products transaction according to the production and
operation scale and the progress of foreign exchange income for the Company, and delivered by
phases. It was also possible to use extension of term and other ways to ensure the fulfillment of
contract as schedules upon the mature of contract, and wouldn’t cause any loss of credit risk for the
Company due to insufficient liquidity or other reasons.
3. Operation risk:
The derivative financial transactions had high specialty and complexity, so imperfect internal
operation procedures, staffs and external events would make the Company to undertake risks
during the transaction.
Precaution measure: The Company promulgated strict authorization and approval system and
perfect regulatory mechanism, fixed the departments, operation procedures and approval
procedures system to conduct derivative products transaction, established special risk control
positions, implemented strict authorization and post checks and balances system, meanwhile, it
improved the overall quality of relevant personnel through strengthening the business training and
professional ethics education for them. Besides, it established the System of Reporting the
Abnormal Situation Timely, formed an efficient risk management procedures, so as to ensure to
lower the operation risks to the maximum.
4. Market risk:
The forward settlement of exchange is an important derivative products transaction, which was
significantly affected by the exchange rate fluctuation due to its large amount. The Central Bank
decided to expand the inter-bank spot RMB-dollar trading band from 1% to 2% since 17 Mar.
2014, which would increase the difficulty in the operation of forward settlement of exchange.
Besides, if the RMB is devalued by a large margin on the basis of the current situation before the
contract is due, so then, the larger losses shall incur in the contract on forward settlement of
exchange signed by the Company.
Risk analysis and precaution measure: Renminbi appreciated significantly compared with that
before the exchange rate reform, but Renminbi internationalization would be a long-term goal,
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Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
which decided that Renminbi would not depreciated significantly. Although the increased
fluctuation range added the operation difficulty, it provided a certain opportunity, which required
relevant personnel of the Company actively master the market trend, carefully operate and hold
positive opportunity, so as to try the best to reduce the market risks under the condition of
increased market difficulty.
1. Up to 30 Sep. 2015, the Company held 76 undue financial derivative product contracts, totaling
US$441.5 million, including 35 forward settlement contracts worth US$172 million and 41 foreign
Changes of market prices or fair exchange option contracts worth US$ 269.5 million (the latest expiration before Jul 2016). The
values in the reporting period of financial derivative products above accounted for 35.93% of the closing net assets.
the invested derivatives. And 2. From Jan. 2015 to Sep. 2015, the due financial derivative products of the Company totally
the analysis on the fair value of equaled to US$ 347.5862 million, all delivered on time, and the gain generated was RMB36.6145
the derivatives should include million. To be specific, the due forward settlement was US$203.127million, generating gain of
the specific use methods and the RMB24.1132 million; the due forward foreign exchange trading amount equaled to US$ 11.4592
relevant assumptions and million, which generated gain of RMB101800; and the due foreign exchange options equaled to
parameters. US$133 million, which RMB123million timely delivered due to the arrival of delivery conditions,
generated a gain of RMB12.3995 million, US$10 million had not been delivered due to not arrive
the delivery conditions.
Whether significant changes
occurred to the Company’s
accounting policy and specific
accounting principles of Unchanged
derivatives in the reporting
period compared to the previous
reporting 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
Specific opinion from advice: we were of the opinion that it would strengthen the Company’s competitiveness to use
independent directors on the derivative transactions with focus on forward settlement and purchase as an effective tool to avoid
Company’s derivatives foreign exchange risks, to strengthen the relevant internal control and to carry out the loss and risk
investment and risk control prevention measures so as to improve the operation and management. It was considered feasible
for the Company to conduct derivative transactions with focus on forward settlement and purchase,
and no harm was done to interests of the Company’s shareholders.
VIII. Researches, visits and interviews received in the reporting period
√Applicable □Inapplicable
Main discussion and
Way of
Time Place Visitor type Visitor materials provided by the
reception
Company
RBC Global Asset Management
Field The Company's current
8 Sep. 2015 Conference room Institution Richard Farrell, Christoffer
research situation
Enemaerke
11
Abstract of the Report for the Third Quarter of 2015 of Lu Thai Textile Co., Ltd.
Office of the Journalist Lihua of Da Zhihui The Company's current
22 Sep. 2015 Other Institution
chairman secretary News Agency and investor situation
Field Credit Suisse (Hong Kong) Co., The Company's current
25 Sep. 2015 Conference room Institution
research Ltd. Wang Yifu situation
Field The Company's current
25 Sep. 2015 Conference room Institution Zhizhu Investment Liu Ren
research situation
Lu Thai Textile Co., Ltd.
Board Chairman: Liu Shizhen
29 Oct. 2015
12
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